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Night Auditing Procedure: Assignment No:1 Submitted To: MR - Amrik Singh Submitted By: Saurab Sharma Topic

The document discusses the night auditing procedure in hotels. It explains that night auditing is used to bill clients separately for each day and converts tentative transactions into confirmed charges and revenue. The six basic steps of night auditing are: 1) posting room and tax charges, 2) assembling guest charges and payments, 3) reconciling departmental finances, 4) reconciling accounts receivable, 5) running a trial balance, and 6) preparing a night audit report. Management uses the night audit report to review operational effectiveness and ensure accuracy of guest accounts.

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72 views

Night Auditing Procedure: Assignment No:1 Submitted To: MR - Amrik Singh Submitted By: Saurab Sharma Topic

The document discusses the night auditing procedure in hotels. It explains that night auditing is used to bill clients separately for each day and converts tentative transactions into confirmed charges and revenue. The six basic steps of night auditing are: 1) posting room and tax charges, 2) assembling guest charges and payments, 3) reconciling departmental finances, 4) reconciling accounts receivable, 5) running a trial balance, and 6) preparing a night audit report. Management uses the night audit report to review operational effectiveness and ensure accuracy of guest accounts.

Uploaded by

rimplesidhu15934
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT NO:1

SUBMITTED TO: MR.AMRIK SINGH


SUBMITTED BY: SAURAB SHARMA
TOPIC
Night auditing procedure

CLASS:BS.C(H.M)
ROLL.NO:16
REG.NO:10903177
Introduction
A specialized form of periodic billing, night audit is used in the
Hotel / Motel industry to bill clients for each day separately.
Tentative charge transactions are created on the reservations
you make. Tentative transactions have a future dollar value but
are not yet sales, and therefore not yet revenue. The tool is
named Night Audit because you process bills every night. This
converts tentative transactions for that day into realized
transactions, resulting in confirmed charges and revenue. You
must process the billings to convert the tentative transactions
every day. If you do not perform this process your income
statements and till tape will be incorrect.

The Night Audit Process


The night audit is not one of those reports that is put on the
shelf and forgotten. Management uses it to verify the integrity
of the guest accounts and to review the operational
effectiveness, which is the ability of a manager to control costs
and meet profit goals.
Therefore, accuracy is extremely important.
The six basic steps involved in preparing a night audit are:
1. Posting room and tax charges
2. Assembling guest charges and payments
3. Reconciling departmental financial activities
4. Reconciling the accounts receivable
5. Running the trial balance
6. Preparing the night audit report

This listing will help guide you through the seemingly endless
proofing of totals and cross-checking of entries, and expedite
the completion of the process.The night audit process
described in this article provides information on performing the
night audit with a property management system. It is important
to note that learning the mechanical or “hand method” of
doing the night audit will assist the front office manager in
understanding the intricacies of following a paper trail of guest
and depart- mental transactions. Undoubtedly, the more
modern method of performing the night audit on a PMS will be
used, but you should also be familiar with the components up
close and personal.

Posting Room and Tax Charges

After the night auditor has reviewed any messages from other
front office staff, re-viewed guests who checked out of the
hotel, extended any guest stays, reviewed all roomrates, and
printed a variance report, his or her first task is to post room
and tax charges to all accounts. The PMS can easily post room
and tax charges to the electronic folios,
with the room and tax options. Assembling Guest Charges and
Payments The various modules in a PMS (food and beverage,
call accounting, gift shop, etc.)allow for ease in assembling
guest charges and payments. The following is a typical list
of point-of-sale departments for which income will be reported:

•    Restaurant 1 (breakfast)


•    Restaurant 2 (lunch)
•    Restaurant 3 (dinner)
•    Room service 1 (breakfast)
•    Room service 2 (lunch)
•    Room service 3 (dinner)
•    Lounge 1 (lunch)
•    Lounge 2 (happy hour)
•    Lounge 3 (dinner)
•    Lounge 4 (entertainment)
•    Valet
•    Telephone
•    Gift shop
•    Spa and pool
•    Parking
•    Miscellaneous

Note how the restaurant, room service, and lounge paperwork


is further classified by meal or function, to facilitate
recordkeeping. General managers can review the income-
generation activity of each of these departments when they are
reported separately. The guest charges option of the night
audit module in a property management system
can sort and total all departmental charges and payments that
have been posted to the electronic folios from the point-of-sale
systems that interface with the PMS. These data are accurate
as long as the person entering the charges at the point-of-sale
terminal keys them in accurately.
The last step in the night audit process involves the preparation
of the night audit reports. These reports become a snapshot or
financial picture of the front desk activities and operation for
the previous day. The reports summarize the day’s activities
and provide an insight into the hotel’s operation. The
information relates to revenue, receivables, financial
transactions, and operating statistics. The information includes
occupancy percentages, average daily room rates, yield
percentages, and number of guests. Management uses the
information generated by the night audit to make decisions
regarding the operation of the hotel property.

The night audit is a vital process within the accounting function


of a hotel operation. Hotel managers depend upon the
accuracy of the documentation created by the night audit
process. Whether performed manually, by computer or PMS
system the night audit remains one of the most important
accounting functions performed by the front desk staff.

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