9/11

FRONT OFFICE SERVICES NC II

Quarter 3– Module 1: weeks 1-2
CONDUCT NIGHT AUDIT (CA)
TLE-Front Office Services NC II – Grade 9/11
Quarter 3 – Module 1: weeks 1 -2
Conducting Night Audit

First Edition, 2020

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 9/11
FRONT OFFICE
SERVICES NC II
Quarter 3 – Module 1: weeks 1-2
CONDUCTING NIGHT AUDIT
Introductory Message
For the facilitator:
As a facilitator, you are expected to orient the learners on how to
use this module. You also need to keep track of the learners' progress
while allowing them to manage their own learning at home.
Furthermore, you are expected to encourage and assist the learners as
they do the tasks included in the module.

For the learner:

As a learner, you must learn to become responsible of your own
learning. Take time to read, understand, and perform the different
activities in the module.
As you go through the different activities of this module be
reminded of the following:
1. Use the module with care. Do not put unnecessary mark/s on any
part of the module. Use a separate sheet of paper in answering the
exercises.
2. Don’t forget to answer Let Us Try before moving on to the other
activities.
3. Read the instructions carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking
your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are done.
If you encounter any difficulty in answering the tasks in this
module, do not hesitate to consult your teacher or facilitator. Always
bear in mind that you are not alone. We hope that through this material,
you will experience meaningful learning and gain deep understanding
of the relevant competencies. You can do it!

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 Let Us Learn

This module was anchored on the following Curriculum Guide (CG) in

TLE/TVL 9/11 Front Office Services NC II:
Understand concepts related to Conducting Night Audit

LO 1. Monitor financial transactions TLE_HEFS9- 12CA-IIIa-b-15

1.1. check transactions to ensure that they have been carried out in accordance
with establishment procedures

1.2. check balances prepared by others to ensure that they are accurate and in
accordance with establishment procedures

1.3. identify and resolve financial and system discrepancies according to level of
responsibility

Specifically, you are expected to:

 Identify and resolve financial and system discrepancies according to

level of responsibility
 Implement financial systems and financial control systems
in accordance with establishment procedures

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 Let Us Try

DIRECTION: Choose the correct inside the box. Write your correct answer on
a separate sheet of paper.
Discrepancies Night Auditor Auditing Average daily rate

Docket Guest folio Journal Validation

Accounts payable

1. Person who controls the accuracy of guests and non-guests accounts and
provides reception service overnight.
2. It is the process of checking and reviewing all financial and non -financial
transactions to determine their accuracy.
3. Measures the average rate earned for each room sold.

4. A bookkeeping term referring to the accounting book or books where

summarized details of transactions are first entered. Journal entries are
later transferred or posted to ledgers.
5. An account or record of guest charges and personal details.

6. Checking the codes and numbers of an account to make sure it is correct.

7. Money owed by the venue.

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 Let Us Study

Lesson 1 Monitor financial transactions

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Auditing is nothing but conducting a financial inspection of the

organization. For a hotel business, the finance management starts at the
front office. Accurate posting of transactions on the guest folios starts at
the front office, which is further carried to the back-office accounting
department. The guest accounts are counterchecked daily during auditing.
Experts recommend the hotel management team go through the night
audit reports daily to get an insight into the hotel occupancy and finances.
It is the process of auditing where the night auditor reviews all
financial activities of the hotel that has taken place in one day.
The auditing process for the day is generally conducted at the end of
the day during the following night, hence the name ‘Night Audit’. It can be
performed by the conventional method of using papers, receipts, vouchers,
coupons, and files. But performing audits using modern PMS systems is
easy, fast, and efficient.

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BASIC ACTIVITIES DURING NIGHT AUDIT
The night auditor performs the following steps during night audit activity −

 Posting accommodation and tax charge

 Accumulating guest service charges and payments
 Settling financial activities of various departments
 Settling the account receivables
 Running the trial balance for the day
 Preparing the night audit report

THE NEED FOR NIGHT AUDIT

The objective of the night audit is to evaluate the hotel’s financial activities.
Night audit not only reviews guest accounts by checking credits and debits
but also tracks the credit limits of the guests and tallies projected and
actual sales from various departments. Night audit reviews daily cash flow
into and out of the hotel’s account.
Night audit has a large significance in hotel business operations. The
management body refers to the night audit report to plan future goals and
control the expenses. The managers can react immediately to the acquired
information.

RESPONSIBILITIES OF A NIGHT AUDITOR

Apart from the basic audit activities listed above, the night auditor carries
out the following responsibilities −

 Taking over from the last shift.

 Checking-in or checking-out the guests after 11:00 pm.
 Registering the guests.
 Allocating accommodations to the newly checked-in guests.
 Settling transactions in the newly created guest accounts.
 Verifying guest folios.
 Verifying room status report.
 Balancing all paperwork with the accounts in the PMS.
 Remaining liable for security of the premises.
 Handling guest accommodation keys.
 Taking backup of the PMS-generated reports.
 Preparing lists of expected guest arrivals for the next day.
 Closing financial activities for a day.
 Starting financial activities for the next day.
 Receiving and recording bank deposits.

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TYPES OF NIGHT AUDIT REPORTS

Today, the PMS helps night auditors to a great extent in auditing and
generating accurate reports. Here are some typical reports generated
during the night audit −
 Night Audit Accommodation Report − It gives a snapshot of the
days when accommodations are occupied, the days when the
accommodations are available, check-ins, check-outs, no-shows, and
cancellations. This report can show further details for any of the
items listed above.
 Night Audit Counter Report − It gives details on cash and credit
card receipts and withdrawals.
 Night Audit Revenue Report − It delivers information on
accommodation revenue, cancellation and no-show revenue, and
other POS revenue. Revenue is generated through various agencies
and bodies such as travel agents, corporate organizations, internet
booking. etc. is also listed in this report.
 Night Audit Tax Report − Contains all the tax information on
reservation revenue and other POS revenues such as VAT, luxury tax,
and service tax.
 Cashier’s report − It is the detailed list of cashier activity of cash
influx and outflux, credit cards, and PMS totals. Cashier’s report is a
very important part of the financial control system of a hotel. The
front office manager reviews the night audit and looks for any
divergences between the actual amount received and the PMS total.
 Manager’s Report − It is a statistical list of the previous day’s
occupancy. It includes details about available accommodations,
occupied accommodations, sold and vacated accommodations, rack-
rate, number of guests in the hotel, number of no-shows, and so on.
 General Manager’s Report − Each department in the hotel is
required to send a daily sales report to the front office. Using their
information, a departmental total report is generated for the general
manager’s assessment. The General Manager determines the profit-
generating departments and evaluates the success of sales and
marketing.
 High Balance Report − This is a detailed report about the guests who
have exceeded the credit limit set by the hotel management.
 Ledger Balance Summary Report − It displays the opening and
closing balances for the Advance Deposit Ledger, Guest Ledger, and
City Ledger.
 Room Rate Audit Report − It lists all rates that are applied to each
guest and the difference from the rack rate with the predetermined
rack code.

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 RESPONSIBILITIES OF A NIGHT AUDITOR

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A night auditor also takes the duties and responsibilities of the night
manager at the front desk. These include:
Supervising or conducting the security checks within the establishment,
checking all floors and exit doors and public spaces
 Collecting the room service orders, especially the breakfast orders, and
posting the charges to the guests’ accounts
 Prepare express checkout folios or room accounts with appropriate
envelope and have them placed under the door of each room listed as
an expected departure for guests who have requested an express
checkout
 Process the establishment's newspaper requirements and place the
order
 Process any payments, early departures, deposits or pre-payments
 The night auditor will receive and process all the floats and re-
establish the pre-set combination of notes and coin
 After the night audit process, the night auditor will roll the business
date and process the room charges for the night, and then process the
in-house reports for distribution to departmental managers and
supervisors
 In the case of emergency during the night shift, the night auditor
would take responsibility at the premises
 In the management role at the front desk, the night auditor would be
required to deal with guest queries and complaints
 The night auditor would also be responsible for organizing night staff
meetings and hand over discussions.

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 Let Us Practice

Read and learn: Read the article and answer the following questions given
below. Write your answer on a separate sheet.

Article

We often perform audits and wonder why, when they’re complete, they
didn’t go very well. This article will offer insight on how to better anticipate
and solve the common audit problems that all auditors face. This is going to
take some personal work on the readers’ part. I hope that after reading this
article, you can apply these insights to your auditing practices to make you
a better auditor and ultimately get more out of the audit process.

There is a multitude of issues and audit problems auditors will encounter

during auditing that must be addressed individually. As we cannot discuss
every one of them, I have highlighted common audit problems that auditors
experience. Throughout my auditing career, I have had the opportunity to
observe different auditing styles, from Food and Drug Administration (FDA)
inspectors to third-party auditors for ISO certifications. Many of the audit
problems I’ve observed boil down to the following four causes:

 Management doesn’t support the audit program.

 No audit preparation
 Difficult or obtuse auditees
 Writing and publishing audit reports on time

Of course, this isn’t a complete list; you may already be thinking of other
issues that you’ve encountered. The remainder of the article will discuss the
listed audit problems, the resulting struggles for auditors, and some
solutions on how to deal with them constructively.

Common audit problems: No management support

When starting an audit, the first question we ask ourselves is, “Why
are we doing this?” We may be performing the audit for compliance reasons,
financial reasons, or because a procedure tells us that we must. All of these
are good reasons, though we must understand that conducting audits is a
business tool that improves our quality system. How do we then convey to
management, the CEO, or the board of directors that audits are an essential
part of business processes and not something to resent and neglect?

According to ISO 19011, the executive management team is required

to set the audit criteria and support the audit program. How many of your
executive managers have read ISO 19011? Probably not many. Our
obligation as audit program managers is to explain this to them and help
them

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understand the reasons for performing internal audits, supplier audits, or
other quality audits.

Still, we often struggle with knowing that our managers rely on us to

tell them what needs to be done. With some time, encouragement, and
understanding, individual companies may change this aspect. To gain
management support, we auditors must help managers understand that
auditing is an important process that can help them. Below are some ways
to help encourage executive managers to support the audit program.

Gaining management’s support

 Communicate the cost of audit observations.

 Explain the regulatory effects of nonconforming processes.
 Educate by stating or restating management’s role in the audit
program.
 Distribute audit reports to management.
 Have a member of management participate in an audit.
https://www.theauditoronline.com/common-audit-problems-and-how-
to-deal-with-them/

The question to be discussed:

1. What is the purpose of conducting a night audit?

2. What is the most difficult task as a night audit?

3. What does the night auditor do to reduce risk?

Criteria:
Content provides a wide array of facts 7
Organization of thoughts and ideas 8

Total: 15pts

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 Let Us Practice More

Direction: Answer the questions given below. Write your answer on a

separate sheet of paper.

1. Describe the activities undertaken by a night auditor

2. Identify and resolve financial and system discrepancies according to the

level of responsibility

3. Describe the responsibilities of a night auditor

4. What is the level of customers& expectation and perception towards

service quality of the front office staff/night auditor?

5 What is the discrepancy gap between customers& expectations and

perception towards service quality of the front office staff/night auditor?
Rubric

5 4 3 2 1

Content This paper is This paper is The writer is Topic is not Topic is not
clear and mostly beginning to well-defined well-defined
focused. It holds focused, and define the topic, and/or there and/or there
the reader's has some even though are too are too many
attention. good details development is many topics. topics.
Relevant details and quotes. still basic or
and quotes general.
enrich the
central theme.

Organization The organization Paper (and The Sentences The writing

enhances and paragraphs) organizational within lacks a clear
showcases the are mostly structure is paragraphs sense of
central idea or organized, in strong enough make sense, direction.
theme. The order, and to move the but the Ideas, details,
order, structure makes sense reader through order of or events seem
of information is to the reader. the text without paragraphs strung together
compelling and too much does not. in a loose or
moves the reader confusion. random
through the text. fashion; there
is no
identifiable
internal
structure.

9
Style The writing has The writing The text hums The text The reader has
an easy flow, mostly flows, along with a seems to practice
rhythm, and and usually steady beat, choppy and quite a bit in
cadence. invites oral but tends is not easy order to give
Sentences are reading. to be to read this paper a
well built, with more orally. fair interpretive
strong and businesslike reading.
varied structure than musical,
that invites more
expressive oral mechanical
reading. than fluid

Grammar/Spelling Punctuation, Punctuation, A few errors in A few errors Distracting

spelling, spelling, punctuation, in errors in
/Punctuation/ capitalization capitalization spelling, punctuation punctuation,
are correct. No are generally capitalization. , spelling, spelling,
Capitalization
errors. correct, with (3-4) capitalizatio capitalization
few errors. (1- n. (5-6)
2)

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Let Us Remember

 Locate the position of night auditor within the enterprise experience

required by a night auditor

 Interpret enterprise policies and procedures that apply to the delivery

of night auditor functions

 Validate transactions and charges that have been posted

 Reconcile posting of transactions within the areas of responsibility

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 Let Us Assess

Direction: Write your answer on a separate sheet of paper.

The question to be discussed:

1. Give 1 paragraph of what did you learn in the lesson and site
some examples how can you relate the topic in your day-to-day
activity.

RUBRIC

5 4 3 2 1

Content This paper is This paper The writer is Topic is not Topic is not
clear and is mostly be ginning to well- well-defined
focused. It focused, define the defined and/or there
holds the and has topic, even and/or are too many
reader's some good though there are topics.
attention. details and development too many
Relevant quotes. is still basic topics.
details and or ge neral.
quotes enrich
the central
theme.

Organization The Paper (and The Sentences The writing

organization paragraphs) organizational within lacks a clear
enhances are mostly structure is paragraphs sense of
and organize d, strong make direction.
showcases in order, enough to sense, but Ideas, details,
the central and makes move the the order of or events
idea or sense to the reader paragraphs seem strung
theme. The reader. through the does not. toge ther in a
order, text without loose or
structure of too much random
information is confusion. fashion;
compelling there is no
and moves identifiable
the reader internal
through the structure.
text.
Style The writing The writing The text The text The reader
has an easy mostly hums along seems has to
flow, rhythm, flows, and with a steady choppy and practice quite
and cadence. usually beat, is not easy a bit in order

11
 but tends to

12
 Sentences invites oral be more to read to give this
are well reading. businesslike orally. paper a fair
built, than musical, interpretive
with strong more reading.
and varied mechanical
structure that than fluid
invites
expressive
oral reading.
Grammar/Spelling Punctuation, Punctuation A few errors in A few Distracting
spelling, , spelling, punctuation, errors in errors in
/Punctuation/ capitalization capitalizatio spelling, punctuatio punctuation,
Capitalization are n are capitalization. n, spelling, spelling,
correct. No ge nerally (3-4) capitalizati capitalization
errors. correct, on. (5-6)
with few
errors.
(1-2)
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Let Us Enhance

SEQUENCING: Arrange the following procedure performs the following steps

during night audit activity. Write your answer on a separate sheet of paper.

1. Settling the account receivables

2. Settling financial activities of various departments

3. Running the trial balance for the day

4. Preparing the night audit report

5. Posting accommodation and tax charge

6. Accumulating guest service charges and payments

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 Let Us Reflect

The hotel night auditor is responsible for reconciling and closing out
daily hotel financial activities. The night audit shift starts after most hotel
staff leave for the day. There is a long list of responsibilities to complete
before the morning shift arrives, leaving the night auditor with plenty to
accomplish during the shift. The hotel night audit process varies with the
size and type of hotel and can include front desk, customer service, and
maintenance duties. The night auditor can also serve as the hotel’s
representative during the night shift.

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Answer Key

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 References

 Roldan, A.S. (2003) Front Office Services. Paranaque City, Metro-Manila:

Philippines (2-45)
 https://www.deped.gov.ph/k-to-12/about/k-to-12-basic-education-curriculum/
 http://www.tesda.gov.ph/Downloadables/TR%20Front%20Office%20Services%20
NC%20II.pdf
 Setupmyhotel, 2021, https://setupmyhotel.com/train-my-hotel-staff/front-office-
training/178-types-of-room-rates-used-in-hotels.html, Types of Rate Codes Used
In Hotels
 Tutorialspoint, 2020,
https://www.tutorialspoint.com/front_office_management/front_office_manageme
nt_night_audit.htm, Front Office Management – Night Audit
 Baker, S., 2000 (2nd ed’n), Principles of hotel front office operations, Hospitality
Press,Melbourne.
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