Module 6 Conduct Night Audit

MODULE 6
CONDUCT NIGHT
AUDIT
Front Office Operation
I N F O R M AT I O N S H E E T # 6 . 1
PROCESS INTERNAL
FINANCIAL
TRANSACTION Front Office Operation
HMPE
326
Introduction
Night Audit is the process of auditing where the night
auditor reviews financial activities of the hotel that has
taken place in one day.
It is also called the ‘end-of-day close’ or ‘end-of-day

processing’. This process is usually conducted overnight
on the 23:00 - 07:30 hrs shifts.
HMPE The person in-charge to conduct night audit
326
is called night auditor.
Responsibilities:
• Taking over from the last shift
• Checking-in or checking-out the guest after 11:00pm at night.
• Registering the guests.
• Allocating accommodation to the nwely checked-in guest.
• Setting transactions in the newly created guest accounts.
• Verifying guest folios.
• Verifying room status report
• Balancing all paperwork with 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.
• Staring financial activites for the next day.
• Receiving and recording bank deposits.
HMPE
326 The night auditor performs the following
steps during the night audit activities:
• Posting accommodation and tax charges

• Accumulating guest service charges and payments
• Setting financial activities of various departments
• Setting the account receivables
• Running the trial balance for the day
• Preparing the night audit report
HMPE
326
The activities of the night auditor relate to the

preparation of reports which may relate to
occupancy, sales performance, break up by
department, commission earnings, supplier activity,
sales turns, commercial account activity and
foreign currency.
HMPE
326 Features of Night Audit
• A process undertaken daily in large establishments or
weekly in smaller operations.
• Undertaken during the 2300hrs-0700hs shift in front
office when all of the majority of outlets in the
establishment have closed
• Cannot be conducted while charges are still being
made by guests using the facilities.
• Has a set time finalizing departmental charges for
night audit purposes.
HMPE
326
Purpose of Night Audit
• Make sure guest accounts are accurate.
• Make sure departmental charges are accurate.
• Provide information on the financial activity of each
department.
• Provide statistics in the financial activity of the
establishment.
• Provide statistics in the financial activity of the
guests.
HMPE
326
Types of Night Report

• Night Audit Accommodation Report
• Night Audit Counter Report
• Night Audit Revenue Report
• Night Audit Tax Report
• Cashier’s Report
• Manager‘s Report
• General Manager’s Report
• High Balance Report
• Ledger Balance Summary Report
• Room Rate Audit Report
HMPE
326
Balancing Night Reports

Here are some examples of formulae used to balance night audits:
The formula for balancing bank deposits is: The formula for balancing city ledger is:
Total Bank Deposits Yesterday’s outstanding A/R
-Total Cash Sales + Today’s outstanding A/R income
-Credit Card receives A/R = Total outstanding A/R
-Cash Receives A/R -Credit card received and applied to A/R
=0 -Cash receive and applied to A/R
= Balance of A/R
The formula for balancing guest ledger is:
Total revenue
-Paid-outs and non-collect sales
-Daily Revenue
-Total cash income
Today’s outstanding A/R income
=0
I N F O R M AT I O N S H E E T # 6 . 2
COMPLETE ROUTINE
RECORDS AND REPORTS
Front Office Operation
HMPE
326
A report is a document that memorializes and provides objective

evidence of activities performed, events that occurred, results
achieved, or statements made.
Records include accounts, agreements, books, drawings, letters,

magnetic/optical disks, memos, micrographics, etc.
Generally speaking, records functions as evidence of activities

whereas documents function as evidence of intentions.
HMPE
326
Check and Validate Room Status
Part of the night auditor’s duties is to prepare operational reports of an
informative and statistical nature.
When compiling reports, the night auditor will perform several

simple, basic calculations using standard industry formulas to produce
the statistics required.
The basic statistics used include:

• Occupancy Percentage
• Double or Multiple Room Occupancy
• Average Room Rate
• Average Rate per Guest
HMPE
326
Check and Validate Room Status
Occupancy
• This measures the percentage of rooms occupied or sold in a

property. It can be used to:
• Indicate how successfully the Sales and Front Office staff
are selling rooms.
• Measure the volume of business generated by guests in
revenue-producing departments, comparing sales figures
with the occupancy.
• Provide information for management on which to base
budgetary considerations.
HMPE
326
The formula to calculate Occupancy Percentage is:

No. of rooms occupied
_____________________________________ x 100 = Occupancy Percentage
Total no. of rooms occupied available
Example:
The occupancy rate of a hotel which 141 rooms occupied of its 186 available rooms is:
141/186 x 100 = 76%

HMPE
326
Double or multiple-room occupancy
These statistics are used to determine linen and guest amenity requirements, food and beverage stock requirements, and
potential revenue in outlets. There two methods for calculating this ratio:
Option 1
No. of guests - Number of rooms occupied
___________________________________________ x Multiple Occupancy %
Example:
(198 - 141) / 141 x 100 = 40.4% of all occupied rooms have more than one person.
Option 2
No. of paid guests
_______________________ = Average guests per room occupied
Example:
198/141 = 1.4 guests per room
HMPE
326
Average room rate
It is used to show how much, on average, each occupied room is generating in revenue and is a very
important statistic when forecasting future room revenue. it is used to determine sales strategies and
marketing promotions.
Formula:
Net room revenue / Number of rooms occupied = Average room rate
Example:
The average room rate per room occupied is based upon the total amount of revenue divided by the
number of rooms that were occupied.
$22, 500 / 141 = $ 159.57

HMPE
326
Adjust Internal Records to Reflect Actual Room Status
The room status report provides details of the state of each room.
Room Status
All registered guests in the establishment are included in the ‘In-house Guest List.’
The ‘Room Status List’ will indicate which rooms in the establishment are:
• Vacant
• Ready Vacant
• Dirty Occupied
• Clean Occupied
• Dirty Out of Order
HMPE
326
Prepare Management and Operational Reports
The best method of communicating information is in the form of
reports.
• Daily room revenue summary report

• Daily revenue report
• In-house activity report
• Arrival and departure lists
• In-house guest list
• Special requests report
• Commission-related report

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MODULE 6

It is also called the ‘end-of-day close’ or ‘end-of-day

• Posting accommodation and tax charges

The activities of the night auditor relate to the

Types of Night Report

Balancing Night Reports

A report is a document that memorializes and provides objective

Records include accounts, agreements, books, drawings, letters,

Generally speaking, records functions as evidence of activities

When compiling reports, the night auditor will perform several

The basic statistics used include:

• This measures the percentage of rooms occupied or sold in a

The formula to calculate Occupancy Percentage is:

141/186 x 100 = 76%

$22, 500 / 141 = $ 159.57

Adjust Internal Records to Reflect Actual Room Status

• Daily room revenue summary report

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