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Can a Night Audit Help Improve Hotel Operations?

Manu Sharma
Manu Sharma

Night Audit in a Hotel | Hotelogix

Closing out your day in a hotel is a complicated process. It’s even more difficult because, unlike many retail outlets and other businesses, there is no natural break during which you can reconcile financial data and guest information. Your front desk runs 24 hours per day to provide convenience for your guests.

The problem is that a single missed step or error in entering information could spell big problems, including lost revenue for your hotel. What’s the solution here? A night audit for a hotel could be the tool that you’re missing. Not sure what a night audit is, what a night auditor does, or why you need to even bother? We’ll cover everything in this blog post.

What Is a Night Audit?

A night audit for a hotel is exactly what it sounds like – a forced break in the day during which you audit your check-ins, check-outs, extended stay information, and then bump everything against your financial records. It’s your daily opportunity to catch errors early, correct them, and make the necessary changes to ensure that those problems don’t crop up again.

At its simplest, a night audit is a review of all guest account transactions recorded at the front desk conducted that day, bumped against your revenue transactions. It involves comparing check-ins and check-outs with credit card transactions, but there’s more to it. Your front desk handles more than just room charges, and all those financial transactions must be accounted for, as well.

Of course, there’s more to it than simply giving your staff a chance to balance the books. The night audit is also responsible for closing out one day and beginning the next. Before automated systems, the most convenient time to do this was at night; thus, the name “night audit” came into use.

Why Is a Night Audit Important?

It’s important to conduct a night audit for several critical reasons, including the following:

  • You have the opportunity to verify guest and non-guest account entries.
  • You’re able to balance all front office accounts.
  • You have the opportunity to resolve any discrepancies in room status.
  • You’re able to monitor guest credit limitations that will affect their stay, as well as your financials.
  • You have the opportunity to generate reports for management and operations.

Of course, to perform a night audit, you must have designated staff and processes in place. For most hotels, this means designating someone as the night auditor. Not only must you choose the right person for this role, but you must also ensure that their responsibilities are laid out to avoid any miscommunication.

What Does a Night Auditor Do?

Your night auditor is responsible for, you guessed it, performing night audits. However, it’s not quite as simple as that. First, you need to ensure that you’ve chosen the right person, which means having a firm grasp of the qualities and characteristics needed. A night auditor must:

  • Have excellent attention to detail
  • Be proficient in accounting
  • Have deep experience in the hospitality industry
  • Be familiar with cash transactions and credit transactions
  • Be accountable for any discrepancies that arise during the audit
  • Have a thorough understanding of the various hospitality functions

In most cases, you’ll find that night auditors are senior members of your staff – managers and other leaders who have experience and are committed to honesty and transparency. You must take your time when choosing a night auditor to ensure that they have the required knowledge, expertise, and commitment.

Now, to address the question of what a night auditor does, we need to look more closely at the various metrics that make up your close-of-day reporting. These should include:

  • Room revenue
  • Occupancy percentages
  • Upsells/upgrades
  • Sales of amenities/services
  • Other important metrics

The auditor will be responsible for preparing a summary for each day that details all financial activities that occurred at the front desk, including cash, credit cards, and checks accepted. This information will be prepared and recorded in various reports but will also be delivered to upper management, as well as to the hotel’s accounting department/staff.

What Happens If Night Audits Are Not Conducted?

If you do not have a night audit system in place, you are essentially flying blind. The chances are good that you’re scrambling to balance the numbers from the previous day, perhaps during a busy check-in/out time. This can lead to a wide range of problems, including:

  • Incomplete reporting leads to a lack of information for management to make decisions
  • The inability to make decisions in near-real time
  • A lack of information for the accounting department
  • Lost sales and profit due to lax recordkeeping and accounting
  • The inability to verify no-shows
  • Unbalanced department accounts

The Challenge with Your Night Audit Process

While the term “night audit” might make you think that this process must occur at night on the third shift, that is not true. Trying to shoehorn the night audit process into an inopportune time of day or night can cause almost as many problems as not conducting a night audit in the first place. So, what’s the solution?

At Hotelogix, we offer powerful tools that enable you to simplify your night audit process and schedule it when it works best for your schedule and needs. Perhaps your slowest time of day is first thing in the morning, or maybe it’s just before the third shift begins. Whatever the case, our platform allows you to schedule your night audit at your convenience and stop unwanted revenue loss.

Why Choose Hotelogix?

Why choose Hotelogix as your hotel management software? We offer powerful features, baked-in flexibility, and best-of-breed performance. We also deliver easy monitoring to simplify the process of balancing accounts and account posting, and our system retains transaction history for guest and non-guest accounts, taking the guesswork out of your night audit process.

Our PMS is powerful, flexible, and customizable. It also provides the ability to automate manual processes, improve booking rates through your web booking engine, create personalized marketing materials, and more. It’s never been simpler to operate a profitable, thriving hotel – Hotelogix is the hospitality management system software you need to ensure success.