Hotel Night Audit Process: A Comprehensive Guide!
Night Audit in Hotel Front Office is a significant part of a hotel's accounting process. This process records, reviews, and collates all the hotel's financial activities in one day and posts them on appropriate account heads.
This blog will explain how to do a night audit at a hotel with a cloud-based hotel property management system like Hotelogix.
What is Night Auditing in the Hotel Industry?
Hotels operate 24/7, with guest check-in and check-out happening throughout the day. With every check-out, hoteliers must track transactions done through cash or cards. At the end of the business day, hotels must record and reconcile guest folios and their transactions correctly. The night audit process aims to collate revenue against various revenue heads. Specifically, the night audit process evaluates and closes daily cash flow into and out of the hotel's account. Also referred to as the end-of-day process, it ensures the rollover from one business day to the next.
Importance of Night Audit in Hotel Operations
- It ensures rollover from one business day to the next day.
- It reconciles all front office cash counters/accounts.
- It verifies posted entries to guest/non-guest accounts.
- It resolves room status and rate discrepancies.
- It generates several MIS reports called night audit reports.
How to do a Night Audit at a Hotel? A Hotel Night Audit Checklist
Night audits are mandatory for hotels of all sizes, categories, and services. The most convenient time to perform them is between the late evening and early morning—just after the business day closes. This is when most revenue centres and Hotel POS outlets at a hotel are closed, making it the ideal time. It helps the front office personnel, also called the night auditor, initiate and finish the night audit process with minimal interruption.
Total outstanding charge posting
The hotel night auditor should ensure that all guest transactions during the day are correctly captured, charged, and posted to guest accounts.
Reconcile room status
The night auditor must evaluate and analyze a particular day's occupancy report and the housekeeping room status report to determine a hotel's correct occupancy status.
Verify room rates
Comparing guest registration records with room reports is mandatory to ensure rack rates and actual rates are the same.
Verify no-shows of the day.
By verifying the day's no-shows in the front office console, the night auditor ensures that the no-show bills are duly charged and the rooms are marked as 'available' for future dates.
Balance all departmental accounts.
Balancing all revenue centre accounts is called 'Trial Balance,' which helps accurately post the day's room and tax charges.
The night audit process can be done manually – by pen and paper or by using a hotel property management system. While doing it manually will be time-consuming and error-prone, a Hotel PMS automates the whole process. For example, the Hotelogix cloud allows you to efficiently run the night audit process with 100% accuracy with just one click.
Night Audit Process with Hotelogix Hotel PMS
Hotelogix Hotel PMS users can perform night audits with just a few clicks. It works in 2 ways –
- Click the Frontdesk drop-down button at the top left corner and then click 'Perform Night Audit.' The system will finish the process quickly.
- If you have missed the night audit for the last business day, the Hotel PMS will prompt you to do so with a pop-up box. You need to click ‘Perform Night Audit,’ and the system will do it.
Moreover, with Hotelogix PMS in place, you can automate the whole process. You can run an auto night audit without logging into your Hotelogix account. Hotelogix PMS will do the automatic check-in and no-shows to the reservations based on the setup in the Admin Console.
Here’s a detailed Video on Night Audit Process on Hotelogix
Critical Night Audit Reports in Hotel Industry with a Sample
The Hotelogix PMS generates insightful reports on hotel business via the night audit process. These reports, known as Night Audit Reports, help you review your hotel’s operational effectiveness so that you can keep costs under control and make profits.
Night Audit Room Details Report
This report captures the total number of rooms and their total guests under each category, such as occupied rooms, available rooms, day-use rooms, etc., for the day. It helps you to understand a particular day’s occupied rooms, available rooms, check-ins, check-outs, no-shows, cancellations, complimentary rooms, day-use rooms, etc.
Read also on Hotel Cancellation Policy
Night Audit Counter Report
This report captures the revenue details of each counter for the day. It also shows each counter with further information on revenue received and withdrawn by the counter for the selected day. By selecting the ‘View Counter Details’ checkbox, you can track all the changes occurring in each counter before the night audit.
Night Audit Revenue Report
This report captures income generated from rooms and all other POS outlets for the day. It also indicates booking revenue generated via walk-ins, corporates, travel agents, websites, etc. The report also shows room inclusion details (if available) along with the source of revenue collected.
Night Audit Tax Report
This report shows the total amount collected from room and POS taxes for the day.
MTD & YTD Report
These two essential hotel reports for management show the month-wise and year-wise data for a selected day for which the night audit has been performed. They help you understand the percentage of rooms occupied, the percentage of rooms occupied minus complementary and house use, the average daily rate, and the total revenue of your hotel, including POS, & other charges, etc.
Rooms on Book Report
This report helps you with a snapshot of room revenue, room nights, and ARR for a specific search date. It also provides you with information on rooms per day, occupancy percentage for the past ten days, and its forecast for the next 30 days.
Hotel Trial Balance Report
It offers insights into your hotel’s financial status for a specific date. It includes all transactions posted and a breakdown of business within each of the three ledgers – guest, accounts receivable, and deposits.
When performed with an intelligent Hotel PMS like Hotelogix, the night audit process offers massive insights into your hotel’s operational and financial aspects. It would help if you considered leveraging a cloud-based hotel property management system to perform daily night audits at your hotel to reduce your workload while ensuring the accuracy of the process critical to your day-to-day operations.