Hotel Night Audit Process – Hotel Front Office

The discovery and collection of accounting error is what the hotel night audit process is about. A hotel night audit

ensures the integrity of accounts through cross-referencing. Ledger accounts are compared to source documents from revenue center to prove individual entries and accounts total. Discrepancies found during a hotel night audit must be corrected. A hotel night audit is conducted on a daily basis due to the transactional nature of the hotel business.

The degree of scrutiny required during the hotel night audit process depends on the frequency of errors and volume of transactions to be checked. While the first of these factors related to the quality of front office work, the second co-relates with the size and complexity of the hotel. Large, complex hotels typically require closer accounts scrutiny due to the volume of transaction posted.

The following steps are common to the sequence of hotel night audit.

Complete Outstanding Posting.

One of the primary functions of the hotel night audit is to ensure that all transactions affecting guest and non-guest accounts are posted to appropriate folios before the end of the day. It is important to accurately post and account for all transactions on the day they occurred. Charges posted to the guest folio with the wrong dates will confuse guest. Generally guest will challenge such charges during checkout. This can cause delay for the guest and for the staff since the charges will have to be researched for an explanation.

Traditionally the first step of the hotel night audit is to complete all outstanding postings. While sound front office practice dictates that transactions be posted to the proper accounts as they are received, the night auditor must confirm that all transactions have been posted before starting the audit routine. This actually means waiting until all food and beverages outlets, including the banquets facilities are closed. Incomplete posting will cause error in account balancing and complicate summary reporting.

In addition to completing the posting function the hotel night auditor verifies that all vouchers for revenue center transactions are posted.

Reconcile Room Status Discrepancies.

Room status discrepancies must be resolved in a timely manner since they can cause confusion in the front office. Errors in room status can lead to loss of room revenue. The front office must maintain current and accurate room status information to effectively determine the number and types of room available for sale. For example, if a guest checks out but the front desk agent fails to properly complete the checkout procedure the guest room may appear occupied when it is actually vacant. This could prevent the room from being rented until the error is discovered.

Before the end of the day the hotel night auditor reconciles discrepancies between the daily housekeepers report and front office room status report.

To minimize errors housekeeping department typically requires the staff to record the perceived status of all rooms served. The auditor must review front office and housekeeping department reports to reconcile and finalized the occupancy status of all rooms for a given night.

If the housekeeping report indicates that a room is vacant, but the front office believes it is occupied, the auditor should search for an active room folio. If the folio exists and has an outstanding balance there are several possibilities:

1. The guest may have departed but forgot to checkout.
2. The guest may be a skipper who left with no intention of checking out.
3. The front desk agent or cashier may not have properly closed the folio at checkout.

After verifying that the guest has left the hotel the hotel night audit should process the checkout and set the folio aside for management review. If the folio has been settled the front office room status system should be corrected to show that the room is vacant. The night auditor should verify the guest folio against the housekeeping and the room status report to ensure that all three are consistent and in balance.

Balance All Departments.

The hotel night audit process can become quite complicated when errors are discovered. It is generally considered more efficient to balance all departments first and then look for individual posting errors within an out of balance department.

The night auditor balances all revenue center departments using source documents. The hotel night auditor seeks to balance all front office accounts against departmental transactional information. Vouchers received at the front desk and other documents are totaled and compared to the revenue center summaries. Even fully automated hotels generally maintain source document because they can help resolve discrepancies should they arise.

Verify Room Rates.

The night auditor may need to complete a room revenue and account report. This report provides a means for analyzing room revenue since it shows the rack rate for each room and actual at which the room was sold. If the room rack and the actual rate do not match the night auditor should consider the following factors:

1. If the room is occupied by a member of a group or a corporate customer, is it a discounted rate is offered?
2. If there is only one guest in a room and the actual rate is approximately half the rack rate, is the guest part of the shared reservation? If he or she is, did a second guest registration?
3. If the room is complementary, is the appropriate supporting back up for the rate (for example, a complementary room authorization form)?

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