Night Auditing:
Night auditing is actually the audit process of taking inventory of the day’s
work. In other words, it is the activity of checking and confirming that
whatever transaction has been done during the day is correct and complete. Any
mistakes made during the day are corrected and balanced. The audit is done
during night and hence it is called as ‘Night Auditing’.
Night audit process:
Complete outstanding
postings
Reconciling room status
discrepancies
Balance all departments’
financial activities
Verify no show
Reconciling accounts
receivable
Preparing night audit
report
Deposit cash
Clear or backup system
Distribution of reports
Preparing night audit
report:
Depending upon the policy of the hotel and manager’s requirement, the number
and content of the night auditor’s report may differ. Some managers may require
more financial details than others. Those prepared for management review are
the final departmental details and summary report, the daily operations report
and high balance reports.
Night auditor’s report should be viewed as a functional tool. This provides
feedback on daily operations performance. Daily review of figures reported will
aloe management the opportunity to be flexible in meeting planned financial
goals.
FUNCTIONS OF FRONT OFFICE
AUDIT
The main purpose of front office audit is to verify the accuracy and
completeness of the guest and non-guest accounts against revenue centre
transaction report. Specifically the front office audit is concerned with
the following functions.
Verifying posted entries to
guest and non-guest accounts.
Balancing all front office
accounts.
Revolving guest credit
transactions against establish limits.
Generating operational and
managerial reports.
It is important to
understand that the front office audit is concerned with only front office
activities. The audit of food, beverage in room refreshment centre,
banquets, and other revenue outlets is usually the responsibility of the
accounting department and accure the day after these outlets close. Very
large hotels may require extensive staffs to audit food, beverage and other
revenue producing department.
In some small hotels, the front office auditor may perform several parts of a
complete audit in addition to the front office audit since there are fewer
revenue outlets in small hotels and the outlets are less complex.
JOB DESCRIPTION NIGHT
AUDITOR
Job Position
: Night Auditor
Category
: Supervisory
Responsible
to
:
Income accountant
Chief accountant
Job
definition
: Compile and audit all revenue transactions
and reconcile the revenue
statements of
outlets with the front office accounting
Machine with a view to prepare a daily
report
of the daily business.
Directly control/Supervisors
: Front Office cashier
Assigned area of
activities :
Front desk, Back office, Front desk
Cashier’s
cage
Hours of
operation
: Basically 8 hrs at night, but hired for job
Completion
Authority
: Can question front office and restaurant
Cashiers to ensure all transactions are
Accounted for.
Work
performed
:
1. Reconcile all revenue statements from
outlets with the machine.
2. Verify and validate front office cashier’s
vouchers/form.
3. Check guest folios.
4. Verify front office cashier’s reports.
5. Clean cashier’s NCR machine.
6. Prepare a statement of bills over all
specified
amount.
7. Prepare daily transcripts.
8. Audit night receptionist’s room report.
9.
Account for city ledger credit ledger
credit amount.
Co-ordinates
with
: 1. Front office cashier
2. All cashiers of revenue outlets.
CROSS CHECKING
Hotel departs may generate paper work to document transaction. For each
revenue centre transaction, the originally revenue centre classifies and
records the transaction type (cash, charge, or paid out) and its monitory
value. Front office personnel may review on online postings to ensure
that the appropriate guest or non-guest electronic folio has been properly
accessed. In addition, revenue centers not interfaced to the front office
system may need to use a voucher to communicate transactional information to
the front office for posting.
A front office system interfaces and transactional documentation to establish
accurate records and maintain effective operational controls.
Transactional documentation (either electronic or paper based) identifies the
nature and amount of a transaction, and is the basis for data entry into a
front office accounting system. This documentation may consist of charge
vouchers and other support documents.
For internal control purpose an accounting system should provide independent
supporting documentation to verify each transaction. In a non-automated
operation, supporting documents produced in different departments (e.g. a
coffee shop guest check and a front office guest folios) provide cross check
information. Although the front office auditor receives information on
room revenues from the front office system, the auditor should also check room
rate postings on guest folios against the housekeeping department report of
occupied rooms and the front desk registration file. This is commonly
called a bucket check , deriving its name historically from the old
registration card front desk storage file, which was frequently called “the
bucket”. This procedure helps ensure that accurate rates have been posted
for all occupied rooms and help reduce the occupancy errors caused when front
desk agents don’t properly complete check in and check out procedure.
Similarly it is possible that some food and beverage postings to guest and
non-guest accounts were documented through charge vouchers or guest non-guest
cheques from the revenue outlet to the front desk in such circumstances, the
restaurant’s register tab or sales journal can be used as a cross reference to
prove front desk posting.
The front office auditor relies on transactional documentation to prove that
proper front office accounting procedures have been followed. The
auditor’s review of daily posting of daily posting reconcilers front office
accounts with revenue centre and departmental records.
CREDIT MONITORING
Software responsible for
monitoring the credit limits of guest and non-guest’s accounts helps maintain
the integrity of the front office accounting system. Establishing line of
credit or credit limits depends on many factors. Such as credit card
company floor limits, the hotels house limits and the guest’s status or
reputation as a potential credit risk. The front office auditor should be
familiar with these limits and how they relate to each guest and non-guest
account. At the close of each business day. The front office auditor
should identify guest and non-guest accounts that have reached or exceeded
assigned credit limits (front office software can flag these accounts
automatically). These accounts are typically called “High balance
accounts” a report lighting high balance accounts or a high balance
report. Should prepare for appropriate front office management action.
VERIFY NO-SHOW
The front office auditor may also be responsible for cleaning the reservation
file or filling and posting charges to no-show accounts. When initiating
the electronic posting of no-show charges. The front office auditor must be
careful to verify that the reservation was guaranteed and the guest never
registered with the hotel. Some times duplicate reservations may be made
for a guest or a guest’s name may be misspelled and another record accidentally
created by the front office staff or system. If these are non identified
by front office reservations staff. The guest may actually arrive but
appear to be a no-show under the second reservation.
CANCELLATIONS
No show billings must be handled with extreme care. A front desk agent
who does not record cancellation properly may cause clients to be billed in
correctly. In correct billing may lead the credit card company to
revaluate its legal agreement and relationship with the hotel. In correct
billing may also cause the hotel to less the guest’s future business and the
business of the travel agencies or intermediary that guaranteed the reservation
front office staff must at here to establish no show procedures when handling
reservation cancellation or modification.
NIGHT AUDITING PROCESS
Transfer sheet wise total
of all guest ledger transcripts in to the recapitulate sheet. Total
each column of the recapitulation sheet.
Check all paid and endorsed
bills of the day separate out paid bills and endorsed bills.
Separate endorsed bills
into the once payable in foreign currency and other payable in Indian currency.
Prepare city ledger
transfer with the endorsed bills. Totals of city ledger transfer must
tally with the total of the transfer credit in the recapitulation sheet.
Prepare master food and
beverage sales summary from the sales summary received from different food and
beverage sales outlets.
Tally room sale prepared by
the receptionist in the night receptionist with the room count and house count
of the recapitulation sheet.
Tally room count and house
count prepared by the receptionist with the room count and house count of the
recapitulation sheet.
Check all non food and
beverage sales summaries from their sales points with the help of supporting
vouchers credit sales must tally with the total credit sale indicated for the
respective sales point in the recapitulation sheet.
Compare duplicate copies of
the restaurant vouchers with the restaurant sales summaries to check that
entries in cash and credit columns are in order.
Total credit sale of mater
food and beverage sales summary should tally wit the total of the food sales in
the recapitulation sheet.
Check all cash receipts
with the FOC & MC cash receipt and their corresponding entries in the FOC
& MC cash books.
Check all paid out vouchers
and allowance vouchers. Prepare summary of paid out’s and allowances.
Total of the paid out and allowances must tally with their respective total in
the recapitulation sheet.
Prepare cross sales
summary.
Prepare cash turn over
statement. Total of cash turned in and impressed should be equal to the amount
of cash in the cash book.
Prepare trial balance and
ensure that it tallies. Formula to tally trial balance is as follows.
PREPARE NIGHT AUDIT REPORT
The front office auditor typically prepares reports that indicates that status
of front office activities and operations. Among those prepared for
management preview are the final department detail and summary reports, the
daily operations reports, the high balance report and other reports specific to
the property.
Final department detail and summary report are produce and may be filled along
with their source documents for accounting divisions review. These
reports help to prove that all transactions where properly posted and accounted
for.
The daily operations report summaries the days business and provides insight
into revenues, receivables, operating statistics and cash transactions related
to the front office. This reports is typically consider the most
important out come of the front office auditor. The high balance report
identities guest whose charges are approaching an account credit limit
designated by the hold (house limit).
The software of an automates front office system may be programmed to produce
many management reports on demand. For example, the high balance report
may be produced at any time during the day as a continuing check on guest
transactions and account balances. Another important report is the daily
summary or flash report. The daily summary provides a snap short of
important operating statistics of the previous day, as well as month to date
totals. The hotel manager find this summary report very informative and
easy to read, they often read it at the start of a work shift. The daily
summary may also show an accompany and rate forecast for the new business
day, altering management to changes that may have happened over night.
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