Since hotels operate 24 hours a day, seven days a week, the front office must regularly review and verify the accuracy and completeness of guest and non-guest accounting records. A hotel front office audit is necessary to fulfill this need.
The hotel front office audit, also known as the night audit, is generally performed during late evening hours, when hotel front office auditors could work with minimal interruption. Most hotel revenue outlets are closed during late hours allowing the night audit to include all revenue department transactions. Also, most hotels have an accounting day or hotel day that defines the daily business period of the hotel. The hotel front office audit closes the books on one hotel day, and when completed, initializes the financial records for the next day.
With a property management system, the audit may be called a system update, since property management system files are electronically updated on a continual basis as part of the audit routine.
FUNCTIONS OF THE HOTEL FRONT OFFICE AUDIT
The main purpose of the front office audit is to verify the accuracy and completeness of the guest and non-guest accounts against the revenue center transaction reports. The front office audit is concerned specifically with the following functions:
- Verifying posted entries to guest and non-guest accounts
- Balancing all front office accounts
- Resolving room status and rate discrepancies
- Reviewing guest credit card transactions against established limits
- Generating operational and managerial reports
The front office audit is concerned only with the front office activities. The audit of food, beverage, in-room refreshment centers, banquets, and other revenue outlets is usually the responsibility of the accounting department and occurs the day after these outlets close.
THE FRONT OFFICE AUDITOR
An employee who checks the accuracy of front office accounting records and compiles a daily summary of hotel financial data as part of the front office audit. The front office auditor tracks room revenues, occupancy percentages and other standard hotel operating statistics. The auditor also uses the property management system to prepare a daily summary of cash, check, credit card, debit card, gift card and other activities that occurred at the front desk. These data collectively reflect the front office’s financial performance for the day. The front office auditor summarizes and reports the results of operations to front office management.
ESTABLISHING AN END OF DAY
The front office auditor compiles balances and reviews the transactions posted to guest ledger accounts throughout the day. Each hotel decides what time will be considered the end of its accounting day. An end of day is the random stopping point for the business day. Usually the end of day is the time when a majority of outlets close or no longer have frequent activity. For casino hotels, with outlets constantly open, the end of day is determined by management as the best time to close the books, generally about 4 am or later. Transactions incurred during audit work time are considered part of the next business day.
THE BUCKET CHECK
The night auditor’s check of room rate postings on guest folios against the housekeeping department’s report of occupied rooms and the registration cards in the file is known as the bucket check. This procedure helps ensure that rates have been posted for all occupied rooms and helps reduce the occupancy errors caused when front desk agents do not properly complete check-in and check-out procedures.
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