Chapter 12 The Night Audit

Learning Objectives Develop an ability to recite without error the formulas associated with basic rooms statistics. Discuss the importance of the housekeeper’s report to management of the front desk. Understand the connection between the rooms management reports and the rooms forecasts.

The Auditor and the Audit (1 of 2) Point-of-Sale System Interfaces The nature of point-of-sale (POS) has changed drastically in the past few years Where hand-written and physically carried vouchers were the norm in the 1980s, today’s hotel departments use mobile, contactless, and NFC payment hardware and software solutions “Exception” alerts

The Auditor and the Audit (2 of 2) The Night Auditor Work Shift Graveyard Shift: 11/12 midnight to 7/8 AM Required to remain, until job is completed Relieves the “Swing Shift” and is relieved by the “Day Shift” General Duties Night Audit plus all Night Manager Duties in smaller hotels Security, FO, HK, Maintenance etc., Restricted to auditing duties only in larger hotels FO staff and others handle night operations 4

Overview of the Audit (1 of 3) Reconciling Accounts Receivable All businesses need to reconcile accounts periodically Hotels need to do it daily, as it may be too late otherwise! The Closeout Hour Hotels never close, so we have to pick a time to “close” “Closing” means one days accounts are closed and the next days accounts begin Most hotels chose midnight to “close” Can be done later, if F & B outlets are open later Later closing puts pressure on night auditors, but it accounts better for sales of outlets for the “day” 5

Overview of the Audit (2 of 3) Posting Room Charges Posting Room Charges Electronically Room and tax for all rooms is posted at the press of one button instantaneously Totals are updated automatically, and a summary made No math or entry errors! Room Charges Not Posted By the Auditor Day rate, use rate, part day rate guests Extra room charge for late check outs 6

Overview of the Audit (3 of 3) Revenue Verification Each folio (receivable) is updated nightly so an accurate bill can be presented on demand Total income earned by any one department (say, room service) must equal the total of individual room-service charges posted to guest folios

Reconciling Using a Property Management System (1 of 5) Interfacing Different Systems Turnkey Systems A standardized system installed by a vendor that the user simply “turns the key” to start (as opposed to designing a system from scratch!) Verifying Basic Data Closing Routine The press of one button does all steps of the manual night audit! Need to tally department totals with FO totals only if POS systems are not interfaced with PMS system Reports and print-out of folios generated automatically

Reconciling Using a Property Management System (2 of 5) Zip-Out Check-out Printed folio is put under guest room door late at night and amount is charged to credit card, guest comes to FO for check-out only if there is a problem Similar procedure can be done with in-room TV If guest needs a copy of bill, it can be mailed to them PMS Posting Errors (Exhibit 12-6) Errors still possible in PMS Mostly entry errors of cashiers System reduces errors by “rejecting” wrong entries Can be systematic errors due to bugs in the system 9

Reconciling Using a Property Management System (3 of 5) Reports form the Night Audit Exception Reports Highlights only exceptions from the norm Lists only those over credit limit as opposed to credit status of each guest Downtime Reports Print outs of core information in case of system breakdown Credit Reports Credit status of “problem” guests Reservation reports Report of rooms sold, un-sold, sold-by, demanded, refused, walked, projected occupancy etc. 10

Reconciling Using a Property Management System (4 of 5) Rooms Management Reports List of guests, rates, convention member, VIP, etc. Room Status Reports List of occupied, vacant, OOO, OOI rooms, etc. Accounts Receivable Reports Lists details of City Ledger, Credit Card transactions, departmental totals etc.

Reconciling Using a Property Management System (5 of 5) Report to the Manager A report of the key issues of the previous day Room Count, House Count, Room Income These are reported daily and accounted for Room Statistics Rooms sold, ADR, Occupancy%, Comps, RevPar are reported daily The Housekeeper’s Report