LECTURE 6

• Night audit


  The control process whereby the financial activity of guests' accounts is maintained and balanced
• Night audit

  • Provides the necessary "objective overview" to evaluate the hotel's financial activity
  • Ability to monitor hotel revenues
  • Effect of marketing plans on related goals
  • Provides "day-to-day" monitoring, not just end of period review
• Duties of the night auditor

  • Checking in late check-ins
  • Checking out early check outs
  • Processing early/late reservations
  • Performing the duties of security guard
  • Monitoring fire safety systems
  • Performing cashier duties for banquet functions
  • Acting as manager on duty
• Night audit process


  1. Posting room and tax charges

  2. Assembling guest charges and payments
• Reconciling departmental financial activities


  Necessity to ensure that all posted guest charges and reported departmental balance
• City Ledger


  Collection of accounts belonging to non-registered guests
• Contents of accounts receivable

  • Direct billings
  • Master credit card accounts (Visa, MasterCard, etc.)
• Run trial balance


  First step in determining if posted guest charges and reported departmental charges balance
• Goal of preparing the night audit report


  To provide financial feedback for an immediate opportunity for managers to react and respond to variances as well as accurate guest folios and accurate city ledger folios
• Cashier's Report


  List of cashier activity of cash and credit cards and PMS totals
• Manager's Report


  Listing of occupancy statistics from the previous day, such as occupancy percentage, yield percentage, average daily rate, and number of guests
• Tips for restaurant, room service, banquet, and lounge employees


  • Origin of this figure is service fees paid to food and beverage employees
  • Cash figure can be verified against paid out slips, room service guest checks and credit card vouchers
• Room service


  • Origin of this figure is the total of sales by meal period for room service
  • Cash figure can be verified against the daily sales reports with accompanying cash register tapes or point-of-sale audit trail tapes
• Banquet sales


  • Origin of this figure is a total of guest checks that tally the individual banquet charges per meal category
  • Completeness of the total reported can be checked against the daily function sheet
  • Cash figure can be verified against the daily sales report of the banquet department
  • Used to evaluate the effectiveness of the food and beverage manager, director of marketing and sales, and to indicate cash flow
• Banquet bar and total lounge sales


  • Origin of this figure is from the point-of-sale cash registers
  • Cash figure can be verified against the daily sales report and cash register tapes or receipts
  • Used to determine how well cost control efforts have been maintained and the success of certain marketing and merchandising campaigns
• Room rentals


  • Origin of this figure is from meeting and function room rentals
  • Night auditor can verify the completeness of total rentals by cross-referencing the function sheet listings
  • Cash figure is verified against the room rental departmental daily report
  • Used to determine if room rentals have been maximized during slow banquet sales
• Telephone charges


  • Origin of this figure is from telephone charges reported for local and long-distance telephone calls that have been posted to the guest account
  • Cash figure can be verified against the telephone charges printout received through the call accounting system
  • Allows management to determine the profitability of this service
• Gift shop sales and tax


  • Origin of this figure represents sales and tax from this department
  • Cash figure can be verified from the gift shop daily sales report and cash register tapes or point-of-sale audit tapes
  • Management uses this information to examine profitability of this area and to predict cash flow
• Vending


  • Origin of this figure is from sales from various vending machines in the hotel
  • Cash figure can be verified from the departmental vending daily report
  • Management compares inventory usage with cash collected to monitor the integrity of cash collection and reporting activities
• Spa


  • Origin of this figure is sales posted to guest folios and cash sales in that department
  • Cash figure can be verified from the departmental spa daily report and vouchers posted to the guest folios
  • Management needs this information to examine profitability of this area, to predict cash flow, and to determine the effectiveness of marketing and merchandising campaigns
• Parking


  • Origin of this figure comes from sales received in cash, business checks, debit cards, credit cards, and transfers for guest parking
  • Cash figure can be verified from departmental parking garage daily report and transfer slips posted to guest folios, parking tickets, cash register tapes or receipt, and monthly parking permit renewals
• Total revenue and total write-offs


  • Represent all the cash and charge transactions for the day that reflect all the previously reported figures
  • Management will compare the actual and budgeted figures to determine how well operations have met financial goals
• Credit cards and cash applied to accounts receivable


  • Represent payments that have been received for application toward outstanding accounts receivable
  • Management monitors this figure to determine cash flow
• Analysis of accounts receivable


  • Maintained to determine the source of the account receivable
  • Allows the controller to monitor cash flow and determine the effects of various discount rates on the profit and loss statement
• Bank deposit and amount transferred to accounts receivable


  • Total bank deposit figure represents cash, and credit cards
  • Analysis of bank deposit provides sources of bank deposit (cash sales, credit cards and cash from accounts receivable)
  • Total bank deposit figure must match the total cash sales plus the cash received and applied to outstanding accounts receivable
  • Total of actual cash and credit card payments received (from the cashier's report) will match the total bank deposit figure
• Cashier's report


  • Provides a cumulative total of the cash, credit card vouchers, and checks from credit card companies
  • This is the amount of cash the desk clerk or cashier is responsible for producing in the deposit
  • Provides differences between actual and machine total
• Operating statistics


  • Provide a quick summary of the activities of the day and the succession meeting financial budget targets
  • Management will be able to take quick action to catch unprofitable trends
• Rooms available

  Number of rooms in the hotel which were operable for sale
• Rooms sold, rooms vacant, and rooms out-of-order


  Numbers cross referenced by assessing the housekeeper's module
• Rooms comp


  Figure reflected in the guest registration card and folios
• Number of guests


  Figure corresponds to the registration module
• Average daily rate


  Computed by dividing the room income by the number of rooms sold
• No shows


  Figure compiled by tallying the number of reservations with a confirmed status that did not show
• Room income


  Obtained from the total room rate postings
• Daily flash report


  Management tool to keep track of departmental totals
• Room sales


  Major source of income and provide most profit
• Departmental totals


  Such as food and beverage; watch for income and corresponding effectiveness of food and labor cost
• Occupancy totals


  • Feedback on marketing and sales efforts
  • Search for reasons for low occupancy
• Room sales


  Budget vs. Actual to compare sales efforts
• Restaurant sales


  Review individual meal periods against goals