Chapter 11The Front Office Audit

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Chapter 11The Front Office Audit

• Identify the functions of the front office audit
  and the duties of the front office auditor
• Describe the tools used by the front office
  auditor to balance the days transactions
• Identify the steps in the front office audit
  process
• Explain the function of a system update

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The Front Office Night Audit

• The Night Audit Process is intended to review and
  verify the accuracy and completeness of guest and
  non-guest accounting records each night.
• Why is it best for Hotels to generally perform
  these functions at the close of the accounting or
  hotel day?
• SYSTEMS UPDATES are done with computer-based or
  fully automated front offices where files are
  electronically updated as part of the audit
  routine.
• The Functions of the Night Audit are
• Verifying posted entries to guest and non-guest
  accounts
• Balancing all front office accounts
• Resolving room status and rate discrepancies
• Monitoring guest credit limits
• Producing operational and managerial reports

Pages 359-360
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• The Role of the Night Auditor involves the
  tracking of all rooms revenues, occupancy
  percentages, and other operating statistics. Also
  they are responsible for preparing the daily
  summary of cash, check and credit card activities
  that occur at the front desk and other revenue
  centers. This data reflects the financial
  performance of the hotels business day.
• Other Duties Would Include
• Establishing an End of Day (an arbitrary stopping
  point for the business day)
• Cross-Referencing (reviewing support documents
  for accuracy)
• Ensuring Account Integrity (all accounts are
  in-balance or proven correct for all departments
  concerned ) The night audit process is NOT
  complete until all guest and non-guest accounts
  are IN- BALANCE!!
• Monitoring guest credit ( producing the high
  balance report)
• Using the basic audit formula (PBDR-CR NOB)
• Preparing the Daily Transcript and Supplementary
  Transcript (used in manual and semi-automated
  hotels. Worksheets designed to detect various
  types of posting errors. see example 1 pg 364

Pages 360-364
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• The Fully Automated Night Audit process is the
  most efficient and reliable. Normally they are
  interfaced with the hotels point of sales
  equipment, call accounting systems and other
  revenue centers for quick, accurate automatic
  electronic posting to guest and non guest account
  folios.
• Most computerized front office accounting systems
  retain previous balance information for guest and
  non-guest accounts, along with appropriate
  transactional details in its electronic database.
• Pages 363-365

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• The Sequence of a Night Audit Duties
• Complete outstanding postings first step in the
  audit process
• Reconcile room status discrepanciesprevent lost
  and un-collectible room revenues and omissions in
  account posting
• Verify room ratesensure that room rates are
  indeed correct prior to posting
• Balance all departmental accountssee ex3 pg 369
• Verify no-show reservationslast person on duty
  to perform this task
• Post all room rates and taxesautomatically done
  to determine actual rooms revenue for business
  day

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Night Audit Duties

• Prepare require reportswhich indicate the status
  of the hotels revenue activity. These daily
  operation reports are typically considered the
  most important outcome of the front office audit
• Prepare cash receipts for depositonly if
  received cash, usually done by cashier on duty
• Clear or back-up the systemcontingency plan
  designed to safe-guard against any computer
  downtime
• Distribute reportsthe final step of the routine
  that deliver printed report to the respective
  managerial staff. Now often sent via e-mail
• Pages 365-374

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• System Updates are performed
• daily to enable
• System file reorganization
• System maintenance
• Report production
• End of day closure
• Due to the fact that room discrepancies are not
  avoidable, both the housekeeping and the front
  office departments must adopt systems that reduce
  these unwanted occurrences. With the use of
  automated systems, the housekeeping team can
  automatically update the room status in their
  computer thus making the front office aware of
  the correct status of the rooms.
• What is a ROOM VARIANCE REPORT?
• What is a CONTROL FOLIO? Pages 375-376

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Assignment for Chapter 11

• Answers questions 1,2,4,8 and 9 on page 378.