FRONT OFFICE MANAGEMENT UNIT III

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.