The Night Audit

The AudiTor And The AudiT

The night audit closes the hotel’s business day. It does so by reconciling the balances of the folios, the accounts
receivable. Because of the audit, corrected, updated, and accurate guest bills can be rendered at any time. That
is critical to the traffic flow of a hotel where guests come and go at all hours.
Audits have a secondary purpose. Sales (incomes) are the offsetting charges to folio postings. Folios are
charged when guests buy something. So the audit also proves the charge sales of all the departments, begin-
ning with rooms, food, and beverage. That is charge sales to the folios. Sales made by cash or by credit card are
not covered by the night audit because these sales do not appear on folios. The night audit audits only account
receivable sales charged to folios. Other sales types are audited by the income (or day)
audit, a topic for an accounting text.
Uncovering clerical mistakes was the original focus of the night audit. This procedure, which dates to the
1920s, used a paper-and-pencil form, called a transcript (see Exhibit 12). This chapter retains the transcript
as a means of explaining what takes place within the heart of the computerized audit, which is now carried out
by a property management system (PMS). PMSs and hand-posted records have the same goals. With tedious
hand-prepared audits, balancing the folio was the main thrust. With PMSs, the emphasis changes. Folio errors
are still being repaired; they just are not visible. Readers can see the pencil-and-paper folio, voucher, and tran-
script that make the records. With a PMS report, they see only the output: a printout. Readers who follow the
pencil-and-paper explanations of the chapter will better understand the not-very-visible electronic audit.

The night Auditor

Despite the title, the night auditor is not a trained accountant and is an auditor only by the broadest defini-
tion. In general terms, an auditor is an appraiser/reporter of the accuracy and integrity of records and financial
statements. One type of auditing, internal auditing, involves procedural control and an accounting review of
operations and records. Internal auditing also reports on the activities of other employees. It is these final two
definitions that best explain the role of the hotel night auditor.
No special knowledge of accounting or even of bookkeeping’s debits and credits is required of the night
auditor. That is why this chapter identifies accounting explanations in a different format and font. Having
this knowledge is helpful and desirable, but it is sufficient for the auditor to have good arithmetic skills,
self-discipline, and a penchant for detailed work. Auditors must be careful, accurate, and reliable. The latter
trait is an especially redeeming one because the unattractive working hours make replacements difficult to
recruit and almost impossible to find on short notice.

Work ShifT The audit crew works the graveyard shift, arriving between 11 pm and midnight. The shift ends
8 hours later, at 7 or in the morning. The night audit reconciles records that are needed to start the new day.
Failing to reconcile keeps the auditor on the job until everything is in balance, regardless of the hour.

GenerAl duTieS The audit staff of a large hotel consists of a senior auditor and one or two assistants. Other
front-office staff (guest-service agents and cashiers) may also be on duty. Their presence frees the auditors to
do their job without interruption. In smaller hotels, the audit team—often just one person—relieves the entire
desk, filling the jobs of reservationist, guest-service agent, cashier, telephone operator, and auditor. Whether or
not auditors assume these jobs, they must be conversant with them. These are the very duties covered by the
night audit.
When the actual tasks are taken on, the night auditor is likely to be the only responsible employee on
duty. The auditor assumes the position of night manager, whether the title is there or not. Problems are no

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 The Night Audit

different at night than they are during the day. Emergencies, credit, mechanical breakdowns,
accidents, and deaths are some of the nonaudit duties of the night auditor/manager.
Security and incident reports must be filed by either the night auditor/manager alone or
cooperatively with the security staff. Without a security contingent, the auditor may be the one
who walks security rounds and fire watch. At one time—prior to self-service elevators—auditors
had the company of a uniformed elevator operator.
Few hotels of less than 150 rooms employ a night engineer. So, often without adequate
preparation, the night auditor/manager faces serious engineering problems. Fire, plumbing
issues, power failures, elevator mishaps, and boiler troubles are matters that often take the audi-
tor’s time. Equally time-consuming are guest relations: A noisy party going into the early hours
of the morning, the victorious football team converging in the lobby, a sick guest waiting for
a physician, visiting conventioneers on the 11th-floor, paid reservations yet to arrive, and the
hotel 100% occupied. Such are the nonaccounting matters for which a lone night auditor is often
responsible.
Mature judgment and experience are needed to carry out these nonaudit functions. The
combination of audit skills, working hours, and responsibility merit a higher salary for the night
auditor than for the average guest-service agent, but the spread is not noticeably larger.

overview of the Audit

The night audit is an audit of accounts receivable, an audit of guest folios. Most hotel sales are
account-receivable sales. Guests obtain services such as room, food, and beverage with a signa-
ture, a promise to pay—an account receivable. Cash sales throughout the hotel are not the night
auditor’s responsibility. Income auditors (day auditors in contrast to night auditors) review cash
sales in conjunction with the general cashier. Folio sales (the night auditors’
work) passes the next morning to the same income (or revenue or day) auditors. Then both types
of sales, cash and credit, are combined. From that step comes the daily report to the manager (see
Exhibit 14) and, ultimately, entries into the hotel’s sales journal, the permanent records of the
business.

reconcilinG AccounTS receivAble Every business authenticates its accounts receivable

periodically. Whereas most businesses do this monthly or even less frequently, hotels do the job
nightly: the night audit. The night audit verifies the accuracy and completeness of each folio each
night. In so doing, it also verifies all charge sales made throughout the hotel that day.
Hotel auditors lack the luxury of time because hotelkeeping is a very transient business.
Arrivals and departures keep coming and going without notice at all hours of the day and night.
Each new day brings more charges and more credits whether or not the previous day has been
reconciled. There is no holding a departing guest until the folio is ready. The night audit makes
certain that it is ready!
The pressure of immediacy is missing with city-ledger guests. City-ledger receivables are
not registered, so their billing cycle is more like the accounts receivable of other businesses.
Depending on the nature of the original charge, city receivables are billed for the first time three
days—sometimes 10 days—after the charge is incurred.

The cloSeouT hour The night audit reconciles the records of a single day. Since hotels never
close, management selects an arbitrary hour, the closeout hour or close of the day, to officially end
one day and start the next. The time selected depends on the operating hours of the lounges,
restaurants, and room service of that particular hotel. Each new charge changes the folio, so the
audit is prepared when changes are infrequent—in the early morning hours when guests are abed.
Departmental charges before the closeout hour are included in today’s records. Departmental
charges after the closeout hour are posted to the folio on the following date, after the night audit
is done.
A late closeout hour captures the last of the day’s charges, but pressures the auditing staff.
Its job needs to be finished before early departures begin. Too early a closeout hour throws all
the charges of the late evening into the following day. This delays their audit for 24 hours. Many
guests are gone by then. Standardized, off-the-shelf stationery lists midnight as the closeout hour,
but the actual time is set by management.

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 The Night Audit

Posting room charges

Posting room charges during a pencil-and-paper audit is an onerous task in a large hotel. Posting
room charges during an electronic audit allows the staff time for coffee.

PoSTinG room chArGeS mAnuAlly Posting (recording) room charges is one of the
night auditor’s major tasks. Before the advent of the PMS, room charges were posted manually.
That required each folio to be removed one by one from the cashier’s well. The room
charge and the room tax were recorded in pencil, the column totaled, and the folio returned
to the well in room number sequence. Exhibit 1 illustrates postings on a manual folio: $60
recorded on the horizontal line labeled “rooms” and $3 for the tax.
Once the room charge and tax are posted, the night auditor adds the column, which
includes the previous day’s total. The second columns of Exhibit 1 illustrates
that addition. The new balance is carried forward from the bottom of one column to the top of
the column of the following day. In this manner a cumulative balance is maintained, and the
manual folio is ready at any time for the departing guest.

T H E C IT Y H O T E L # 8 001
ANYWHERE, U.S.A.

NAME B. M. Oncampus
ADDRESS 1 Campus Rd., University City
ROOM NUMBER 1406 RA T E 60
NUMBER I N THE PA RT Y 1 CL E RK ABC
DATE OF ARRI VAL 10/5 D A T E O F D E PA RT U RE 10/7
CHANGES: ROOM N O . T O RO O M N O . N E W RA T E

D A TE 10/5 10/6 10/7

B A L. FW D (19) 70
ROOMS 60 60
TA X 3 3
FO O D 10 12

BAR 6
TELEPH

LA U N D R Y
C A SH D I SB R 8 8
GARAGE

TR A N SFER S

TO T C H R G 81 70
C A SH
A LLO W A N C ES
TR A N SFER S 100
TO T C R D S 100
BAL DUE (19) 70

exhibiT 1 Pencil-and-paper folios (see also Exhibit 2) accumulate daily charges in separate
vertical columns. Figures from the column of a given day are copied onto a transcript sheet for
balancing during that night audit. Column 10/6 appears on line 1 of Exhibit 12. The initial value of
($19) is a credit; the hotel owes the guest.
Pencil-and-paper folios are no longer used. They are included throughout the text to illustrate
the relationship of the folio to the audit. That relationship is not visible with folios and audits
prepared by electronic property management systems. (For ease in reading, several illustrations use
small dollar values, which may not seem realistic.)

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 The Night Audit

Included in the cumulative total are departmental charges other than room. These are
posted throughout the day by the front-office staff as the charges arrive at the front desk from the
operating departments. Exhibit 1 shows these as food, bar, and garage. At this hotel, garage is
a concession. So the posting is a cash paid-out by the hotel to the garage company for the guest.

mAnuAl SySTem errorS With a manual (pencil-and-paper) system, the same values are
written repeatedly. Names, room numbers, and dollar values are recorded many times by differ-
ent individuals on reg cards and folios, vouchers, and control sheets. The night auditor rewrites
the figures once again: room rates, departmental charges, credits, and others. Writing, rewrit-
ing, and adding columns manually create numerous human errors that property management
systems avoid. Point-of-sale (POS) terminals (see Exhibit 2) communicate electronically with
PMSs. They bypass the need for written vouchers between the department and the desk.
Additional errors are inherent in a manual system. Poor handwriting is the most obvi-
ous one. When handwritten, figures such as 1 and 7, 4 and 9, and 3 and 8 are often confused.
Recopying also causes slides and transpositions. Slides are misplaced units, which may involve
decimals. Saying 53 21 mentally or aloud may result in either 53.21 or 5,321 being recorded.
Transpositions are similar errors, where the digits are reordered—53.21 may become 35.21.
Even simple addition causes problems. The auditor may create errors by incorrectly
totaling the folios, the control sheets, or the packets of vouchers. Adding machines help,
but there is no guarantee that the figures are entered accurately. Hand audits required

8/15/ LA GRANDE CASA 10:51 AM

RESTAURANT CHARGE POSTING FORM

NAME ALLEO, BUNNY ROOM 506 GRP#

FOLIO# 398665 SPECIAL INSTRUCTIONS
FOLIO BALANCE
A FOLIO 196.51
B FOLIO
REMARKS

CODE AMOUNT REFERENCE DESCRIPTION

FOLIO CASHIER CHARGE

A OR B Y OR N

RESTAURANT CHARGE CODES

1. COFFEE SHOP, LA CASA 4. KAPTAINS KORNER
2. STEAK HOUSE 5. ROOM SERVICE
3. QUARTER CALL LOUNGE 6. OTHER/BANQUET

exhibiT 2 The display screen of this point-of-sale (POS) terminal guides departmental cashiers
through the posting sequence. (See also Exhibit 8.) The posted charge appears instantaneously
on the folio maintained in memory by the property management system. Before a POS, cashiers
communicated by written vouchers, which had to be hand carried to the desk for posting, either with
a POS located there or manually. Poor handwriting and frequent handling increase the number of
errors when a POS is not used. That then becomes the focus of the hand-prepared audit.

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 The Night Audit

adding-machine tapes. These tapes were used for comparing the actual figures and those
entered into the adding machine.
Subtracting one total from another highlights errors. Errors of addition usually appear as
differences of 1 in the unit columns. If the difference in the totals is 1 cent, 10 cents, $1, $10, and
so on, the culprit is likely to be an error of addition. If not an error of addition, it might be a slide
or transposition. Slides and transpositions are flagged when the difference in the total is evenly
divisible by 9. For example, the difference between 53.21 and 35.21 is 18, evenly divisible by 9.
Searching for mistakes begins by looking for errors of addition, transpositions, or slides.

PoSTinG room chArGeS elecTronicAlly Electronic posting is easier and faster than
manual posting. There are no physical folios. Labor is saved in simply not moving 100, 500, or
1,000 folios in and out of a cashier’s well (cashier’s bucket). Room charges and taxes are not
posted individually. Folios are not totaled arithmetically. The property management system does
the work. Memory stores the room rates and taxes, updates the individual folios, and prints them
on demand. There are no errors of addition with a PMS. But they do crash! Not often, but an
emergency backup is part of every night audit. Exhibit 3 illustrates the nightly report that is pre-
pared at the close of each electronic audit. In form and content, it is much like the hand-prepared
transcript illustrated in Exhibit 12. Guest-service agents can work from the closing balance of
each folio (available by room number) even if the PMS crashes on the following day.

room chArGeS noT PoSTed durinG The niGhT AudiT In four special circum-
stances guest-service agents, rather than night auditors, post room charges. (1) Day rates
(also called use rates or part-day rates) is one instance. Guests arrive and depart before the
audit begins. (2) Extra room charges for late check-outs are another special
case. (3) During the heady days of the late 1990s, when occupancy was high and hotels thought
they could do no wrong, a penalty rate was posted by the day shift if guests failed to stay through

THE CITY HOTEL, ANYWHERE, U.S.A. Page 1

03/16 Guest Ledger Summary Report

Room # Name Folio # Open Bal Charges Credits Close Bal

3004 Huent 0457 –0– 81.30 .00 81.30

3005 Wanake 0398 65.72 91.44 .00 157.16
3008 Lee 0431 132.00 101.01 .00 233.01
3110 Langden 0420 –0– 99.87 100.00 0.13−
3111 Nelston 0408 233.65 145.61 .00 379.26
3117 O’Harra 0461 789.75 121.10 .00 910.85

6121 Chiu 0444 32.60− 99.87 .00 67.27

6133 Valex 0335 –0– 165.30 .00 165.30
7003 Roberts 0428 336.66 109.55 .00 446.21
7009 Haittenberg 0454 19.45 87.43 .00 106.88

Totals 44,651.07 18,632.98 950.00 62,334.05

exhibiT 3 A hard (printed) copy of closing folio balances is prepared nightly as part of the PMS audit and left at the
desk. The new day’s opening balances (last night’s closing balances, Close Bal) are then available in case the computer fails
the following day.
Each column of the report corresponds to a column of the pencil-and-paper audit. For example, the counterpart of the
Charges column of this exhibit is Column 16, Total Debits, of Exhibit 12. ”Charges” and ”debits” are interchangeable terms.

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 The Night Audit

their reservation commitment. (4) Guest-service agents sometimes post rates for paid-in-advance
guests. The posting coincides with the payment.

revenue verification
Night audits have two objectives. Reconciling accounts receivable is one. Each folio (receivable)
is updated nightly so an accurate bill can be presented on demand. By the time the night audit
begins, dozens, hundreds, or even thousands of charges will have been posted to guest folios.
Full-service hotels have charges from dining rooms and bars; local and long-distant telephone
calls; laundry and valet; greens fees; saunas; ski tows and in-room safes, films, and bars. A small
highway property may have room and tax postings only. But in both cases, the night audit proves
two things. One, that the income (the sale) has been recorded accurately; and two, that the guest
has been charged.
Ever y dep ar t ment a l charge has e qu a l debits and cre dits. E ach
service that guests buy has an offsetting income to one department or another. What takes place
individually—one folio being increased and one sale being recorded—has application to the
audit. A rule of mathematics—the total is equal to the sum of the parts—plays a fundamental
role in balancing the audit. Total income earned by any one department, say, room service, must
equal the total of individual room-service charges posted to guest folios. If each individual room-
service event increases a guest’s folio and simultaneously increases income to the room-service
department, then the totals of each should agree, that is, be in balance. Since there may be hun-
dreds of posting and hundreds of folios, this simple fact is not evident immediately. The night
audit reconciles the two by making evident this equality. In a nut shell, the audit asks:
Is the total income earned by each department from accounts receivable sales the same
total charged to guest folios?

The accounting rules are given below:

Increases in assets, including accounts receivable and cash, are made with debits.
Increases in incomes (sales of rooms, food, beverage, etc.) are made with credits.
Debit: Accounts Receivable/Guest’s Folio 50
Credit: Proper Departmental (room, food, beverage, spa, etc.) Sale 50
Explanation: Guest charged service in the whatever department. This single representa-
tion takes place with each service delivered. The audit proves, by departments, that the
total charged to each department (the aggregate of this individual entry) agrees with the
total charged to the many guests.

reconcilinG uSinG A ProPerTy mAnAGemenT SySTem

Property management systems have grown essential to hotel services as Exhibit 6 illustrates.
To many, the night audit provides the most spectacular demonstration of all. Only those who have
machine-posted using the NCR 2000 or 42001 system or hand-copied pages of transcript sheets
(see Exhibit 12) can appreciate the savings in time and efficiency. Labor savings, the often touted
but seldom delivered advantage of computer installations, is certainly evident in the PMS night
audit. Since a minimum crew is always needed, the greatest labor savings are at the largest hotels.
The computer altered the mechanics of the audit, its purpose, and its scope. Traditionally, the
night audit concentrated on finding and correcting errors—except the errors were caused by the sys-
tem itself. Initial errors, transmittal errors, posting errors, and errors of addition are inherent in a pen-
cil-and-paper audit. The entire thrust of the hand audit is discovery and repair. The computer audit
has no such problems. The information that is input with the departmental POS appears everywhere,
and everywhere it appears the same. Of course, there are errors of input, and these are discussed next.

1
NCR is the abbreviation for the National Cash Register Company, which developed an electro-mechanical posting
machine for hotel folios and bank passbooks. The initial product was the NCR 2000, ca 1921. It was an economic success
because Ellsworth Statler bought the 2000 for his entire chain. Then came a second try, a much-improved, easier-to-
operate product, the NCR 4200. It, in turn, was replaced by the rooms module of the earliest version of the property
management system, ca mid-1980s.

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 The Night Audit

interfacing different Systems

The property management system began life as a rooms-department device—a replacement for
the NCR audit. (In turn, the NCR posting machine had been a replacement for the pencil-and-
paper audit.) Additional tasks, called interfaces, were affixed to this new rooms-department
device as it gained capacity. Linkages were added to support point-of-sale (POS) terminals
in food and beverage outlets. Then came call accounting systems (CAS), a type of automated
POS for telephone charges. These and other interfaces, including linkages between equipment
made by different manufacturers, created equipment issues. One manufacturer made the PMS,
another the POS, and still a third created the interface linkage. The system grew willy-nilly.
Additional interfaces such as in-room minibars, housekeeping status, and reservation pro-
grams were added again and again. The more the merrier, but the more frequently the early
systems crashed.
The American Hotel & Lodging Association along with large franchisors and hotel
chains encouraged manufacturers to develop and adopt Hospitality Information Technology
Integration Standards (HITIS). HITIS improved the compatibility of different products by
different manufacturers and reduced the frequency of computer downtime. HITIS allowed for
seamless connectivity, particularly communications between franchisor’s res centers and the
franchisees’ properties. Common reservation equipment and programs have made last-room
availability widely accessible.

Turnkey SySTemS With a turnkey installation, the buyer/hotel merely “turns the key” to
activate the PMS. The vendor has programmed the system including the reports. Nothing is ever
quite that easy, but it is unlikely that the industry would be so far along if the burden of develop-
ment had not shifted from individual hotel companies to industrywide vendors.
Prior to the turnkey concept, each hotel shopped among manufacturers for its own hard-
ware. Then it developed its own software by employing computer specialists, who at that time
knew nothing about the business of keeping a hotel. The large data processing departments that
appeared as a result of in-house programming disappeared quickly with the introduction of the
turnkey package.
Now systems are purchased off the shelf, shopping among suppliers for an existing
system that is close to what the hotel needs. And systems are close to what is needed.
Generic programs are much alike because hotels are much alike. What differences there are
in off-the-shelf products diminish as the latest programs are developed. Each generation
improves flow and screening. To remain competitive, new or missing functions are added.
The movement has been toward a Windows/Intel environment with dragged icons, touch
screens, and reduced training time.
Turnkey companies now dominate the field. Single suppliers furnish both the hardware
and the software. If the supplier specializes in one segment, other vendors supply the missing
parts. Responsibility remains with the primary vendor, who puts together the package, gets it up
and running, trains the staff, and services the installation—not without some major grief for the
hotel, of course.
Vendors who adopted Hospitality Information Technology Integration Standards suc-
ceeded because their systems interfaced with the other manufacturers who complied. Hotels that
specified HITIS in their bid solicitations enjoy reduced risks, lower costs, and savings in instal-
lation time. Access to the World Wide Web changed the hotel’s PMS from one with dedicated
hardware to one using Web technology. As that happened, the front-office workstation became a
general-purpose rather than a specific-purpose screen.

verifying basic data

Both pencil-and-paper audits and electronic audits summarize the day’s activities at the closeout
hour. Although either could be done at any time, preference is for the quiet hours of the business
day when there is little posting activity; hence the term “night audit.” The late hour is especially
important for the PMS audit because departmental POS terminals are shut down temporarily.
Changes to guest folios must wait until the audit is finished. Manual audits were not quite as lim-
iting. With much erasing and rewriting, pencil-and-paper audits accommodated folio changes
during the audit process.

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 The Night Audit

cloSinG rouTine Every night audit has a fixed routine to follow. For the PMS, the major
procedure is monitoring. Room charges and taxes are posted automatically. So is the cumulative
balance on each folio. In contrast, the pencil-and-paper auditor had to write the values and add
the columns.
The PMS audit sets the stage for tomorrow with a summary printout illustrated by
Exhibit  3. It does so because the closing balance of one day (the summary printout) is the
same value as the opening balance of the following day. That is also true of the pencil-and-paper
transcript sheet, Exhibit 12. This is so because the audit is an inventory of accounts receivable.
And with any inventory count, the value that closes one period’s is clearly the value that opens
the next period.
It is somewhat redundant to point out again that verifying departmental revenues is part of
the audit. Each time an account receivable (folio) is charged, a counterbalancing record should
appear as income for one of the operating departments. Unlike pencil-and-paper systems, PMS
discrepancies are rare. POS terminals automatically record the same figure on the folio and the
departmental revenue. Pencil-and-paper audits have numerous handwritten entries. First by
the departmental cashier, then the guest-service agent who posts to the folio, then the auditor.
Each contributes handwriting errors, misplaced values, and mathematical mistakes.
The night auditor finishes the PMS audit with an end-of-the-day routine much like that of
the hand audit (see Exhibit 4). A trial balance of debits and credits is made. Debits are charges
to the receivable folios; credits are earnings in the several departments. The day and date are
closed and the next day opened. The POS terminals are put back online. Monthly and annual
totals are accumulated as part of the reporting process that follows next. The sequence varies at

Closing Routine for Position of Combined Night Auditor/Guest-Service Agent

Attend to Relief of the Previous Shift
Compare late arrivals (reservations) with room availability
Examine the front-office log
Retrieve keys to drawers; watchman’s clock; etc.
Review issues: messages to be delivered; equipment failures; noisy revelers
Set wake-up-call clock if equipment is not yet automated
Verify cash drawer if cashier’s banks are carried over
Walk the first safety patrol/fire watch while previous shift is still on duty
Witness cash turn-in of previous shift’s deposit
Before the Income Audit
Check cashier’s bucket; many desks use it for special messages
Close POS interfaces
Post any vouchers not yet posted
Prepare non–dollar denominated reports such as:
In-house list (night clerk’s report)
Tomorrow’s arrival list
Tomorrow’s departure list
Sell nonguaranteed room reservations
During the Income Audit
Identify special-case folios: high balances
Match due-bill folios with due bills, if any
Post room and tax charges
Print folios for under-the-door delivery
Reconcile audit: Source documents agree with folio totals and departmental incomes
Total and reconcile coupons

exhibiT 4 In many hotels, the positions of night auditor and guest-service agent are combined.
But even small properties support the auditor with security personnel. A chronological/alphabetical
list such as this gives order to the night’s work and assures everyone that the required tasks have been
completed.

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 The Night Audit

Following the Income Audit

Back up data
Charge no-shows who have guaranteed arrivals with credit cards
Complete the night auditor’s report to the manager
Leave completed materials properly sequenced for the day auditor
Prepare reverse housekeeper’s report
Prepare dollar-denominated reports
Prepare statistical reports
Reconcile credit cards and prepare reports
Reconnect POS interfaces
Reset all systems for the new day
Verify credit-card revenues and prepare appropriate reports
Other Duties
Coordinate with incoming shift
Deposit cash collections with cashier’s report after relief shift arrives
Interact with guests as needed
Maintain log
Monitor lights and door locks
Set up continental breakfast
Walk a fire/security watch

exhibiT 4 Continued

each hotel. At some properties, the routine is preprogrammed; at others, the update proceeds by
prompts from the system to which the auditor responds. Almost every hotel anticipates tomor-
row’s check-outs by printing copies of the folios. That is part of the zip-out check-out routine.

ZiP-ouT check-ouT Express check-out is one of the exciting spin-offs of PMS installations.
Standing in line to check out is the bane of hotel guests, who are always in a hurry to depart.
Flexible terminals able to shift quickly between registration and departure were an early PMS
innovation. This increased the number of front-office stations when demand was greatest. Lines
were shortened, but not enough because early output printers were very, very slow.
Hoteliers responded. Folios of guests who were departing the following day were printed
as part of the audit. Preprinting folios sped the check-outs when they came to the desk. Copies
were filed by room number sequence in the cashier’s well and produced without delay when the
departing guest appeared at the desk. If subsequent charges—breakfast, for example—altered the
previous night’s balance, the old folio was merely discarded and a new one printed.
This routine fell into disuse as express check-out gained favor. From printing folios to deliv-
ering them under the guest-room door was not a large conceptual jump, but it created express
check-out or zip-out check-out, also called speedy check-out, no-wait check-out, or VIP check-out.
Zip-out check-out is only for guests using direct billing or credit cards—but that is almost every-
one. At first, guests who wanted the service completed a request card. Later, every departure
using a credit card had a folio under the door. If the folio is accurate, the guest leaves after com-
pleting one additional step. Notice is given by telephoning a special extension, using the TV, or
dropping the room key and a form into the lobby box (see Exhibit 5). The final folio is mailed
or emailed to the guest within a day or two, and the charges are processed through the credit-card
company.
Express check-out leaped ahead with the interface of Spectradyne’s TV pay-movie system
into the hotel’s PMS. Delivering folios to the rooms was supplemented by showing the folio on
the TV set—showing it any time the guest wanted. From then on, the procedure was the same.
With a click of the remote control, the guest signaled departure. As with zip-out check-out, the
folio followed in the mail, and the credit-card charges were processed. The integrated PMS can
transfer those charges, which have been accumulating in the front-office folio, to the city ledger
module.
Interfacing the ever-expanding PMS with self-service check-in/check-out terminals was
another progression. At freestanding lobby locations, self-check-out terminals present guests with
their folios and accept their credit cards to speed them on their way. Having guests leave using

370
 The Night Audit

EXPRESS CHECK-OUT

DO NOT DEPOSIT CASH

IN THIS ENVELOPE

To expedite departure, we are pleased to offer you

EXPRESS CHECK-OUT privileges. Please complete
the information below and deposit the envelope, with
your room key enclosed, at the front desk in the key
drop box.

Room Number Date

Name

Address
exhibiT 5 Express check-
City State Zip out began with the procedure
described on this envelope. As
Do you require a copy of your account?
property management systems
Would you prefer an email copy? matured, zip-out check-out
If so, what is your email address? sequenced to the TV set, then to
lobby consoles and most recently
VIDEO CHECK-OUT IS ALSO AVAILABLE to efolios. The PMS allows guests
to make a speedy departure
THROUGH THE IN-ROOM TELEVISION SET!
but keeps the system updated
on room status and accounts
receivable.

the very terminal at which they registered was another giant step.
Each expansion of the PMS (see Exhibit 6) brings the industry a step closer to the fully
electronic hotel.

PmS PoSTinG errorS Property management systems are not error free. Staffers make mis-
takes whether the system is manual or electronic. Human errors are not offset by high-priced
equipment. Computerized front offices minimize errors and facilitate corrections, but they do
not create error-free environments.
Getting a detailed list of transactions is the first step in reconciling total departmental
sales that differ from total departmental charges on guest folios. A hard copy (a printed copy)
itemizes transactions by POS terminals and by reference codes. Cashiers must enter a code
number and usually a voucher number before a charge can be recorded on a folio. The code num-
ber is automatic with many POSs that are permanently located in a particular service area, say,
the coffee shop. The voucher number is the guest check.
A third code, the guest’s room number, is also required. Some terminals require another
element, the first three letters of the guest’s surname. Postings will not clear without the required
information. Exhibit 2 illustrates the screen that a dining room cashier uses to post charges.

371
 The Night Audit

The Many Interfaces of the PMS

Have been Integrated
to Make a Successful Installation

ACCOUNTING BELLS
City ledger Baggage tracking
Credit cards Front sequence
Room taxes Garage/Auto records

COMMUNICATIONS ENGINEERING
Call accounting Elevators
Kiosks Energy
Web Maintenance calls

FRONT DESK GENERAL MANAGEMENT

Concierge Human resources records
Folios Payroll
Registration PROPERTY Sales and catering
MANAGEMENT
GUEST ROOM SYSTEM HOUSEKEEPING
In room: bar; films; safe Lost and found
Keycards Specials: Turn mattress; do mirrors
Video games Track floor housekeepers

NIGHT AUDIT RESERVATIONS

Reports Central reservations systems
Point-of-sale terminals Groups and packages
Posting rates and taxes Travel agents

ROOMS MANAGEMENT SCHEDULING OF

Condo control & rentals Labor
Foreign currency conversions Inventories
Yield management system Periodic maintenance

SECURITY
Automatic telephone dial
Enunciated exit instructions
Handicapped help button

exhibiT 6 Property management systems began life as front-office-records devices. They matured to interface
and integrate many functions of a busy hotel. Touchscreen technology facilitated the consumer’s role.

Matching the guest-room keycard (with its magnetic strip) to the PMS’s registration data
file is another means of verifying the user’s identity. The guest inserts the keycard into a POS and
the system verifies the identification. Implementation of this system has already begun, but it
may be replaced even before it goes into general use. Credit card may become the keycard for
the next generation of electronic locks. The POS reduces receivable losses by rejecting invalid
postings. The guest may have checked out already, be a paid-in-advance customer with no
charges permitted, or have exceeded the credit-card floor or other credit ceiling set by the hotel.
Late charges are reduced dramatically when POS terminals are in place.
Departing guests sometimes challenge the accuracy of departmental postings. Denying
that the charges were ever made, they ask the front desk for offsetting allowances. Obtaining a
copy of the check (voucher) signed by the guest to show its accuracy was a slow process with a
pencil-and-paper system. So time-consuming was it that front-office cashiers simply granted the
allowance without further investigation. Until recently, the results were the same with a PMS.

372
 The Night Audit

Now disputed charges are being met with proof in a program first introduced at the Boca Raton
Resort and Beach Club. The PMS is able to display the protested, signed voucher!

reports from the night Audit

It is difficult to say whether a uniform need created the turnkey system or whether mass
production created standardization across the industry. Perhaps, it was a bit of each. The result-
ing uniformity is most evident in the reports that the night audit churns out—reports that
provide management with critical information. Many are viewed on screens throughout the day
as circumstances change and management decisions are needed. They are also formalized by
nightly printouts covering a range of topics. Exception reports and the daily report to the man-
ager, discussed later, are the most carefully examined.
An unlimited number of reports can be generated once the PMS captures the information.
Data can be arranged and reordered in a variety of ways. The registration card is a good example.
From it the PMS creates reports about the geographic origin of guests; the membership of group
attendees; company affiliations; the frequency of double occupancy; average length of stay
and more.
The ease of obtaining reports undoubtedly contributed to the vast numbers that were
demanded when PMSs were first introduced. Much of that has shaken out. Management took
control and pared the numbers by emphasizing exception reports. One no longer sees piles of
trashed reports, which the night auditor prepared, unread by the recipient the next day.
Still, the night audit produces a wide range of reports. Many of these are day-end summaries,
since unit managers use (through display terminals or hard-copy print) the same data several
times throughout the day. Some reports are carry-overs from the traditional pencil-and-paper
audit. The balance of each accounts receivable, credit alerts, and statistical reports to the manager
are among them.

excePTion rePorTS Exception reports highlight digressions from the norm. Reporting
everything that happens overwhelms the user. Reports by exception alert the reader to prob-
lem areas and do so without a time-consuming inspection of all data. A credit-limit report best
illustrates the group. Listing the folio balance of every guest requires a tedious search to uncover
possible problems. An exception report lists only those folios close to the hotel’s ceiling. There is
no need to scrutinize pages of data to find a problem. Such reports grab management’s immedi-
ate attention and action whereas cumbersome reports are usually put aside for later examination,
which never takes place.

Allowance Report: identifies who authorized each allowance, who received the allowance, the
dollar amount, and the reason behind it.
Cashier’s Overage and Shortage Report: pinpoints, by stations and persons, overages, and
shortages that exceed predetermined norms.
Comps Report: is similar to the allowance report; identifying who authorized each comp, who
received the comp, the amount and the reason.
No Luggage Report: lists occupied rooms in which there is no baggage (see Exhibits 15
and 16).
Room Rate Variance Report: compares actual rates to a standard rate schedule and identifies
the authority for granting the variance. (Not meaningful if the hotel is discounting frequently and
deeply.)
Skipper Report: provides room identification, dollar amount, and purported name and address.
Write-Off Report: lists daily write-offs, usually late charges whose account balances are too
small to pursue or less than a specified amount. Includes the occasional bad debt that is deemed
uncollectible.

doWnTime rePorTS These reports, used when the computer crashes, provide insurance
against disaster. Like a great deal of insurance, the reports usually go unused because emergen-
cies rarely materialize. Downtime reports are dumped 24 hours later when the contingency has
passed and the backup reports of the following day have been printed.

373
 The Night Audit

Folio Balance Report: itemizes the previous day’s record of each account receivable (the folio)
in room number sequence. Exhibit 3, the Guest Ledger Summary Report, is a balance of folios
comparable to Columns 1, 2, 4, and 5, 16, 20, 21, and 22 of a pencil-and-paper transcript (see
Exhibit 12).
Guest-List Report: alphabetizes registered guests with their room numbers. It is a computer ver-
sion of a manual information rack. It would remain at the desk as a reference until tomorrow’s
new arrivals and departures made last night’s record obsolete.
Room Status Report: identifies vacant, out-of-order, on change, and occupied rooms for the
beginning of the new day (the close of the old day); a computerized room count sheet (see
Exhibit 13, a pencil-and-paper report).
Disk Backup: is not a report, but part of the closing sequence of the auditor’s shift. Data are
replicated onto a disk to be retrieved if a malfunction erases the working disk.

crediT rePorTS The night auditor is the credit department’s first line of defense. In that
capacity, the night auditor reports both routine matters and special credit situations.
Mention has already been made of the auditor’s responsibility to preprint the folios of
expected check-outs. Although not nearly as numerous, folios must also be prepared for guests
who remain longer than one week. On the guest’s seventh night, the auditor prints the folio for
delivery to the guest the next day.
The night auditor also makes an analysis of guest account balances. With a manual system,
the auditor scans the last column of the transcript (see Exhibit 12, column 21) and itemizes
those rooms with balances at or near the hotel’s limit. The computer makes the same list, an
exception report. If the audit team has time, additional credit duties may be assigned. All credit
reports are time sensitive and may be viewed as exception reports:

Credit-Alert Report: lists rooms whose folio charges exceed a given amount in a single day. That
value varies with the class of hotel.
Cumulative Charges Report: is similar to the credit-alert report except that it includes cumula-
tive charges for the guest’s entire stay.
Floor Report: lists guests whose folio balances approach the maximum allowed the hotel by
the credit-card company (the hotel’s floor) or the maximum the credit card allows on the guest’s
own card.
Three-Day Report: highlights folios unpaid three days after billing.

reServATion rePorTS Computerizing reservations added a new dimension to the process.

The toll-free WATS number globalized the reservation network. Instant confirmation was given
for dates that were months away to persons who were miles apart. In so doing, reams of informa-
tion—fodder for reports—were generated.
Information is the power to decide. Reservation managers must know the number of rooms
sold and the number available, by type, rate, and accommodations. They must know the number
of arrivals, departures, stay-overs, cancellations, out of orders, and walk-ins. This information
comes to the reservations department in a variety of reports.
Supplemental information flows from the same database. Which rooms are most popular
and at which rates? Do no-show factors vary with the season and the day of the week? If so, by
how much? How many rooms in which categories (i.e., kings) are turnaways? How many reser-
vations were walked? How many in-WATS calls were there? How many were initiated by travel
agents? Questions of this type illustrate again the dual management–operations capability of the
property management system.
An alphabetical list of arrivals is an example of the computer in operations. It reduces the
number of lost reservations and facilitates the recognition of VIPs. It helps the bellcaptain sched-
ule a crew. It identifies group affiliations, which improves reservation and billing procedures.
As with all of these reports, reservation data can be displayed on a monitor or preserved on
hard copy for further digestion and evaluation. A permanent copy turns the data into a report.
Then it serves more as a management tool than an operational one.

374
 The Night Audit

Arrivals Report: alphabetizes a list of the day’s expected arrivals, individually and by groups.
Cancellation and Change Report: lists reservation changes including reservations and cancella-
tions for the day and for later dates.
Central Reservations Report: analyzes reservations made through the central reservations
system, including numbers, kinds, rates, and fees paid.
Convention (Group) Delegates Report: is a compilation of group (and tour) room blocks, the
number of rooms booked, and the number still available by rate category and name of group.
Also called a Group Pickup Report when used for a specific day.
Daily Analysis Report: computes in one or more reports the number and percentage of reserva-
tions, arrivals, no-shows, walk-ins, and so on, by source (travel agent, housing bureau, etc.) and
by type of guest (full rack, corporate rate, etc.).
Deposit Report: lists deposits requested and received, deposits requested and not received,
deposits not requested. Could be treated as an exception report.
Forecast Report: also called (extended arrival report, future availability report) projects reserva-
tion data forward over short or long durations.
Occupancy Report: projects occupancy by category of room.
Overbooking (Walk) Report: identifies by names the reservations walked, the number of
walk-ins denied, and the number farmed out to other properties.
Regrets Report: provides a count of the number of room requests denied.

roomS mAnAGemenT rePorTS The PMS has brought major procedural changes to the
front office but not to the functions that need doing. Comparisons of the old and the new are best
illustrated through the room rack. Unlike manual room racks (see Exhibit 9), which one can
see and physically manipulate, computerized racks are in memory, viewable only on the monitor
screens (contrast Exhibits 7, 8, 9, and 10). Whether the clerk turns to the manual

SELECT ROOM AVAILABILITY

HOTEL ALIONETTE 10:23 AM AUG 4, __

ROOM TYPE LOC CONN ADJN STATUS COMMENTS

NO $ WITH WITH

1101 K A N 1103 OCC NEAR ELEV

1102 K A N 1104 OCC
1103 T B N 1105 OOO UNTIL 8.6
1104 T B N 1106 OK
1105 T B NW 1107 OK
1106 P P W 1108 OK
1107 Q C SW 1109 OK
1108 S D S 1110 OCC EARLY ARR
1109 DD E S 1111 OK
1110 DD E S 1112 OCC
1111 Q C S 1113 OCC
1112 Q C S 1114 OCC

SELECTION RETURN TO SELECT

ROOM TYPE ACCEPT (Y) exhibiT 7 Computer
ROOM NUMBER
screens, such as this one, have
replaced the front-office room
rack (Exhibit 9). Both pieces
of equipment display the same
information. Here, it’s room
availability by type, location,
rate, and status. The guest-
service agent completes the
assignment, exiting with a “Y”
(Yes)—lower right—once the
selection that’s made agrees with
the previous input of room type
requested. (See the master screen
of Exhibit 8.)

375
 The Night Audit

3/3/ 2:29 PM

HOTEL UNIVERS
FRONT OF THE HOUSE MENU

1. RESERVATIONS 5. CREDIT
2. REGISTRATION 6. POSTING
3. GUEST NAME INQUIRY 7. TELEPHONE
4. ROOM STATUS 8. REPORTS

INPUT NUMBER

USER CODE ID

exhibiT 8 Pictured is the PMS’ main rooms menu. It offers 8 screens, of which Exhibit 7 is
one, as the equivalent of a room rack (Exhibit 9). Several screens are used in sequence before the
function is completed. The PMS captures the data during other procedures, registration for example,
whereas the room rack is constructed separately.

exhibiT 9 The manual room

rack was in place well into the
1970s. One glance told the room
clerk which rooms were vacant
(no room-rack slip), which were
occupied (names appeared on
the rack slip), and which were
reserved (room 911). The slips
showed the guests’ arrival and
expected departure dates (right
corner of the slip); their rates and
hometowns. Different-colored
slips (not shown) identified
group members, paid-in-advance,
permanent guests, VIPs, and
more. (For ease in reading,
several illustrations use small
dollar values, which may not
seem realistic.)

376
 The Night Audit

HOTEL UNIVERS
11/3/ 8:55 AM

1111 SPRATT, JACK VIP

JACK SPRATT NUM 1

6006 SUET LANE ARR 10/30
HOG WALLOW, N.J. DEP 11/4
23331 RAT 92

TALLOW RENDERING CO CLK JJV

FAT FARM GROUP

CHM BOARD

ENTER CODE

exhibiT 10 Code 3 of Exhibit 8 (Guest Name Inquiry) opens the screen that identifies
individual guests. Compare this information with the room-rack slips of Exhibit 9. Both contain the
same facts including the guest’s name and address, number in the party, rate, arrival and departure
dates, group membership, and the initials of the guest-service agent who registered the party.

rack (Exhibit 9) or the computerized one, the information is the same: room rates, connecting
and adjoining rooms, bed types, and room status.
The computer restructures the data. It separates into different windows (see Exhibit 8)
what is visible with one glance to the user of the manual rack (see Exhibit 9). The separate menus
of Exhibit 8 are needed to view what the manual rack identifies as one class of information.
With a glance at the manual rack (Exhibit 9) one sees the rooms vacant and occu-
pied, the rooms out of order and on change, the names of the guests and their city of residence,
the number in the party and their company or group affiliation, the rate on the room and the
anticipated check-out date. It doesn’t work that way with an electronic system, where separate
programs are needed for each function. Room identification (see Exhibit 7) is different from
guest identification (see Exhibit 10). Not so with the manual room rack.
Far more information is available from the computer rack than from the manual rack
of Exhibit 9, but the information has to be manipulated to provide the data. For example,
the computerized rack can display all the vacant rooms on a given floor. All the king rooms
in the tower or all the connecting rooms in the lanai building can be listed. Facts that would
take many minutes to ascertain, if at all, from the manual rack, are flashed onto the screen in
seconds.
Information is more complete and can be processed more rapidly with the computerized
rack than with the manual one. This is true for the whole, although a greater amount of time may
be required for the computer to process a single fact. In a contest to identify a guest whose name
begins with either “Mac” or “Mc,” for example, the manual user of an information rack (a manual
alphabetical listing, not illustrated) should be able to beat out the computer user.

377
 The Night Audit

Change Report: identifies changes in rooms, rates, and numbers in the party of guests who are
already in the house.
Convention-Use Report: summarizes room use by different convention groups in order to jus-
tify the number of complimentary rooms.
Expected to Depart Report: lists anticipated departures. The converse would be a Stay-over Report.
Flag Report: alerts desk to rooms flagged for special attention.
House-Use Report: counts and lists rooms occupied by hotel personnel.
Out-of-Order Report: advises the number, identity, and reason for of out-of-order or out-of-
inventory rooms.
Pickup Report: identifies by name and room numbers the identity of group members to be
charged against its block.
Rate Analysis Report: displays the distribution of rates by sources—reservations, walk-ins,
travel-agency, res system, hotel sales department, packages, and company made.
Room Productivity Report: evaluates housekeeping’s productivity in total time and by indi-
vidual room attendant. (See Exhibit 11.)
VIP Report: identifies distinguished guests (DGs) and very important persons (VIPs) including
casino high rollers.

roomS STATuS rePorTS The PMS’s Rooms Status Reports offer one of the best examples of
an old function with a new face. That function, room status, relies on frequent communication
between the desk and the linen room, housekeeping. The desk needs to know which rooms are
ready for sale; which are on-change; and which are vacant and ready, out-of-order, or occupied.
Housekeeping needs to know which rooms require attention. Room status is referenced innu-
merable times throughout the day by both ends of this communication link.
Computers haven’t changed the framework of room-status reporting. The cashier still puts
the room on change as the guest checks out. (This is done electronically if the guest uses the
speedy check-out option.) That is how the room clerk learns that a given room will be available
soon. On-change status tells housekeeping that the room needs attention. When the room is
clean, the housekeeper updates the system, switching the on-change room to ready. Immediately,
the desk clerk has the information. The room is sold and the cycle begins anew. The faster the
process goes around, the quicker the new guest is settled and the room sale consummated.
Prior to the computer, the cashier–desk–housekeeping link took different pathways. Either
there were direct person-to-person conversations—the housekeeper would walk to the desk—
or pencil-and-paper notations were sent back and forth or the telephone was used. Frequently,
there was no contact at all. Regardless of the system used, floor housekeepers—the very persons
who did the job—were not in the communication loop. That critical link, the floor housekeeper,
couldn’t be reached at all. Today’s housekeepers communicate by telephone, but it is not a con-
versation. It is as an electronic input device to the computer. The message is input either through
the room telephone or by a terminal located in the linen closet. PCs that have been introduced
into guest rooms as an upgrade to guest service provide housekeeping with still another terminal.
Hand-held devices are still another.
With access to the computer, the housekeeper’s office tracks room attendants as they dial in
and out of the system (see Exhibit 11). Daily job assignments can also be computer designed. At
the start of the shift, employees get a hard-copy list of rooms that each is to do service. The print-
out also includes special assignments such as mirrors in the corridors, attention to sick guests, or
messages from management to the staff. Other room status reports include the following:

ADA Report: lists rooms occupied by handicapped guests. Copies go to the bell department and
the desk, but especially to security in case evacuation of the building is required.
Out-of-Order Report: includes the dates and reasons that rooms were placed out of order
(OOO) or out of inventory (OOI), expected ready dates, and the reasons behind the designations.
Permanent Guest Report: lists permanent residents by name and room number.
Room Status Report: identifies the status (occupied, vacant, ready, on-change, out-of-order) of
every room. The room status report also serves as one of the downtime reports.
Sick Guest Report: includes guests’ names and room numbers.

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 The Night Audit

Room Attendant’s Schedule 01:53 pm Nov 11

Name Number Duty H Message Signal Off

Number of Rooms Assigned Beginning Room Number

Room U-R In Out SL HK CO Room U-R In Out SL HK CO

1200 A 9:35A 9:49A SG OK SO 1209 A SD D SO
1201 A 9:50A 10:14A SS OK SO 1210 A 8:44A 9:02A SD OK SO
1202 A 11:50A 12:12P SS OK SO 1211 A 1:13P 1:48P OK I OK
1203 A 9:20A 9:35A SS OK SO 1212 A 9:03A 9:19A SG OK SO
1204 A 10:54A 11:17A SM OK SO 1213 A 1:48 OK 57 DO
1205 A 11:17A 11:50A SD OK SO 1214 A OK D DO
1206 A 10:31A 10:54A SS OK SO 1215 A OK D DO
1207 A 10:14A 10:31A SS OK SO
1208 A 12:12P 1:13P OK OK OK
END DISPLAY

exhibiT 11 Property management systems enable the linen room to communicate with and track each floor housekeeper (see
Exhibit 6). This report monitors the room attendant’s productivity, which is very high at 12 of 16 rooms completed. Stay-over rooms
take less time than check-out rooms; note room 1208. (Apparently, no lunch break?)

AccounTS receivAble rePorTS Whether by PMS or pencil-and-paper, the night audit

focuses on accounts receivable. Viewed at its simplest, the night audit is nothing more than a
cumulative inventory of accounts receivable. Throughout the day, accounts receivables are
increased through charges or decreased through payments. That count—the inventory of A/R—
is treated like any other inventory, be it linens in the closet, liquor at the bar, or canned peas in
the storeroom.
Each day’s computation starts with the opening balance. This opening balance (yesterday’s
closing balance) is the amount already owed to the hotel (peas on hand in stores). New charges
(new pea purchases) made by guests that day (account receivable debits) are added to the open-
ing balance:

Accounts Receivable Peas

in Dollars in Cans

Opening Balance (Yesterday’s Close) $186,000.00 186

Today’s Charges (Purchases) + 24,000.00 +24
Total $210,000.00 210

Subtracted from that sum are payments (credits) made by guests (cans opened and consumed)
that day.
The new closing balance (*tomorrow’s opening balance) is thus obtained for both accounts
receivable and peas, or any other item being inventoried. This closing value becomes the opening
balance of the following day when the sequence begins anew.

Accounts Receivable Peas

in Dollars in Cans
Total (See Above) $210,000.00 210
Today’s Payments (Consumption) -60,000.00 -60
A/R owed at day’s close $150,000.00*
Peas on the shelf at day’s end 150*
*Opening balance tomorrow—day three.

379
 The Night Audit

Several reports track these receivables:

Alpha List: inventories the entire guest (accounts receivable) population and the amount each
owes. (This would be comparable to a list of each can of peas on the shelf if each had a name.)
City-ledger Transfers: itemizes all the accounts transferred from the front-office ledger to the
city ledger that day; a journal of city-ledger transfers. (Identifies specific cans of peas shipped to
the kitchen from the storeroom).
Credit-Card Report: includes amounts and identities of credit-card charges made this day.
Daily Revenue Report: analyzes revenue from all sources by outlet and by means of payment.
(Sometimes called a D Report because it is comparable to the once-used NCR-machine D Report.)
Departmental Sales Journals: report the totals and individual transactions of each operat-
ing department. (Comparable to the vertical columns #5 through #15 of the transcript (see
Exhibit 12).
Guest Ledger Summary: displays the daily opening balances, charges, credits, and closing bal-
ances of guests’ A and B folios. Exhibits 3 and 12 contain the same information. One is
a property management report (Exhibit 3); the other a paper-and-pencil form (Exhibit 12).
Compare specifically Exhibit 3’s Room # column and 12–12’s column 2. Similarly, 12–3’s
Opening Bal(ance) column equates with 12–12’s columns 4 minus 5. Continuing: 12–3’s Charges,
Credits, and Closing Bal(ance) columns are the same as Exhibit 12’s columns numbered 16,
20, and 21 minus 22.
Late Charge Report: identifies the late charges transferred to the city ledger that day.
Posting Report: lists the postings made by each departmental POS terminal. (Comparable to
pencil-and-paper departmental control sheets; see Exhibit 7).
Room-Revenue Report: displays the room rates and taxes posted to each room that day.
Because room revenue can be obtained floor by floor, it is comparable to a once-used manual
room count sheet (without taxes). It, too, was called an Occupancy and Room-Revenue Report
(see Exhibit 13).

reports to the manager

The night auditor addresses and reconciles account-receivable sales. The income auditor (day
auditor) casts a wider net, auditing cash sales and credit-card sales that have not passed through
the folios. Both are combined during the income audit and presented in a Daily Report to the
Manager. That report also becomes the basis of the daily entries into the permanent books of
account.
There is obviously some delay between the time the day auditor reports to work and the
completion of the Daily Report to the Manager. In the interim, the general manager relies on the
Night Auditor’s Report to the Manager (see Exhibit 14). Although the night auditor’s report
contains less information,2 it does reflect total room sales, the hotel’s largest revenue source. That
room sales figure is accurate and complete because room sales are sold only to receivables, which
comprise the core of the now-finished night audit.
Exhibit 14, an abbreviated night auditor’s report, contains four segments.
(1) Accounts-receivable sales—not total sales—in the several departments appear in the upper
left. These values originate in the night audit. They would agree with columns 6 through 16 of
Exhibit 12 were the hand transcript still being used. (2) The receivable charges, $18,632.98,
of today, March 16th, are entered in the lower left corner of the report to obtain a cumulative
balance of accounts receivable. The earlier pea-inventory discussion reinforced this concept of
a cumulative accounts-receivable balance. The right side of the report, statistics and ratios, is
the next topic.

2
It contains less information because it deals only with accounts receivable sales. The night audit does not audit cash sales.
Neither does it audit, and therefore does not include in its report, credit-card sales made throughout the hotel.

380
 The Night Audit

DAILY TRANSCRIPT OF
10 6
ACCOUNTS RECEIVABLE DATE 20
1 2 3
OPENING DEBITS CREDITS CLOSING
ACCOUNT ROOM NUMBER
NO. NO. OF BALANCE 6 7 8 TELEPHONE 11 12 13 14 15 16 17 18 19 20 BALANCE
ROOMS RESTAURANT BEVER- 9 10 LAUNDRY VALET CASH TRANS- ROOM TOTAL CASH ALLOW- TRANS- TOTAL
GUESTS 4 5 21 22
AGES LOCAL LONG DISBURSE- FERS TAX DEBITS RECEIPTS ANCES FERS
DEBIT CREDIT CALLS DISTANCE MENTS DEBIT CREDIT

8001 1406 1 19 – 60 – 12 – 6– 8 – 3 – 70 – 70 –
8811 1817 2 63 60 30 – 5 – 4 – 60 39 60 103 20
8123 1824 1 18 50 6 40 1 – 37 26 27 37 – 37 10 73
7188 1906 2 21 93 21 56 43 21 99 43 92
7913 1907 2 39 96 30 – 6– 47 96 60 84 56 124 52

TOTAL 40 51 768 20 25 32 67650 52 10 61 70 7 20 18 40 4 – 17 – 47 96 13 53 898 39 167 50 2 10 169 60 1488 70 17 03

DEPARTURES
8106 1616 3 46 20 4 40 4 40 50 60 50 60
8007 1649 1 18 87 18 57 30 18 87
7992 1824 2 39 96 39 96 39 96
8282 1600 1 –0 – 4 – 40 3 60 8 – 8 –

TOTAL 105 03 4 40 4 – – 40 3 60 12 40 2657 30 90 56 117 43

CITY LEDGER

Cum 500 – 40 – 30 – 90 56 160 56 47 96 47 96 612 60

TOTALS 40 51 1373 23 25 32 676 50 96 50 95 70 7 60 22 – 4 – 17 – 138 52 13 531071 35 194 07 2 40 138 52 334 99 2101 30 17 03

Courtesy: American Hotel Register Co., Northbrook, IL.

exhibiT 12 The transcript is a summary of accounts receivable. The vertical column of each folio is
entered horizontally. (Exhibit 1 appears here as line #1.) Cross-footing (adding and subtracting) the
totals verifies the mathematics of each folio since the total equals the sum of its parts. The transcript
also verifies departmental incomes by comparing vertical column Totals 6 through 15 with departmental
income reports. The property management system does the same audit electronically.
N:B There are two methods for completing a transcript. Only one or the other would be used,
but both are illustrated here! Line 1 illustrates one method. Column 16, total debits (charges), includes
the values of Columns 4 and 5, the day’s opening balances. The remaining horizontal lines illustrate the
second method where Column 16 does NOT include the opening balance. Both systems produce the same
closing balances, Columns 21 and 22. (For ease in reading, several illustrations use small dollar values,
which may not seem realistic.)

room counT, houSe counT, And room income Room count (the number of rooms
sold [occupied]), house count (the number of guests [persons] registered), and room income
(dollar sales) are computed during the night audit on the PMS’s Occupancy and Rooms Revenue
Report. (When this report was done in a pencil-and-paper format, it was called a room count
sheet; see Exhibit 13.)
These three values are computed by the night audit and verified by the income audit, using
a formula exactly like the earlier cans-of-peas illustration. The first step adds today’s arrivals to
the opening balance. Iterating: Today’s opening balance is always yesterday’s closing balance. We
already know that this opening/closing relationship applies to every inventory count, be it cans of
peas, accounts receivable, room count/house count/room income, or bottles of scotch. Consider
the scotch.
When the bar closes at 2 am, there are six bottles of scotch. Twelve hours later, when the bar
reopens, the same six bottles are there. The closing balance of day one and the opening balance of
day two are always the same.
The reasoning applies to room statistics. The number of rooms occupied, the number
of persons, and the dollar income is increased by today’s arrivals and decreased by today’s
departures. The values determined by the income auditor using the computation that follows
should agree with the results of the night audit’s report. So it is a mathematical check on the
physical listing of the night audit’s Occupancy and Room-Revenue Report. The counts of rooms,
guests, and dollars shown on that report should agree to the mathematical inventory of
rooms, guests, and dollars.

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 The Night Audit

OCCUPANCY AND ROOM REVENUE REPORT

Hotel Gary DAY 0RQGD\ DATE 
EAST WING
No No No No No No
ROOM Guests RATE ROOM Guests RATE ROOM Guests RATE ROOM Guests RATE ROOM Guests RATE ROOM Guests RATE

3101 3319 3615 3910 4206 4501

3102 3320 3616 3912 4207 4502
3103 S3322   3617 3914 4208 4503
3104 3401 3618 3915 4210 4504
3105 3402   3619 3916 4212 4505
3106 3403   3620 3917 4214 4506
3107 3404 S3622 3918 4215 4507
3108 3405   3701 3919 4216 4508
3110 3406 3702 3920 4217 4510
3112 3407 3703 S3922 4218 4512
3114 3408   ² 3704 4001 4219 4514
3115 3410 3705 4002 4220 4515
3116 3412   3706 4003 S4222 4516
3117 3414    3707 4004 4301 4517
3118 3415   ² 3708 4005 4302 4518

3312 3606   3903 S4122 4418 4712

3314 3607   3904 4201 4419 4714
3315 3608   3905 4202 4420 4715
3316 3610   3906 4203 S4422 4716
3317 3612 3907 4204 4717
3318 3614 3908 4205 4718
TOTAL TOTAL   
³ TOTAL TOTAL TOTAL TOTAL

exhibiT 13 A room Occupancy report is prepared nightly by both the electronic and hand-
prepared audits. This partially illustrated report would have been copied from a room rack like that of
Exhibit 9. The totals: number of guests, number of rooms occupied, and total room revenue should
agree with Columns 2, 3, and 6 of Exhibit 12 and with the totals obtained in the discussion called,
Room Count, House Count, and Room Income. This report is also called A Night Clerk’s report (see
Exhibit 4, “Before the Income Audit”).
(For ease in reading, several illustrations use small dollar values, which may not seem realistic.)

The City Hotel, Anywhere, U.S.A. Page 1

03/16 Night Auditor’s Report

SALES ROOM STATISTICS

Rooms $12,900.00 Total Rooms 320
Coffee Shop 1,524.80 House Use –0–
Steak House CLOSED Out of Order –0–
Cap’tn Bar 896.00 Complimentary –0–
Telephone 990.76 Permanent 2
Laundry 100.51 Room Count 180
Total Sales $16,412.07 Vacant 140
House Count 210
Other Charges:
Cash Advance 987.76
Taxes Payable 540.00
Transfers 693.15
$18,632.98

ACCOUNTS RECEIVABLE ROOM RATIOS

Opening Balance $44,651.07 % Occupancy 56.3
Charges 18,632.98 % Double Occupancy 16.7

Total $63,284.05 Average Daily Rate $71.67

Credits 950.00 RevPar $40.35

Closing Balance $62,334.05

exhibiT 14 The Night Auditor’s report to the Manager is one of many reports prepared from
the night audit. Since the audit deals only with accounts receivable, some values (Coffee Shop, Steak
House, and Bar Sales) are under reported. Final figures will appear on the Daily report to the Manager
after the day audit is completed. All account receivable values (room income, closing balance,
statistics, and ratio) are complete, but small changes may result from the day audit.

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 The Night Audit

Typically, an inventory count is yesterday’s close plus additions and minus reductions.
There is an extra step with this computation. The extra step accommodates occasional changes
that involve neither arrivals (additions) nor departures (subtractions). These internal changes
must be accommodated simply because they are neither arrivals nor departures. Guests change
rooms, hence a rate change might occur. Guests move to or from larger/smaller accommodations,
hence a change in the number of rooms occupied might occur. Sometimes, additional members
of a party join later and sometimes one or more of the original members leave. Both cases impact
the three counts, which are captured on the night audit’s Change Report—see the section above
called “Rooms Management Reports.” The simple mathematics is illustrated so:

Room Count House Count Room Income

Opening Balance 840 1,062 $174,200

+ Arrivals 316 391 80,100
= Total 1,156 1,453 $254,300
- Departures 88 122 16,400
= Total 1,068 1,331 $237,900
; Changes + 6 - 2 + 1,730
- Closing Balance 1,074 1,329 $239,630

room STATiSTicS Both the night auditor’s report to the manager and the income auditor’s
report to the manager contain statistics. Statistics are merely special ways of grouping data in an
orderly and usable manner. Statistics are the facts expressed in dollars, cents, or numbers. For
example, instead of itemizing each identity:

Guest A Room 597 $150

Guest B Room 643 $130
Guest C Room 842 $160

one might say there are 220 guests in 189 rooms paying a total of $27,198. A great deal of
information has been grouped, classified, and presented to become a statistic.
Taking the next step, these room figures are expressed in ratios, which are more meaningful
than statistics. So the 189 rooms sold is expressed in relation to the number of rooms available for
sale, 270. The result is a percentage of occupancy, a mathematical expression of how many rooms
were sold in relation to how many could have been sold. Using those values, the percentage of
occupancy is:

number of rooms sold (room count) 189

= = 70%
number of rooms available for sale 270

A frequent companion to the percentage of occupancy computation is the average daily

rate (ADR). Both ratios appear in the night auditor’s report to the manager. Sales per occupied
room, as this figure is sometimes called, is the income from room sales divided by the number of
rooms sold.

room income $27,198

= = $143.90
number of rooms sold (room count) 189

A similar computation, RevPar, once called sales per available room, is derived by divid-
ing room income by the number of rooms available for sale rather than by the actual number of
rooms sold:

room income $27,198

= = $100.73
number of rooms available for sale 270

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 The Night Audit

The fourth most frequently cited ratio in the manager’s daily report is the percentage of
double occupancy. Double occupancy is the relationship of rooms occupied by more than one
guest to the total number of rooms occupied. That is what the following ratio expresses:
number of guests - number of rooms sold 220 - 189
= = 16.4%
number of rooms sold 189
Having finished the audit with the preparation of the night auditor’s report to the manager,
the night auditor lays aside pencils and erasers—or did once, now it is more likely rubbing stiff
shoulders from working at the keyboard—and goes home to bed.

The houSekeePer’S rePorT Earlier, the chapter highlighted the importance of communica-
tion between the linen room, the desk, and the floor housekeeper. How well this is done is high-
lighted by another report. This one comes from the linen room to the desk at day’s end. In many
properties, housekeeping forwards the report to the desk twice daily. Although the illustration that
follows is presented in written form, the report is now filed electronically to be viewed on a monitor.
Room status is communicated by means of abbreviations that are widely understood across
the industry (see Exhibit 15). Occupied rooms are reported with checkmarks (U), meaning
OK. Sleep-outs, which are rooms with baggage but no overnight guests, are flagged with a B, for
baggage. Occupied rooms with no baggage or just light baggage get an X mark (for nothing).
Other codes mix handwritten and alphanumeric symbols.
The housekeeper’s report is a composite report. It is a summary of reports coming from
the floor housekeepers. Each sleeping floor is serviced by one or more floor housekeepers,
who report room status to the linen room. The linen-room staff merges the floor
reports (see Exhibit 16) to complete the final report.
Discrepancies between the housekeeper’s report and the desk are usually resolved by
emailing and telephoning between the two locations. When differences still remain, someone
is dispatched to look at the room. A bellperson, or a security officer, might be sent. Or a more
senior management type: The housekeeper, the assistant manager, or the chief of security might
“take a look.” Credit managers are especially interested in light luggage reports and skippers.
Several recent lawsuits have highlighted the need to investigate Do Not Disturb signs.
Guests who leave DND signs on the door must be checked before the day is out. An alert is war-
ranted if the floor housekeeper notes a DND on both the morning and afternoon reports. It is

Baggage: no occupant (sleep-out) B

Check out: room on change c/o
Cot C
Do not disturb DND
Double-locked room DL
Early arrival EA
No service wanted (Do not disturb) NS
Occupied U
Occupied, but dirty OD
Occupied, with light baggage or no baggage X
OK ok
Out of order O (also OOO)
Out of inventory OOI
Permanent guest P
Ready for sale /
Refused service RS
Stay-over s/o
Stay-over, no service SNS
Vacant V (also no symbol at all)
Vacant and dirty (on change) VD

exhibiT 15 To speed communication, a series of widely accepted alphanumeric symbols have

taken hold throughout the hotel industry. They’re used especially in housekeeping reports. They still
hold sway despite the spread of electronic communication. (See also Exhibit 16.)

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 The Night Audit

Floor Report

Floor #

01 28

02 29

03 30

04 31

05 32

06 33

07 34
exhibiT 16 It’s critical that
08 35 floor housekeepers keep the
linen room and the front desk
09 36 apprised of room status. That’s
done electronically throughout
10 37
the day. At day’s end, each
housekeeper reports a floor
summary such as this one to
the linen room. Consolidated,
27 54 these individual floor reports
are combined into a daily
Code: Housekeeper’s report to the
V = Vacant RS = Refuse Service Desk. Electronic capability
B = Baggage DND = Do Not Disturb
X = No Baggage C = Cot
enables the report to be filed
= Occupied EA = Early Arrival twice a day. In some hotels, the
desk files its own report back to
the housekeeper.

one fact if the guest forgot to remove the notice and something different if the guest is in distress,
unable to remove the sign. Wise hoteliers telephone the room to verify the condition of the occu-
pant. If no one answers, the room is entered, always by more than one person. Recording the
circumstances in the front-desk log is an extra, prudent step.
The second report of the day is the chief means of uncovering sleepers, skippers, and whos.
Sleepers are guests who have actually checked out but are still listed as occupants. Skippers are
guests who have left without paying. Whos are unknown guests; someone is occupying a room
but the desk doesn’t know who it is.
Originally, the housekeeper’s report was sent to the income auditor. Internal control is an
issue when one person, the guest-service agent, sells the rooms, handles the payments, and keeps
the records. Having another party check the status of the house versus the records of the desk
established a degree of internal control. This is still important for small hotels. As front-office
staffs grew larger, the housekeeper’s report was no longer needed for internal control.
Property management systems have also altered the floor housekeepers approach to report-
ing occupied rooms. No longer do they bang on guest-room doors early in the morning. PMSs
now prepare a reverse housekeeper’s report, also called a room occupancy status report. It is one of
the many night-audit reports listed previously. The linen room gets the report early the following
morning. Now, the housekeeper knows the room count and the configuration of the floors before
the day’s work begins. Work schedules are refined before the crew arrives. Extra housekeepers are
called in, or days off are scheduled for full-time staff. Assigning jobs earlier means the arriving
staff gets right to work.

Summary
This chapter accomplished two tasks, two linkages. It looked hotel’s day ending the sequence from reservations to arrival,
rearward by auditing the accounting records (folios) and their from residency to departure, and from payment to audit.
dispositions—cash or credit. In so doing, this chapter closes the PMS that was first conceived as equipment for the front office

385
 The Night Audit

has grown to be an amazing tool for all of hotel management. systems were added. These electronic upgrades reduced the
That introduces the technological changes. human errors substantially, almost to none. So at one and the
All businesses reconcile their accounts receivable, but same time, the tedious work of the night audit, such as post-
only hotels do it nightly. They close the business day by means ing room rates and taxes or transcribing transcript sheets, was
of the night audit. Guest folios (accounts receivable) are bal- reduced and the number of errors minimized.
anced and reconciled to accommodate the comings and goings The chapter retains these outdated procedures as a means
of hotel guests at all hours. Their folios must be current and of explaining what takes place within the heart of the computer-
accurate on demand. That is the primary job of the night audit. ized audit. PMS and hand-posted records have the same goals.
Since most hotel sales are recorded on folios—guests charge With tedious hand-prepared audits, balancing the folio was the
purchases to their rooms—reconciling the folios enables the main thrust. With PMSs, the emphasis changes, but the almost
night auditor to report the bulk of the day’s income. That is the automatic repair of folio errors is not visible. Readers can see a
second aim of the night audit. With so much data gathered, the pencil-and-paper folio, voucher, and transcript that make the
third purpose evolves almost automatically: Present the infor- records. They can see only the output, the results, of a PMS audit,
mation in reports that help management do its job. a printout. Readers who follow the pencil-and-paper explanations
Uncovering clerical mistakes made by the desk through- of the chapter will better understand the modern PMS audit.
out the day, getting accurate folios, was the original focus of The PMS has jumped ahead. No longer is it a tool of
the night audit. Its paper-and-pencil procedure (the transcript) the audit only. Rather than a piece of equipment for the front
dates to the 1920s. A new system appeared in the 1980s, the desk, the hotel’s computer is now the heart of its operation, as
property management system. As it matured, new capabilities Exhibit 6 illustrates. New capabilities have appeared, and many
such as point of sale (POS) terminals and call accounting (CA) more are yet to come.

Resources and Challenges

RESOURCES suppliers by searching the Web under property management sys-
tems and note whether the items selected are innovations or old
Web Assignment standbys.
List three accessories (supporting programs) that you might add to
your property management system. Identify the programs and the

Interesting Tidbits
• There are numerous job openings for night auditors. Poor information. Control and secure cash and cash equivalents.
working hours that are not offset by high enough wages impair Organize and maintain files and records. Audit and reconcile
the search. Websites and newspaper advertisement advertise all revenue postings. Act as receptionist and night manager
salaries of between $10 and $20 per hour with $12–$15 a typical with particular attention to courtesy, security and safety of
offer. A composite advertisement might read: guests and of hotel property.”
“Audit and reconcile all revenue flows by checking • Installing a PMS was a great uncertainty when the MGM Grand
figures, postings and documents. Prepare, maintain and dis- Hotel (now Bally’s) opened in Las Vegas in 1973. So uncertain
tribute statistical, financial and accounting reports. Check was management of the PMS’s capability (ten years before their
figures, postings and documents for accuracy. Maintain general availability) that a dozen NCR 4200 machines were
confidentiality of proprietary information. Protect privacy purchased as backup. They were never used. Electronic locking
and assets of the company its guests and staff members. systems were untested and, therefore, also rejected by the hotel.
Record, store, access and/or analyze computerized financial Soon after the opening, both systems were in place.

Challenges
True/False ____ 3. The closing balance of one day’s inventory is the opening bal-
ance of the following day with only a few, rare exceptions.
Questions that are partially false should be marked false (F). ____ 4. A hotel’s closeout hour depends upon its location; different
____ 1. An acute shortage of night auditors has come about since the municipalities mandate different closing times.
industry’s trade association, the AH&LA, has required audi- ____ 5. Across the lodging industry, the transcript has replaced the
tors to have the equivalent (but not the actual qualifications) room count sheet as the major format for completing the
of a CPA. night audit.
____ 2. The night audit reconciles the cash sales made by each depart-
ment with the actual cash turned in by departmental cashiers.

386
 The Night Audit

Problems
1. Explain how the three backup reports discussed in the section c. Which guests, if any, checked out today?
“Downtime Reports” would be used in the event of a computer d. Which guests, if any, used credit cards at departure?
malfunction. e. Which guests, if any, had amounts due from the hotel?
2. A guest checks in at 4:30 am on Tuesday, January 8. Under hotel 5. The discussion on Reservation Reports cites a central reserva-
policy, the guest is to be charged for the room-night of Monday, tion report that includes fees. Explain who pays what fees and to
January 7. The closeout hour of Monday, January 7, was 12:30 am, whom. About how much might those fees be?
January 8, and the room charge postings were handled automati- 6. Is this transcript in balance? If not, what error or errors might
cally by the PMS at approximately 3 am on that morning. The account for the discrepancy? What percentage of sales tax is being
room rate is $72 and the tax is 5%; no other charges were incurred. charged in this community?
Sketch a computer-prepared folio as it would appear when the
guest departs on Wednesday, January 9, at 10 am. Identify each Allowances $ 100.00
posting by day and hour and briefly explain who made which Telephone 670.70
posting. Transfers to 395.05
3. Given Rooms 9,072.00
Rooms occupied 440 Cash advance 444.25
Rooms vacant 160 Debit transfer 395.50
Total rooms sales $32,330 Beverage 1,920.00
House count 500 Credit-card charges 14,482.07
Required Cash 10,071.22
The percentage of occupancy ______ Closing balance 3,670.41
The percentage of double occupancy ______ Opening balance 48,341.50
ADR ______ Rooms tax 725.76
RevPar ______ Food 3,000.10
Closing balance 43,007.33
4. Use Exhibits 3 and 12, and identify your answers by room Opening balance 185.00
numbers. Total charges $64,384.81
a. Which guests, if any, arrived today?
b. Which guests, if any, had advanced deposits?

An IncIdent In Hotel MAnAgeMent

When a Body Meets a Body

What a day! A traveling couple has stopped overnight at this airport hotel to break up 27 hours
of travel from almost around the world. It is already late, almost 11:00 pm, when they finally
get to their room.
What’s that noise? A party in the room across the hall. After giving the partygoers an
additional hour to finish up, the distraught guest calls the desk. No answer after some 10 rings.
Every 10 minutes the caller rings the desk because the party has grown louder and louder. No
answer. No answer. No answer.
Two hours after arriving, the man pulls on his trousers and goes down to the lobby. The
lobby is pitch dark except for emergency lighting. “Wow, something has happened. Oh Gosh!
There’s a body on the sofa!”
The guest is startled even more than the guest-service agent/night auditor, who jumps
up from the sofa and his deep sleep.
Questions
1. Was there a management failure here; if so, what?
2. What is the hotel’s immediate response (or action) to the incident?
3. What further, long-run action should management take, if any?

387
 The Night Audit

Answers to True/False Quiz

1. False. There are no specific or required qualifications for night 4. False. Municipalities may control the bar’s hours of operation, but
auditors. the hotel’s closing day is determined by management based on the
2. False. The night audit reconciles transaction that involve accounts closing hours and the amount of activity in the various food and
receivable, not cash. beverage departments.
3. False. There are no exceptions. Inventories counted as one day 5. False. Both the transcript and the room count sheet are vestiges of
closes (say, bottles of rye at the bar) are the same count when the an earlier era and are no longer in use. The property management
next day begins (say, bottles of rye at the bar). system is the modern vehicle for the night audit.

388