What is Night Audit?
Night Audit = End-of-Day Closing Process
The process of closing the hotel's business day, posting room charges, reconciling accounts, and generating daily reports. Typically done between 11 PM and 6 AM.
Why Night Audit is Critical
- Financial accuracy: Ensures all charges are posted correctly
- Revenue tracking: Captures daily revenue for reporting
- Account reconciliation: Balances all guest accounts
- Operational handover: Prepares reports for morning management
- Error detection: Identifies discrepancies before they compound
- Compliance: Creates audit trail for tax and regulatory purposes
Night Audit Process - Step by Step
1 Complete All Pending Transactions
- Post any late check-ins
- Process pending check-outs
- Post all restaurant/bar charges
- Post minibar, laundry, telephone charges
- Apply any adjustments or corrections
2 Verify Room Status
- Match PMS room status with housekeeping report
- Identify any discrepancies (skipper, sleeper)
- Confirm occupied, vacant, OOO (Out of Order) rooms
- Update any incorrect statuses
3 Post Room & Tax Charges
- Run automatic room charge posting in PMS
- Verify room rates are correct for each reservation
- Ensure GST is calculated correctly (12% or 18%)
- Check package inclusions are applied
4 Reconcile Cash & Cards
- Count cash drawer and match with system
- Reconcile credit card settlements with PMS
- Verify UPI/digital payments
- Account for paid-outs and advances
5 Balance Guest Ledger
- Review high balance accounts
- Check for credit limit violations
- Verify city ledger transfers
- Ensure all accounts balance to zero or expected amounts
6 Run Night Audit in PMS
- Execute the night audit/day close function
- System rolls date forward
- Generates daily reports automatically
- Archives the day's transactions
7 Generate & Review Reports
- Daily revenue report
- Occupancy report
- Arrivals/Departures for next day
- High balance report
- Manager's flash report
Key Reports Generated
| Report | Purpose | Who Uses It |
|---|---|---|
| Daily Revenue Report | Shows total revenue by department | GM, Revenue Manager |
| Occupancy Report | Rooms sold, occupancy %, ADR, RevPAR | Revenue Manager, Sales |
| Trial Balance | Accounts receivable status | Accounts, Finance |
| Arrival List | Expected check-ins for next day | Front Office, Housekeeping |
| Departure List | Expected check-outs for next day | Front Office, Accounts |
| No-Show Report | Reservations that didn't arrive | Reservations, Revenue |
| Cashier Report | Cash/card breakdown by shift | Accounts, Night Auditor |
| Guest Ledger | All in-house guest balances | Front Office, Accounts |
Common Night Audit Issues
1. Room Rate Discrepancies
Problem: Room rate doesn't match what was quoted/booked
Solution: Always verify rate before posting. Check reservation source and rate code.
2. Missing Charges
Problem: F&B or other charges not posted to room
Solution: Coordinate with outlets before night audit. Use interface for POS integration.
3. Cash Shortage
Problem: Physical cash doesn't match system
Solution: Recount, check for unposted transactions, review paid-outs. Document variance.
4. High Balance Accounts
Problem: Guest balance exceeds credit limit
Solution: Request interim payment or verify valid credit card authorization.
Critical Rule: Never force close a night audit with unresolved discrepancies. Document issues and escalate to management - don't sweep problems under the rug.
Night Audit Checklist
Pre-Audit Tasks
- All outlets closed and charges posted
- All check-ins completed
- Late check-outs processed
- Room status matches housekeeping
- All reservations confirmed for today are accounted for
During Audit
- Room and tax posted correctly
- Cash drawer balanced
- Credit card batch closed
- Guest ledger balanced
- City ledger entries verified
- No-shows processed and charged
Post-Audit Tasks
- All reports generated and printed/saved
- Reports distributed to relevant departments
- Any issues documented in log book
- Backup taken (if manual system)
- Handover notes prepared for morning shift
Night Audit in Modern PMS
Most cloud-based PMS systems have simplified night audit:
| Traditional Night Audit | Modern Cloud PMS |
|---|---|
| Manual room charge posting | Automatic posting at set time |
| Print multiple reports | Digital reports, auto-emailed |
| System unavailable during audit | Can run in background |
| Takes 1-2 hours | Takes 15-30 minutes |
| Must be done at specific time | Flexible timing window |
PMS Tip: Configure your PMS to auto-email key reports (occupancy, revenue, arrivals) to management at 7 AM. They'll have the data ready when they start their day.
Night Auditor Responsibilities
- Complete all night audit procedures
- Handle late night check-ins and check-outs
- Respond to guest requests and emergencies
- Security rounds and safety checks
- Prepare for morning shift handover
- Monitor property during quiet hours
- Document any incidents in log book