What is a hotel night audit?

A hotel night audit is the process of summarising and ensuring the accuracy of all the financial activities that have occurred at your property on a particular day.

Performing a night audit helps you prepare for the next day’s check-ins, check-outs, and any payment collections or outstanding balances. At the end of the audit your property should have a Net Outstanding Balance (NOB) which is the Previous Balance + Debits – Credits.

Typically the night audit takes place after the check-in window for guests has passed. For example, if guests can check-in between 2-6pm, you would perform the night audit after 6pm. Alternatively, you could take care of it early in the morning before a new business day begins.

In this blog we’ll explain everything you need to know about night audits, including how they work and how they apply to a small hotel, B&B, or other small accommodation businesses.

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Why are hotel night audits important?

To keep your property operational, a night audit is an essential process.

Keeping the books ‘clean’ is a vital part of any business, but especially for small businesses that may not have the profit margins to deal with the lost revenue that discrepancies may cause.

How does the night audit work for a small property?

At larger hotels which run 24/7, normally there will be a full-time night auditor alongside other staff such as front desk staff or room service attendants that work the night shift.

At your property, you may be running it all by yourself or only have one or two people to help out. 

While this may simplify certain parts of the audit, it also means you’ll have more individual tasks to get done because you have to fit the audit in amongst all your other duties. For example, part of your audit process might include scheduling housekeeping for the next day, processing new reservations, noting maintenance issues, or replacing lost, broken, or exhausted items.

You won’t have the luxury of passing on your work to someone else the next day, so you can’t afford to spend all night reconciling your finances.

In the very likely case that you cannot afford to have a full-time night manager; property management systems are a blessing, since they help you streamline your processes, accounting, and reporting. 

hotel night audit
How to perform a hotel night audit | Learn how hotel procedures can be done more efficiently

Why do you need a night audit?

The night audit is an essential task if you want to keep your property running smoothly and profitably.

It ensures that there is alignment between:

  • Revenues
  • Transactions and payments
  • Reservations
  • Invoices

Any discrepancies need to be addressed as part of the audit and resolved before the next audit takes place.

The night audit also helps with keeping accurate statistical data that you can use to generate and analyse reports on things like occupancy, guest expenditure, and revenue metrics such as revenue per available room (RevPAR).

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What are the steps of the night audit?

Because you aren’t running a large hotel and may not have a number of separate departments for room service or amenities such as spas, pools, gyms, or massage services you can take a simpler approach to your audit than many large properties.

Consider the following steps:

  • View revenue closings for the day and check your current balance
  • View transactions for all guests for the day
  • View all current, upcoming, or pending reservations – you can also check transactions by reservations
  • View invoices and the reservations attached to them
  • Check for any discrepancies such as missing transactions, duplicate transactions, or unpaid invoices to ensure you can accurately account for your revenue balance
  • Resolves any issues such as fixing data errors, sending invoices, or processing refunds so you can balance your account
  • Produce reports so you can track performance throughout the weeks, months, or years and refer back if you ever need to reconcile anything

A successful night audit will result in balanced guest and non-guest accounts and will maintain an accurate record of all your work. 

We hope this blog helped you understand the importance of night audits and how they work. If you want more resources like this, check back in at the Little Hotelier blog.

Interested in knowing more about how software can help? Check out Little Hotelier.

By Dean Elphick

Dean is the Senior Content Marketing Specialist of Little Hotelier, the all-in-one software solution purpose-built to make the lives of small accommodation providers easier. Dean has made writing and creating content his passion for the entirety of his professional life, which includes more than six years at Little Hotelier. Through content, Dean aims to provide education, inspiration, assistance, and, ultimately, value for small accommodation businesses looking to improve the way they run their operations (and live their life).