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Front Office Accounting-16
Front Office Accounting-16
Since Hotels operate twenty-four hours a day, seven days a week, the front office must
regularly review and verify the accuracy and completeness of guest and casual guest
accounting records. A front office audit process is intended to fulfill this need. The audit is
a daily review of guest account transactions recorded at the front desk against the revenue
center transactions. This routine helps guarantee the accuracy, reliability, and
thoroughness of front office accounting. A successful audit will result in balanced in house
and out side guest accounts, accurate account statements, appropriate account credit
monitoring, and timely reports to management An effective audit also increases the correct
account settlement.
The front office audit is usually called the Night Audit because hotels generally perform it
during the late evening hours. The most convenient time to perform the audit was during
the late evening and early morning hours when front office auditors could work with
minimal interruption.
The main purpose of the night audit is to verify the accuracy and completeness of guest
and casual guest accounts against revenue center transaction reports. Specifically, the
night audit is concerned with the following functions:
Day Sheet
Day sheet is a summary of all the guest folios (guest bills) accounts for that particular day.
The day sheet (Fig 17.1) should be prepared daily soon after updating all the guest folio
accounts and after the transferring of all the guest folio transactions individually to the day
sheet. Day sheet consist with number of columns and rows, and left side corner column is
allocated for headings, which are all as same as in the guest folio and each column
represent a guest folio accounts on the same date. Right side corner column allocated to
enter all totals under each an every heading e.g. Room, Food and beverages revenues ect.,
According to the number of folios used for the day, day sheets may require one or more.
After preparing the day sheet (Fig 17.2) horizontally and vertically totals should be added
in order to check the accuracy and, if there are any discrepancies, individual column totals
should be checked. All departmental totals should be compared with departmental
summaries (only credit sales concerned).
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Refer:
Departmental summaries
Refer:
Bar Summary(Fig-17.3)
By using the Kalamazoo system of billing. There is a possibility of updating the day sheet
at the same time posting the charges to the guest folios. This is done by arranging all guest
folios in order on the day sheet, which makes it easy to copy each an every entry to the day
sheet as they are entered in the guest folios. This saves timer and also avoids
transcription errors.
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Balancing the day sheet
The day sheet is balanced each day, usually at the close of business. In order to check that
charges have not been omitted or have not been entered in wrong guest’s account, these
totals are checked against the totals of the individual guests’ bills. Each dissection
(examine parts) of the debits and the credits is totaled and entered in the appropriate
column. The totals of the debits are added, as are the totals of the credits. As a final check
the total of the debits and credits of the individual guest accounts’ columns should be
added and should tally with the grand totals.
The purpose of the checking and crosschecking is to prove the arithmetical accuracy of the
additions on the day sheet. However, there are several types of errors, which this balancing
does not reveal. Such errors may be grouped under three main headings.
1. Error of omission
2. Error of commission
3. Compensating errors
1. Error of omission: An error of omission will occur when a voucher has gone astray or
is not posted for any reason. This will be revealed when the balances in the day sheet are
check against the balances on the bills at the end of the day.
The Daily Revenue Report (fig.17.7) is most often prepared by the Night Auditor or the
cashier. However, in small hotels this may be prepared by the night Receptionist. The
purpose of this report is to have a daily record of the income generated to the hotel from
various activities. Management decisions are taken based on the revenue reports prepared
monthly for which information is extracted from the daily revenue report.
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XYZ HOTEL (PVT) LTD
DAILY REVENUE REPORT
DAY- DATE-
SERVICE CHARGE
VAT %
TOTAL
TOTAL REVENEUE
COMPLIMENTRY ROOM
NAME OF PERSON ROOM NO: REMARKS
……………………………….. …………………………………..
…………………………………
Prepared By Checked By Approved By
Fig.17.7