A night audit is conducted when a hotel reconciles its daily financial transactions during the late hours of the night or early morning. The person responsible for the night audit verifies guest accounts, prepares reports for management, and ensures the hotel's financial integrity. 

Let’s explore what a night audit entails, why it’s important, the different types of night audits, and the most critical steps in the process.

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What is a night audit in a hotel?

A night audit is a critical process used in hotels to ensure financial accuracy, operational efficiency, regulatory compliance, and guest satisfaction. By meticulously reviewing the hotel's daily operations and transactions during off-peak hours, hotels can maintain financial integrity, mitigate risks, and optimize performance.

Why is the night audit process important in the hotel industry? 

The night audit process serves several important purposes: 

Financial Accuracy

Ensuring financial accuracy and integrity in a hotel's records is a primary objective of the night audit. It involves reconciling revenue sources, such as room charges, food and beverage sales, and other incidentals. This prevents discrepancies that could impact the hotel's reputation and profitability. 

Review of Guest Accounts

The night auditor reviews guest accounts to double-check billing accuracy. This allows prompt adjustment of any irregularities in room charges or rates, maintaining guest satisfaction and loyalty. 

Operational Efficiency

Amid the daily hustle and bustle of hotel operations, tasks can sometimes be overlooked. The night auditor plays a crucial role in streamlining operational processes by updating inventory, generating reports, and ensuring that maintenance requests are processed, thereby promoting overall efficiency.

what is a night audit in a hotel

Risk management and regulatory compliance

Hotels must comply with various regulatory requirements, including tax regulations and accounting standards. The night audit plays a critical role in ensuring compliance by regularly reviewing financial transactions and guest accounts. This process helps identify potential risks such as fraudulent payments, suspicious reservations, or internal theft.

Different types of night audits 

There are two main types of night audits: manual audits and automated audits. 

Manual Night Audit

Before the advent of automation technology, night audits were conducted manually. Staff reconciled transactions, verified guest accounts, updated inventory, and prepared reports using basic accounting software. Manual audits were prone to errors and discrepancies. 

Automated Night Audit

With advancements in technology like Mews, hotels can now automate night audits during late-night hours. Automated audits pull reports, reconcile financial transactions, update guest accounts, and generate necessary reports. Integrating a night audit within a PMS enables data synchronization and real-time reporting, minimizing the risk of human error. Hotels benefit from improved operational efficiency by automating routine tasks.

What are the most important steps of the night audit process?

Key steps in the night audit process include: 

  • Closing out daily transactions 
  • Verifying guest accounts
  • Updating room inventories 
  • Processing payments and issuing necessary refunds 
  • Reconciling cash and other payment methods 
  • Generating reports 
  • Closing out the day and preparing for the next day 

Night auditors are responsible for documenting and reviewing all night audit procedures, maintaining accurate records, and ensuring financial accuracy, efficiency, and compliance with industry standards and regulations.

How Mews works without a night audit

Every night at midnight, the Mews system automatically transitions to the next day, mirroring how days progress. This process is seamless, requiring no manual intervention with a 'perform night audit' button. Everything operates automatically in the cloud – all necessary information is processed instantly. If adjustments are needed, such as checking in a guest after midnight, you can still make those changes effortlessly.

So how does it actually work?

On the financial side of operations, charges are posted at the time a reservation or service is created and processed instantly without requiring a dedicated night audit. This saves time and reduces the chance of errors. Immediate posting allows for real-time reporting not only for past dates but also for future periods, enabling you to easily check expected revenue for upcoming months.

Not everyone checks in before midnight though. Mews has a solution called the editable history window. You can define the time period for this window, during which you can modify any reservation within the reservation management software, typically allowing changes up to seven days into the past. This capability acts like time travel, empowering you to correct mistakes and maintain accurate records. 

For example, if a guest was scheduled to check in on August 1st but arrives after midnight, Mews automatically shifts to the next day (without requiring a night audit). However, at 1 am when the guest arrives to check in, you simply click 'check-in' on the reservation, adjusting the arrival date to August 1st. This ensures your data remains accurate and is instantly updated for reporting purposes. 

Speaking of reporting, how frequently do you review daily night audit reports? Our reports can be filtered by date and time, allowing you to customize their frequency based on your workflow. Additionally, you can schedule reports to be sent hourly, daily, or weekly to any email address, eliminating the need for printing and facilitating easy sharing with your team.

how-mews works without a night audit

How Koncept Hotels benefited from no night audit

Koncept Hotels is a forward-thinking hotel chain with stylish properties across three countries. Before transitioning to Mews, the night audit process caused them plenty of headaches. Guests who didn’t arrive by 10 pm were manually checked in regardless of their actual arrival, leading to inaccurate housekeeping figures due to uncertainty about cleaned rooms. Additionally, in some of their staffless hotels, team members had to run night audits from their own homes.  

"Now we don't do the night audit, we have an absolutely 100% correct housekeeping figure at the end of the month. We know how many people checked in, we know how many people are no-shows."
Daniel Hrkać, Head of Operations, Koncept Hotels

With Mews, no-shows are automatically reported via email, providing staff with full transparency over guests and rooms. Automation was vital for Koncept Hotels, particularly in their staff-less properties, where no physical presence is required for night audit tasks or financial checks. Mews proved to be the perfect solution for their needs. 

Embrace a new way of thinking

Just because the night audit as we know it has been around for a long time, it doesn’t mean that’s the right way or the best way of doing things. In fact, it categorically isn’t. We understand that change can be a little daunting, but it’s the only way that we’ll continue to move our industry forward.  

Having no night audit was an eye opener. After I realized how Mews works, I asked myself: ‘Why does any property have a night audit?’ No one needs a night audit. It's nonsense really!" 

Daniel Hrkać, Head of Operations at Koncept Hotels