THE FRONT OFFICE
AUDIT
Chapter 11
SCOPE
TODAY WE WILL LOOK AT
• Functions of the office audit
• The front office audit
• System update
• Centralized front office audits
MANAGEMENT FUNCTIONS
Cooordinati
Planning Organizing Staffing Leading Controlling Evaluating
ng
FRONT OFFICE AUDIT
FUNCTIONS
Verify posted entries to
Balance front office Resolve room status and
guest and non guest
accounts rate discrepancies
accounts
Review guest credit
Generate optional and
transactions against
managerial reports
established limits
THE FRONT OFFICE AUDIT
Summarizes daily
Tracks operating statistics transaction
• Room revenues • Cash
• Occupancy percentages • Credit card
• Other statistics • Debit card
• Other transactions
ESTABLISHING END OF DAY
• Auditors compilations • Transactions incurred next
working day
• Stopping point for the business
day • Manual transaction/ Paper work
• Night shift • Electronic postings
The end of the day the hotels stopping point for the business day
•Each hotel must decide what time will be considered the end of its accounting day
•For example if the front office audit begins at 1:30 am the hotels business
day wull begin at 1:30 am . The period from 1:30 and until the audit is finished is known
as audit work time
CROSS-REFERENCING
• Cross-referencing refers to the activities associated with comparing data found
from different sources to ensure correctness of the audit. Some examples of
cross-referencing are as follows: Compare online posting and / or vouchers against
guest, master, non-guest and employee folios.
• Why is it important to cross reference?
• To ensure the accuracy, completeness, and integrity of front office accounting
procedures. This is also known as accounts integrity
ACCOUNT
INTEGRITY
GUEST CREDIT MONITORING
• Software responsible for monitoring credit
• Establishing credit limits depends upon payment card floor limits, hotel's house limit
&guest's reputation
• Front office auditor should identify accounts have reached or exceeded credit limits; called
"high-balance accounts”
• Report listing high balance accounts should be prepared for appropriate action by
management
AUDIT POSTING FORMULA
This is the formula used to balance the night audit
Net outstanding
Previous balance Debits Credits
Balance
DAILY AND SUPPLEMENTAL
TRANSCRIPT
• Daily transcript is detailed report of guest accounts that had transactional activity on that
particular day
• Supplemental transcript may track day’s transactional activity for non-guest accounts
• Together, daily transcript and supplemental transcript detail all transactions occurring on
single hotel day
DAILY AND SUPPLEMENTAL
TRANSCRIPTS
• Data appearing on system-produced daily transcript is typically detailed by revenue center,
transaction type & transaction total
• Basis for consolidated report accounting transactions from which revenue center totals can
be checked
• Daily & supplemental transcripts are spreadsheets to eliminate posting discrepancies
• Daily & supplemental transcripts can facilitate front office audit routine by identifying out-
of-balance figures in advance of detailed review
FRONT OFFICE AUDIT PROCESS
Balance
Complete Reconcile room departments of
Verify room rates
outstanding postngs status discrepancies accounts
Prepare cash
receipts for Post room rates and Verify no show
Prepare reports
deposit taxes reservations
Perform system
Distribute reports
back up routine
System updates are
performed daily to
System update in front enable system file
office accounting system reorganization, system
accomplishes many of maintenance, & report
functions in audit routine production, as well as to
provide end-of-day
closure
SYSTEM
UPDATE
Since front office Front office system may
systems audit be connected to revenue
transactional postings as centers for automatic
they occur, there may be postings, enabling the
little or no need for front system to monitor
office auditor to perform charges made at revenue
account postings outlets throughout hotel
SYSTEM UPDATE
Room status
Auditor should routinely discrepancies are rare in
review system interface automated front office
procedures to ensure environment; system can
proper handling of be programmed to
automatically posted automatically flag
transactions from outlets discrepancies when they
occur so that they can be
quickly dealt with
In some front office
systems, the balancing of Front office can be
front office and programmed to produce
department accounts is a variety of reports for
continuously monitored management
in real time
