What a night audit actually does
Hotels sell nights, not days, and a hotel’s night does not end at midnight. A guest who walks in at 1:30 am is sleeping through the previous night; a restaurant bill printed at 00:30 belongs to the evening that ran it. The night audit is the moment the hotel draws that line on purpose, instead of letting the calendar draw it.
It has four jobs:
- Charge the night. Every room occupied tonight gets one room charge at its agreed rate, with GST at the right rate for that room.
- Settle the arrivals. Anyone expected today who has not arrived is either still coming or a no-show, and the room is released or held on purpose — not by default.
- Match the money. Cash, UPI, card and bank transfers recorded today are compared with what is actually in the drawer and the bank.
- Close the date. The business date moves forward, and today’s figures are frozen in a day-end report that nobody edits afterwards.
Many small hotels skip it and add everything up at check-out. That works until a guest stays eleven nights across a rate change, eats in the restaurant twice on credit and leaves at 6 am — and the bill is rebuilt from memory by whoever happens to be on the desk.
The business date, and why midnight is the wrong line
The business date is the day the hotel says it is, for its accounts. It stays on Tuesday until Tuesday’s night audit is run — even at 2 am on Wednesday — and only then becomes Wednesday. That one rule settles most arguments about which day something belongs to:
- A walk-in who checks in at 1:30 am on Wednesday is recorded on Tuesday’s business date: the night he is sleeping through is Tuesday night.
- The 00:30 restaurant bill counts in Tuesday’s revenue and Tuesday’s cash.
- The drawer counted at 2 am is Tuesday’s drawer, and any difference is Tuesday’s difference.
If the hotel follows the calendar instead, late bills fall into the next day’s figures, the night receptionist’s cash is split across two days, and neither day’s report matches what actually happened at the desk.
When to run it, and who does it
Pick a fixed time after your last expected arrival and before your first departure, and keep to it. If your late guests come off an overnight bus, that may be 1 or 2 am. The exact hour matters less than doing it at the same point every night, so each day’s report covers the same span of time.
In a property with a night receptionist, it is that person’s job. Where the owner locks up, it is the owner’s. Whoever does it, somebody else should read the day-end report the next morning — the person who counted the cash should not be the only person who ever looks at the count.
The night audit checklist, step by step
- Finish the front desk. Check in everybody who has arrived. Nobody should be asleep in a room the register thinks is empty.
- Deal with arrivals who have not come. Ring the number on the booking if there is one. If they are not coming, mark them no-show and release the room. If your booking terms charge a guaranteed no-show for one night, post that charge now, with a note.
- Deal with guests past their check-out date. Either extend the stay or check them out. A guest still in the room after the departure date, with no stay recorded for tonight, is a night nobody will charge for.
- Post tonight’s room charges. One charge per occupied room, at the rate agreed for that stay, with GST: 5% where the room’s price is ₹7,500 a night or less and 18% above that (our GST guide explains the rule). A complimentary room goes on at ₹0 with the reason written down, so it is visible rather than missing.
- Post everything else that belongs to a room. Restaurant orders signed to the room, laundry, the minibar, an extra bed. An order left open in the restaurant is revenue that is on nobody’s bill.
- Match the money, method by method. Count the cash drawer against the cash recorded. Check UPI received — in the bank app or on the payment soundbox — against UPI recorded. Match card slips against card entries. Money an online travel agent collected for a prepaid booking is not in your drawer: keep it on its own line.
- Read the open bills. Look at every guest leaving tomorrow and every large unpaid balance. A negative balance means you owe the guest money — that is a refund to arrange, not a settled bill.
- Check the foreign guests. In India a foreign national’s stay — an OCI cardholder’s included — has to be reported online on Form III, still widely called Form C, within 24 hours of arrival, and the departure within 24 hours of leaving. The audit is a good moment to confirm that today’s arrivals and departures were reported — see our Form C guide.
- Save the day-end report. Occupancy, average rate, arrivals and departures, no-shows, revenue by department, money in by method, and what is still owed.
- Close the business date. From here on, anything new belongs to tomorrow.
The numbers a day-end report should show
You do not need forty reports. You need the same short set every day, in the same place, so that a bad night stands out against the nights around it.
| Figure | What it tells you | How it is worked out |
|---|---|---|
| Rooms available | What you could sell tonight | Total rooms minus rooms out of order |
| Rooms sold | Rooms charged for tonight | Count of occupied, charged rooms (complimentary rooms kept separate) |
| Occupancy | How full you were | Rooms sold ÷ rooms available × 100 |
| ADR (average daily rate) | The average price a sold room actually fetched | Room revenue ÷ rooms sold |
| RevPAR | Room revenue per room you had to sell | Room revenue ÷ rooms available (the same as occupancy × ADR) |
| Arrivals, departures, no-shows | How the day moved | Counts from the register |
| Revenue by department | Rooms, food, laundry, other | Tonight’s posted charges, before GST |
| Money in, by method | Cash, UPI, card, bank transfer, company account | Payments recorded today |
| Still owed | What guests and accounts owe you | Charges minus payments on bills not yet settled |
Worked example
A 20-room hotel has 1 room out of order, so 19 rooms are available. Tonight it sold 14 of them for ₹35,700 of room revenue before GST.
Had it filled 16 rooms by dropping the average price to ₹2,100, occupancy would read 84.2% and look better — but room revenue would be ₹33,600 and RevPAR ₹1,768.42, lower than before. That is why RevPAR, not occupancy, is the number to watch when you are deciding whether a discount helped.
Mistakes that cost small hotels money
Charging a night twice — or not at all
When some nights are posted by the audit and others are added by hand at check-out, the same night gets charged twice or falls through the gap. The rule is one room charge per room per night, from one place, and a check-out that looks for unposted nights before it totals the bill.
Letting overstays run
A guest who was due out yesterday and is still in the room is occupying stock you cannot sell and is not being charged for it. Extend the stay or check the guest out — during the audit, not at the end of the week.
Counting settlements as cash
A company that settles its account at month end, or an agent that collected the money online, has not put anything in your drawer tonight. Count those amounts as cash and the drawer is “short” by exactly that much — and somebody on the night shift gets blamed for it.
Deleting instead of correcting
A wrong charge should be reversed with a correcting entry and a reason, not deleted. The original line and its correction together are the record; a deleted line is a question nobody can answer later.
Closing the day with the drawer uncounted
Once the date moves, today’s cash difference becomes a mystery about “last week”. Count first, write the difference down with a reason if you know it, then close.
Doing it without software
A night audit does not need a computer. It needs the same register every night. On paper or in a spreadsheet, keep one page per business date with these columns:
| Column | What goes in it |
|---|---|
| Room | Every room, including empty and out-of-order ones |
| Guest | Name on the booking, or “vacant” / “OOO” |
| Rate tonight | The agreed price for this night |
| GST | At the rate for that room’s price |
| Posted | A tick when the night is on the guest’s bill |
| Extras | Food, laundry, minibar posted tonight |
| Paid today | Amount and method: cash, UPI, card, bank |
| Balance | What the guest owes after tonight |
Under the table, write the drawer count, the UPI total from the bank app, the card total and the difference against the book. Sign it; the owner initials it the next morning. It is slower than software, but it is a record — and it is the habit that software makes faster, not the other way round.