diff --git a/app.py b/app.py
index ca059c8..a83aeb1 100644
--- a/app.py
+++ b/app.py
@@ -9673,9 +9673,15 @@ def export_time_attendance_excel(records, project_name_for_filename, date_range_
             _nxt_ins  = [r for r in _next_recs if not _is_out(r)]
             _nxt_outs = [r for r in _next_recs if     _is_out(r)]
 
-            # Day N must have an unmatched late check-in (more INs than OUTs,
+            # Early-morning OUTs on Day N (hour <= 3) are overnight orphans from
+            # Day N-1.  Counting them as regular Day N outs inflates the out-count
+            # and makes the day appear balanced, which suppresses detection of an
+            # unmatched late IN that needs a next-day OUT.  Exclude them.
+            _day_outs_non_early = [r for r in _day_outs if r.check_in_time.hour > 3]
+
+            # Day N must have an unmatched late check-in (more INs than non-early OUTs,
             # with at least one IN at or after 20:00)
-            if len(_day_ins) <= len(_day_outs):
+            if len(_day_ins) <= len(_day_outs_non_early):
                 continue
             _late_ins = [r for r in _day_ins if r.check_in_time.hour >= 20]
             if not _late_ins:
diff --git a/working_hours_calculator.py b/working_hours_calculator.py
index b2633fe..b3882b1 100644
--- a/working_hours_calculator.py
+++ b/working_hours_calculator.py
@@ -504,13 +504,25 @@ class WorkingHoursCalculator:
                     check_ins  = [r for r in day_records if r.record_type == 'check_in']
                     check_outs = [r for r in day_records if r.record_type == 'check_out']
 
+                    # Early-morning OUTs on Day N (hour <= OVERNIGHT_CHECKOUT_HOUR) are
+                    # themselves overnight orphans from Day N-1.  Counting them as regular
+                    # Day N outs inflates the out-count and makes the day appear balanced,
+                    # suppressing overnight detection for the late IN that actually needs
+                    # a next-day OUT.  Exclude them from the balance comparison.
+                    check_outs_non_early = [
+                        r for r in check_outs
+                        if (r.check_in_time.hour if isinstance(r.check_in_time, time) else r.timestamp.hour)
+                        > OVERNIGHT_CHECKOUT_HOUR
+                    ]
+
                     # Any unmatched check-ins that started late in the evening?
                     unmatched_late_ins = []
                     for ci in check_ins:
                         ci_hour = ci.check_in_time.hour if isinstance(ci.check_in_time, time) else ci.timestamp.hour
                         if ci_hour >= OVERNIGHT_CHECKIN_HOUR:
-                            # Check that there is no check-out already on the same day for this in
-                            if len(check_outs) < len(check_ins):
+                            # Use non-early outs so orphaned early-morning OUTs from
+                            # the prior night do not mask an unmatched late IN.
+                            if len(check_outs_non_early) < len(check_ins):
                                 unmatched_late_ins.append(ci)
 
                     if not unmatched_late_ins: