Continental Hotel Budget Planner: Zero Base Budgeting and Sustainability Support

Assignment 2 Continental
Hotel Budget Planner

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Preparation of budget planner (cash flow forecast) for Continental Hotel..................................3
TASK 2............................................................................................................................................4
Presenting concept of Traditional based budget and Zero base budget.......................................4
Presenting the process of Zero base budget and its implementation...........................................5
Role of budgeting control in sustainability support.....................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1
Appendix..........................................................................................................................................3

INTRODUCTION
Financial Management is the process of estimating and managing the finances within the
organization for the success of the businesses operates under hotel sector. The present report is
based on the concept of financial management and budgeting which will cover the preparation of
cash budget of Continental Hotel of London (Alvarez and et.al., 2021). Further, the report will
interpretate the outcome of case budget under the budget planner section. Lastly, the second task
will be in the form of report to the Regional Accounts director of Continental Hotel. The report
will cover understanding of traditional and zero base budget, process and implementation of zero
base budget and role of budgeting control on sustainability support.
TASK 1
Preparation of budget planner (cash flow forecast) for Continental Hotel
Covered in appendix section.
Interpretation:
On the basis of cash flow forecast preparation, it is identified that in every month of the
year, the cash flow forecast is showing positive closing cash balance at the end of the month. Not
only that, the cash flow forecast of hotel is also indicating that in month by month the closing
cash balance are increasing and showing upward trend (Korkmaz and Afşar, 2021). This means
that the liquidity performance of the hotel during Jan to December of forthcoming year is good
and positive. It means that the cash income of the hotel in the year is higher than the cash
expenses of the hotel. It might be because that hotel sales all its services as well as products in
cash only and not only that they receive interest on the positive closing cash balance of previous
month in the following month at the rate 3% from the bank.
Not only that, the hotel expenses are also less as compared to revenue which leads to
positive cash balance at the end of each month. The ability of the company to manage cash
within the business is quite good which further interpretate that the overall performance of hotel
is good. The hotel prepares and plan its budget based on past year experiences as well as the
future development (Sheina and et.al., 2019). The impact of which the hotel able to predict or
plan the most accurate and reliable budget income and expenses for the upcoming year. After
analysing the cash budget of Continental hotel of London, it is interpretated that the hotel

analysis its cash inflows as well as cash outflows on a regular’s basis in order to manage the
business finances properly and appropriately.
TASK 2
Presenting concept of Traditional based budget and Zero base budget
Traditional and zero base budget is two most significant technique or method of budgeting
with the help of which companies can predict the future income as well as expenses. The
Continental Hotel should understand both the traditional as well as Zero base budget concept
with the aim of implementing the best budgeting technique within the organization (Berg and
Madsen, 2022).
Traditional Base Budget: The traditional based budgeting is the process of projecting the
business revenue as well as expenses based on the previous year budget. For example, if
Continental hotel need to prepare the budget of 2019 than they will take 2018 budget as a base. It
is one the best tool to predict as well as analyse the business earning and expenses. The major
advantage of traditional base budgeting to Continental hotel is that it helps in decision making
process (Lang, 2020). In case if financial management of Continental hotel is planning to obtain
finance from inventors than they should adopt traditional based budgeting as it is important for
obtaining finance. It is because investors always want see company performance before investing
money (Burkert and et.al., 2018). However, on the other hand, the traditional budgeting is might
be an inaccurate representation of goals and is one of the time consuming process for the
company. It is because this technique takes half of the time of management of Continental hotel
in analysing previous year budget.
Zero Base Budget: This is also one of the significant technique or method of budgeting
which is totally different from traditional budgeting. It is because this is a process of analysing
and allocating the income as well as expenses of business based on program efficiency and
necessity rather than prior year budgets. For Continental Hotel, the zero base budget is more
suitable because it forces them to analyse each operating expenses and consider the area within
the hotel generating more revenue. In this method, the manager of Continental hotel need to
justify all operating expenses for the newer period and also keep the legacy expenses in check.
The zero base budgeting keep the management of continental hotel aware of their cash inflows as
well as outflows (Maheshwari and et.al., 2021). The impact of which the company can identify