Financial Management, HR Life Cycle, and Legal Considerations in Hospitality Business

This report discusses financial management, HR life cycle, and legal considerations in the hospitality business. It covers topics such as financial transactions, managing financial performance, HR life cycle stages, talent acquisition and retention, and compliance with regulations. The report provides recommendations for improving HR life cycle and managing costs to influence financial performance.

THE HOSPITALITY
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Introduction to the financial transactions of hotels by identifying the types of source
documents and the recording processes.................................................................................4
Discuss the principles for managing and monitoring financial performance of the business.5
Discuss the principles of double entry bookkeeping system of debits and credits using a
standard data...........................................................................................................................5
Produce a basic Trial balance using a sample data, stating the steps used and purpose of the
Trial Balance..........................................................................................................................6
Analyse of various types of cost and how they can be managed to influence the financial
performance of your business and showing how profit margins can be calculated in the
business by using an example.................................................................................................7
Analysing the importance of accurate recording of transactions with accepted accounting
principles................................................................................................................................8
CONCLUSION......................................................................................................................8
TASK 2............................................................................................................................................9
A review of the various stages of the HR life cycle as applied to issues in talent acquisition
and retention within the food and beverage sector.................................................................9
Evaluation of every stage of the HR life cycle and the importance HR plays in supporting,
growing and retaining talent as applied to the specific job role.............................................9
Preparation of a performance management plan to support the specific job role................10
Recommendations on how processes and documents at each stage of the HR life cycle can be
improved by using examples................................................................................................11
TASK 3..........................................................................................................................................11
Examining specific legislation(s) that hospitality organisations has to comply and adhere to in
the daily transaction of business with the help of examples ...............................................11
Analysis of how the company’s employment and contract law impact on business decision-
making..................................................................................................................................12
Evaluation of the potential implications of any Two of the regulations.............................13

Critically reflect on the impact of ethical issues of regulations and legislations of the business
..............................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERNCES.................................................................................................................................15

INTRODUCTION
There are various aspects which are to be taken into consideration by the hospitality sector.
These factors include financial management, human resource management and legal and ethical
practises. This report will discuss about the Intercontinental hotel, a British multinational
company headquartered at Denham, Buckinghamshire, England. This is a globally recognised
company across the world. This report also includes the role of HR life cycle and potential
impact of legal considerations followed by the hospitality business in their operations(Adam,
2020). The report provide the recommendations which will improve the HR life cycle in the
company.
TASK 1
Introduction to the financial transactions of hotels by identifying the types of source documents
and the recording processes.
The role of financial management is very important in the hospitality business. The hotels
generally use a variety of accounting processes for recording their financial transactions. The
different types of source documents and recording processes followed by Intercontinental hotel is
discussed below :
 Sales and Purchases Invoices : This type of documents includes an invoice which is
issues by the seller when he sells any item. The Intercontinental hotel uses these invoices
to keep the record of its sales and purchase. This helps in maintaining proper record of all
the financial transactions related to purchase and sale by the hotel.
 Cheques : It is defined as a bank note which is issued by the banks that the payment has
been made by the customer. The Intercontinental hotel records the special number on this
cheques in order to record that in their book keeping system.
 Receipts : It is the document which is issued by the supplier when the customers makes
the payment of his bill. The intercontinental hotel generates two receipts of the bill of
customer, one for the customer and other one for the hotel(DeMicco and LaForgia, 2020).
This brings clarity at the time of recording financial transactions of the hotel.

Discuss the principles for managing and monitoring financial performance of the business.
It is very important for every business to keep a check on its financial performance regularly in
order to measure its overall performance. The Intercontinental hotel uses various principles for
evaluating its financial performance. These are discussed below :
 Average daily rate : It is a very popular KPI for the hotel industry. It is calculated by
taking into consideration the average revenue of the room and dividing it by the total
rooms sold on that day(Dimitrieva, Fernandes and Nunes, 2018). The intercontinental
hotel checks the average rate at which each room is sold on a particular day.
 Revenue per available room : It helps the hotel in measuring the operational performance.
The intercontinental hotel evaluates the revenue it is generating from the rooms which are
available. This helps the hotel in analysing how successful it is in selling the inventory
available.
Discuss the principles of double entry bookkeeping system of debits and credits using a standard
data.
The double entry bookkeeping system means a system where every transaction is recorded in the
books of the business. It affects at least two accounts in every transaction(Faisal, 2019). The
principles of double entry bookkeeping system followed by the Intercontinental hotel are
discussed below :

 Real accounts : Debit what comes in and credit what goes out. This includes the real
accounts like building, furniture, machinery etc(Ferizi and Kruja, 2018). The
intercontinental hotel purchases furniture, then the furniture account is debited and
supplier account is credited.
 Personal accounts : Debit the receiver and credit the giver. This includes the personal
accounts of persons like debtor, creditor, etc. The intercontinental hotel makes payment
to the creditors, the creditor account is credited and cash account is debited.
 Nominal accounts : Debit all expenses and losses and credit all incomes and gains. These
accounts includes incomes, expenses, profit and loss accounts. When Intercontinental
hotel pays salary to employees, then salary account is debited(Fernandes and Duma,
2019).
Produce a basic Trial balance using a sample data, stating the steps used and purpose of the Trial
Balance.
ACCOUNTS DEBIT CREDIT
ASSETS 10000 -
LIABILITIES - 25000
EQUITY - 2000
DRAWINGS 5000 -
REVENUES - 3000
EXPENSES 15000 -
TOTAL 30000 30000
Steps used in preparation of trial balance :
 Firstly, calculate the balances of each ledger accounts
 Then, record all debit or credit balances in the trial balance
 Calculate the total of debit and credit column

 Verify that the total of both columns is same
Purpose of trial balance :
The main purpose of trial balance is to ensure that all the entries in the books of the companies
are correct. The various purposes of trial balance are discussed below :
 It assists in preparation of year end financial statements and gives idea about the
performance of the company during the financial year(Gu, Sheng and Yuen, 2019).
 Trial balance helps the business at the time of audit in better analysis of financial
statements and rectifies any error in the financial statements.
 It helps in preparing summary of all the financial transactions at one place. It helps the
business in better decision making.
Analyse of various types of cost and how they can be managed to influence the financial
performance of your business and showing how profit margins can be calculated in the
business by using an example.
There are various cost which are involved in the business. These cost which are main are
discussed below :
 Direct Cost : These are the costs which are directly related to the business like cost of
rendering services and producing goods(Hallak, Lee and Onur, 2019). These costs are
easily attached to a product because of its direct nature.
 Indirect Costs : These costs are not directly related to the product.
 Fixed Costs : These costs are not linked with the quantity produced since they are fixed in
nature. These costs include rent, depreciation, etc.
These costs can be managed and reduced to improve financial performance of the hotels. The
intercontinental hotel these methods which are discussed below :
 The hotel should use right technology in their business
 The hotel should try to become paperless in their working
 The hotel shall prepare a budget before starting its operations

The formula of calculating the profit margins is explained below with the help of an example :
Revenue of the hotel – 50,000
Cost of expenses – 25,000
Step 1 : Formula = Profit/Revenue * 100
Step 2 : = 25,000/50,000 * 100 = 50%
Therefore, the profit margins are 50%.
Analysing the importance of accurate recording of transactions with accepted accounting
principles.
Every business has to record its transactions accurately for better evaluation of its financial
performance. The importance of accurate recording of transactions are discussed below :
 It enables the hotels to take control of cash transactions.
 It also help the business in fulfilling the tax obligations.
 It helps the management to take proper business decisions for the business(Islam and
Kirillova, 2020).
CONCLUSION
The financial management is very important for the efficient working of the business. The major
role played by financial management in the organisation are discussed below :
 Financial Planning : It helps in formation of various strategies and financial policies
which will the Intercontinental hotel in achieving its goals and objectives.
 Capital Management : It helps in identifying the areas where the money of the business
can be invested so that the company increase its returns on investment(Kamruzzaman,
2020).

TASK 2
A review of the various stages of the HR life cycle as applied to issues in talent acquisition and
retention within the food and beverage sector.
This cycle depicts the complete journey of an employee within the organisation. The human
resources working in the food and beverage industry are its main workforce since they are
actually dealing with the customers directly. The organisation should try to manage its human
resources by retaining existing employees and attracting new employees to work in food and
beverage industry(Mauri, Sainaghi and Viglia, 2019). The key stages in the HR life cycle are
discussed below :
 Attraction, recruitment and selection
 Induction
 Career planning and development
 Retention
 Separation and termination phase
Evaluation of every stage of the HR life cycle and the importance HR plays in supporting,
growing and retaining talent as applied to the specific job role.
 Attraction, recruitment and selection : Attraction involves building the positive image of
the company in the food and beverage market. Recruitment means hiring new employees
for the business which possess required skills to work in food and beverage sector.
Selection means recruiting right people for the right job.
 Induction : At this stage, the employee is provided by the brief of what is expected from
him from the employer in the organisation. The food and beverage industry is very
dynamic so employees must be assigned their roles(Rivera, 2020).
 Career planning and development : This stage involves providing opportunities to the
employee which will help them in improving their future. There is a great scope in food
and beverage industry so employees should be given ample opportunities.

 Retention : It is very important to retain the existing employees for the improved
performance of food and beverage industry. The organisation will give its employees a
healthy environment, required job satisfaction in order to retain them in the organisation.
 Separation and termination phase : The organisation should analyse the reason why the
employee is leaving his job(Said and Umachandran, 2020).
Importance of HR in organisation :
 Strategic Management : HR plays a significant role in forming strategies in order to
manage the human resources.
 Training and Development : This is an important aspect in the life of employee. The HR
provides various trainings which help the employee to improve his skill and knowledge.
 Maintaining compliance : HR ensures that the organisation complies with all the labour
laws applicable on them.
 Wages and Salaries : The HR department decides the salaries of the employees who are
working in the organisation by keeping in mind the employees and organisational
policies.
Preparation of a performance management plan to support the specific job role
The performance development plans help the employee’s to achieve their goals and objectives
successfully. It also make sure that the goals of the employee’s is aligning with the goals of the
organisation. The performance development plan involves following components :
 Planning : Planning plays a very crucial role in the determining what is required to be
done by the organisation. It involves setting goals and objectives which the business
wants to achieve.
 Monitoring : It involves keeping in check the activities which are operating in the
business. It continuously evaluates the performance and gives valuable feedback to
employee’s.
 Developing : It focuses on improving the existing skills and knowledge of the employee’s
through various training and assignments.

 Rating : The performance of the employee is evaluated and the rating is given
accordingly. This gives motivation to the employee's to work hard and improve their
performance.
 Rewarding : The employee’s are rewarded on the basis of their performance in order to
improve their productivity. It includes giving various perks and benefits to the
employee's.
Recommendations on how processes and documents at each stage of the HR life cycle can be
improved by using examples.
 Attraction, recruitment and selection- The recruitment process can be improved by
preparing an interview template for each role. The company should pay more attention in
candidates who possess great skills and knowledge.
 Induction – While giving induction to the employee’s, the organisation must remember
the culture and discuss the plan with the employees. This will give better idea of job to
the employee’s.
 Career planning and development – The organisation must provide ample opportunities
to the employee’s so that they can improve their abilities.
 Retention- The organisation should provide various benefits to the employee’s in order to
increase their loyalty. This helps the organisation in reducing their overall cost.
 Separation and termination phase – The organisation should analyse the reason of
existing employee’s separation. This will the organisation in making better policies for
the future.
TASK 3
Examining specific legislation(s) that hospitality organisations has to comply and adhere to in
the daily transaction of business with the help of examples .
There are various laws which are applicable on the hospitality business. The laws which are
required to be complied by Intercontinental hotel are mentioned below :

 Industrial Licenses Policies : For running a hotel business, various industrial laws are to
be complied in order to perform operations smoothly. The hotels must update themselves
regularly to keep an idea of the changing rules and regulations.
 Food and Drug Administration Act : This act prohibits interstate trade of adulterated
foods and drugs. The intercontinental hotel provides food to the guests and it has to
comply with this law. This improves the image of the hotel in the market.
 Shops and Establishment Act : This act focuses on regulating the aspects related to the
workers and employment conditions. The Intercontinental hotel has to comply with this
law in order to run its business effectively and efficiently. It regulates the terms of
service, holidays and other working conditions.
 Apprentice Act : This act focuses on regulation and promotion of various trainings and
programmes of apprentices in the business. The Intercontinental hotel should conduct
various skill development trainings which will help the employee’s in improving their
productivity and contribute more to organisational success.
 Employee State Insurance Act : The employee’s which are covered under this act
receives various benefits along with their basic salary. The Intercontinental hotel should
identify the employee’s which are eligible for this act and give them various
benefits(Sheng and Hu, 2021).
Analysis of how the company’s employment and contract law impact on business decision-
making.
Every law which is applicable on the company makes an impact on its decision-making process.
Employment laws are defined as laws which mediates the working conditions in the
organisation. These are also called labour laws since it involves the employee’s and employers of
the organisation. The employment and contract laws directly impact the decision-making of the
company. The laws are discussed below :
 National Labour Relations Act : This act gives the employee’s freedom to bargain with
their employer regarding any issue faced by the employee’s. The employer may get
offend regarding the small issues bring in front by the employee’s. This law also gives
rights to employer and unions so that they can give their opinion on the issues faced by

employee’s. This directly impacts the decision-making as relation between employer and
employee’s are not so healthy.
 Family and Medical Leave Act : This law grants eligible employee’s leave up to a total of
12 work-weeks. This law requires covered employers to provide employee’s with leaves
due to any medical and family reasons. The management of the organisation should take
into consideration this aspect of law in making any decisions for future or formulating
any important policies.
Evaluation of the potential implications of any Two of the regulations
There are various laws which are applicable on the hospitality industry. These
legislations impacts the standards of hospitality industry. Some of these are discussed below :
 Minimum requirement for hospitality compliance: There are various laws which are
to be followed by the hospitality industry while doing their business. The Hospitality
sector follows various standards like ISO 9001 which helps the organisation in running
their business operations in a legal and ethical manner. The hotels are required to
complete all the documents along with their verification by the authorities. These
documents include accountability of employee's and H&S management policy.
 Food and beverage regulations: All the hotels provide their guests food and beverages
during their stay. So the hotels must comply with the food and beverage regulations
which are applicable on the hotel. These regulations protects the interest of the customers
as they directly consume these foods and beverages. The hotels should try to maintain
best quality of their foods and beverages so that customers gets satisfied by the hotel. The
Intercontinental hotel follows all the food and beverage laws and make sure that the
business is operating efficiently.
Critically reflect on the impact of ethical issues of regulations and legislations of the business
The ethical issues are those issues which are not morally correct in the business practises.
These ethical issues directly influence the legislations and regulations of the organisation. These
issues are discrimination and harassment of employee's and toxic environment of the business.
Systematic implementation of legislations help the company in eliminating all the prevailing

ethical issues. These issues hampers the performance of the organisation and creates negative
environment in the organisation. The code of conduct is very important in the working of the
organisation. The organisation can easily resolve all its ethical issues and improve its image in
the market.
CONCLUSION
From the above report, it can be concluded that the business should properly analyse the
financial transactions and documents to maintain a proper record of all the activities. This helps
the organisation in measuring the performance of a particular time period. The report also
addresses the importance of HR life cycle in the retention and acquisition of employees. The
company shall follow all the laws and regulations applicable on the business for the efficient
operations of the organisation.
REFERNCES
Books and Journals

Adam, O., 2020. Business Model Reinvention: Impacts of Covid-19 in The Hospitality
Business (Doctoral dissertation, ISCTE-Instituto Universitario de Lisboa (Portugal)).
DeMicco, F.J. and La Forgia, J., 2020. Hospitality Bridging Healthcare: Career Opportunities for
The Future Hotel School Graduate. Journal of Hospitality & Tourism Research, 44(7),
pp.1072-1079.
Dimitrieva, R., Fernandes, P.O. and Nunes, A., 2018. Importance-performance analysis in the
hospitality business: the example of a three star hotel. In TMS Algarve 2018: Tourism &
Management Studies International Conference (pp. 72-72). ESGHT/Universidade do
Algarve.
Faisal, A., 2019. Entrepreneurial responses to disruptive transformations: an evolutionary
perspective on the hospitality industry of post-quake Christchurch, New
Zealand (Doctoral dissertation, University of Otago).
Ferizi, V. and Kruja, A.D., 2018. Coastline hospitality industry performance, challenges, and
opportunities: evidence from Durres coastline. Managing Sustainable Tourism
Resources, pp.14-38.
Fernandes, L. and Duma, F., 2019, July. Balancing tradition and innovation: assessment of new
luxury hospitality business models and their implications on 5-star hotels in
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Gu, X., Sheng, L. and Yuen, C.Y., 2019. Inbound tourism, hospitality business, and market
structure. Journal of Hospitality & Tourism Research, 43(8), pp.1326-1335.
Hallak, R., Lee, C. and Onur, I., 2019. Examining healthy beverages in the hospitality industry:
Evidence from Australia and New Zealand. British Food Journal.
Islam, M.S. and Kirillova, K., 2020. Non-verbal communication in hospitality: At the
intersection of religion and gender. International Journal of Hospitality
Management, 84, p.102326.
Kamruzzaman, M., 2020. Inbound Tourism, Hospitality Business, and Market Structure
[Summary].
Mauri, A.G., Sainaghi, R. and Viglia, G., 2019. The use of differential pricing in tourism and
hospitality. In Strategic perspectives in destination marketing (pp. 113-142). IGI
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Rivera, M.A., 2020. Fake News and hospitality research. International Journal of Hospitality
Management, 85, p.102473.
Said, M.M.T. and Umachandran, K., 2020. e-HRM Application in Tourism and Hospitality in
Sinai of Egypt. In The Emerald handbook of ICT in tourism and hospitality. Emerald
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Sheng, L. and Hu, W., 2021. RETRACTED ARTICLE:[Tourism and hospitality market
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