Hospitality Business Toolkit : ABC catering PDF

Hospitality Business
Toolkit

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Principles of managing financial performance .....................................................................1
P2 Application of double entry system.......................................................................................2
P3 Prepare trial balance ..............................................................................................................9
TASK 2..........................................................................................................................................10
P4 Application of HR Life cycle ..............................................................................................10
P5 Develop performance management plan.............................................................................11
TASK 3..........................................................................................................................................13
P6 Legislation related to hospitality organisation ....................................................................13
P7 Influence of employment and contract law upon decision making of company ................14
TASK 4..........................................................................................................................................14
P8 Various functional role and its interrelationship .................................................................14
P9 Different ways of communication within an organisation ..................................................15
CONCLUSION .............................................................................................................................17
REFERENCES .............................................................................................................................18
.......................................................................................................................................................18

INTRODUCTION
Hospitality is the process of maintaining or building relationship between guest and a
host, wherein their core function is to bring high level of satisfaction to customer by providing
best quality of product. It is broad category of fields within service industry which involves
accommodation, restaurants or bars, event planning, theme park, transportation, cruise line and
additional fields within the travel and tourism sector. Along with this associated with different
skill and departments to fulfil the customer or guests demand in order to achieve success within
competitive service industry (Bergene, Boluk and Buckley, 2014). IN regard of this report, ABC
catering is considered which is well known for events like birthday parties, weddings and family
gathering. This study includes preparing of journal, trial balance and ledger to ascertain financial
performance of company, developing a HR life cycle as well as performance management plan.
Moreover, laws related to hospitality sector and its impact over firm decision making capability.
Finally, interrelationship between several business function of an organisation is also discuss in
this report.
TASK 1
P1 Principles of managing financial performance
It is one of the essential attribute of an organisation as it helps them to implement
decision towards maximization of value of firm. However, it is the procedure of planning,
organising, directing, controlling in order to accomplish company goal or objective in an
appropriate way. However, monitoring and governing the financial performance of company
help them to analyse its overall position among competitive marketplace. However, some of the
principles which ABC Catering applies to manage its financial performance are as follows:
Timelines: This is concern with providing relevant information to client or users at the
time of requirements so that it help them to make best strategic decision as well as it protects
their data safely. Thus, ABC Catering should apply the same in order to maintain its relevancy
and accuracy among employees and stakeholders for attaining high productivity.
Consistency: Under this, it encouraged ABC Catering to record its transaction on daily
basis so that they can control over confusions or disputes within business premises. Moreover,
they should monitor their financial performance and based on that make corrective course of
action in favour of firm's proficiency.
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Coordinate finance: In this, ABC Catering should take initiative to track its sources of
finance like credit cards, bank accounts, retirement loans in order to maximise wealth and profit
in a better manner. Moreover, they can also adapt budgeting software which makes firm work
more easier and they can easily track all accounts and settle all payments on time without any
delay.
Understand risk: It is one of the common factor in every organisation which lead them to
enrich their profitability ratio. Thus, ABC Catering should take step ahead to examine all
challenges and develop productive strategies in order to tackle it and obtain increased level of
profit margin (Cooper and et. al., 2019).
P2 Application of double entry system
It is very productive tool to ascertain financial performance of ABC Catering as it contain
two entries i.e. debit and credit transaction. Thus, firm evaluates its total funds by applying
several tool of accounts that is mentioned below:
Ledger
Accounts
Cash Account
Date Particulars £ Date Particulars £
01/05/19 To Capital 30000 02/05/19 By Store Rent 1000
03/05/19 By Purchase A/c 10000
04/05/19
By Accident
insurance policy
account 1200
06/05/19 By Laundry Fees 200
07/05/19
By Telephone and
Internet expenses 2220
08/05/19
By Rates, water
and refuse a/c 950
09/05/19 By Wages and 1740
2

salaries
31/05/19 By Balance c/d 12690
Total 30000 Total 30000
Purchase Account
Date Particulars £ Date Particulars £
03/05/19 To Cash 10000
03/05/19 To Account Payable 15000
05/05/19 To WH Adams Ltd 15000
31/05/19 By Balance c/d 40000
Total 40000 Total 40000
Capital Account
Date Particulars £ Date Particulars £
31/05/19 To balance c/d 30000 01/05/19 By Cash 30000
Total 30000 Total 30000
Store Rent Account
Date Particulars £ Date Particulars £
02/05/19 To Cash 1000 31/05/19 By Balance c/d 1000
Total 1000 Total 1000
3

Accident insurance
policy Account
Date Particulars £ Date Particulars £
04/05/19 To Cash 1200 31/05/19 By Balance c/d 1200
Total 1200 Total 1200
Laundry fees Account
Date Particulars £ Date Particulars £
06/05/19 To Cash 200 31/05/19 By Balance c/d 200
Total 200 Total 200
telephone and internet
Account
Date Particulars £ Date Particulars £
07/05/19 To Cash 2220 31/05/19 By Balance c/d 2220
Total 2220 Total 2220
Rates, water charges
and refuse Account
Date Particulars £ Date Particulars £
08/05/19 To Cash 950 31/05/19 By Balance c/d 950
Total 950 Total 950
Wages and salaries
Account
Date Particulars £ Date Particulars £
09/05/19 To Cash 1740 31/05/19 By Balance c/d 1740
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Total 1740 Total 1740
WH Adams Ltd
Date Particulars £ Date Particulars £
31/05/19 To balance c/d 15000 05/05/19 By purchase 15000
Total 15000 Total 15000
Beverage Account
Date Particulars £ Date Particulars £
11/05/19 To sale 13000 31/05/19 By Balance c/d 13000
Total 13000 Total 13000
Food Account
Date Particulars £ Date Particulars £
10/05/19 To sale 20000 31/05/19 By Balance c/d 20000
Total 20000 Total 20000
Sales Account
Date Particulars £ Date Particulars £
01/05/19 To balance c/f 33000 10/05/19 By Beverage 20000
11/05/19 By Food 13000
Total 33000 Total 33000
Journal Entries
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Date Particulars Debit Credit
01/05/19
Cash a/c Dr
To Capital a/c 30000 30000
02/05/19
Store Rent a/c Dr
To cash a/c 1000 1000
03/05/19
Purchase a/c Dr
To Cash a/c 10000 10000
03/05/19
Purchase a/c Dr
To Account Payable a/c 15000 15000
04/05/19
Accident insurance policy a/c Dr
To Cash a/c 1200 1200
05/05/19
Purchase (food supplies)a/c Dr
To WH Adams Ltd a/c 8000 8000
05/05/19
Purchase (Beverages) a/c Dr
To WH Adams Ltd a/c 7000 7000
06/05/19
Laundry fees a/c Dr
To Cash a/c 200 200
07/05/19
telephone and internet a/c Dr
To Cash a/c 2220 2220
08/05/19
Rates, water charges and refuse a/c Dr
To Cash a/c 950 950
09/05/19
Wages and salaries a/c Dr
To Cash a/c 1740 1740
10/05/19
Food a/c Dr
To Sales a/c 20000 20000
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11/05/19
Beverage a/c Dr
To Sales a/c 13000 13000
Profit and Loss Account
Under
marginal
costing
Cost per
unit
Direst Material ($7*5) 35
Direst Labour ($8*4) 32
Variable O/H 5
Marginal cost per unit 72
Selling price 100
-Marginal cost per unit -72
-variable selling price -4
Contribution per unit 24
January
Sales (10000*100) 1000000
Cost of sales:
Opening inventory 0
Material (14000*35) 490000
Labour (14000*32) 448000
Variable o/h (14000*5) 70000
1008000
-Closing inventory (4000*72) 288000
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720000
280000
-Variable selling cost (10000*4) -40000
Contribution 240000
-Fixed costs -24000
-Fixed selling expenses -3000
Actual Net profit/(Net Loss) 213000
February
Sales (12500*100) 1250000
Cost of sales:
Opening inventory (4000*72) 288000
Material (10500*35) 367500
Labour (10500*32) 336000
Variable o/h (10500*5) 52500
900000
-Closing inventory 144000
756000
494000
-Variable selling cost (12500*4) -50000
Contribution 544000
-Fixed costs -24000
-Fixed selling expenses -3000
Actual Net profit/(Net Loss) 571000
Accounts for BluSky Ltd (Extracts) 2017 2016
£’000 £’000
Turnover 2500 2200
Cost of sales 1250 1040
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Gross profit 1250 1160
Distribution costs 40 148
Administration costs 668 595
Operating profit 542 417
Interest payable 20 19
Profit on ordinary activities before taxation 522 398
Tax on profit on ordinary activities 0 10
Profit/(loss) for the financial year 522 388
Statement of Financial Position 2017 2016
£’000 £’000
Non-Current assets
Tangible assets
800
781
Current Assets
Inventories 345 139
Trade Receivables 355 295
Cash 45 114
Total Current Assets 745 548
Current Liabilities
Trade payables 375 300
Bank overdraft 170 40
Total Current liabilities 545 340
Non-Current Liabilities
Long term loans 200 211
Net Assets 800 778
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Capital and reserves
Share capital 500 290
Retained Earnings (Profit & loss account) 300 488
Shareholders’ funds 800 778
Operating profit 542 417
Turnover 2500 2200
Operating profit/Loss margin %
21.68
18.9545454
545
EBIT 542 417
Interest payable 20 19
Interest cover
27.1
21.9473684
211
Current Assets 745 548
Current Liabilities 545 340
Current Ratio 1.3669724771
1.61176470
59
Long term loans 200 211
Capital employed 800 778
Gearing % 25 27.12
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BluSky Ltd
Year
Indicator
2017
Rating
2017
Indicator
2016
Rating
2016
Operating profit/Loss margin %
Low risk 20 Low risk
Interest cover
Low risk 10 Low risk
Current ratio
Medium risk -10 Low risk
Gearing %
Low risk 10 Low risk
Total Score
30
P3 Prepare trial balance
The trial balance of ABC Catering are given below:
TRIAL
BALANCE
1 Purchase Account 40000
2 Sales Account 33000
5 Cash Account 12690
6 Food Account 20000
7 Beverage Account 13000
WH Adams Ltd 15000
Wages and salaries
Account 1740
Rates, water charges and
refuse Account 950
telephone and internet
Account 2220
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Laundry fees Account 200
Accident insurance
policy Account 1200
Store Rent Account 1000
Capital Account 30000
Account Payable 15000
TOTAL 93000 93000
TASK 2
P4 Application of HR Life cycle
It is an essential concept in human resource management which describes the stages of an
employees time with a given organisation and the responsibilities which they carries in order to
accomplish company goal or objective within prescribed time period. Thus, it is very important
aspect for ABC Catering to bring best working culture as well as identify the potentiality of
manpower and based on that delegate them in a proper place. By this, they can obtain high level
of satisfaction and participation from employees and ABC catering can enrich its productivity.
However, the stages of HR life cycle which ABC Catering implies within their business function
are as follows:
Recruitment : It is the core function of company which is linked with hiring right
candidates and placing them in an appropriate or suitable place so that it directly reflect over
firm's growth and development. Thus, in order to succeed in this phase ABC Catering create
strategic plan with a thorough understanding of position i.e. Food & Production manager that
need to be filled. So, HR identify and evaluating applied personnel qualification; match them
with company's standard and based on that they make a decision regarding selecting or rejecting
particular candidate.
Education: Once after recruiting manpower into vacant job role, the nest step is to
provide proper induction program in which ABC Catering communicate to employees regarding
their working culture as well as define them their roles or responsibilities of Food &Production
manager so that there will be less confusion among manpower.
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Motivation:This is a peak component for ABC Catering because it directly impact over
firm's productivity and profitability ratio. Thus, company's leader focus on building bonds with
personnel and encourage them to take participation in business activities which help them to
retain existing employees and control over labour turnover rate. By this, ABC Catering can build
positive impact over personnel attitude and behaviour for obtaining profit margin (Cronin and
Parry, 2014).
Evaluation: Under this stage, ABC Catering's F&B manager supervise and analyse the
performance of its workforce and determine the areas in which thy require more improvement.
Based on received outcome, manger provide suitable training session to personnel so that they
can overcome over their weakness and can enrich firm's productivity in an innovative and
creative style.
Celebration: It is the final phase in HR life cycle, in which ABC Catering's F&B
manager takes an initiative to recognise the effort of employees and appreciate them by
providing memento, prizes, certificate, promotion, transfer, bonus, incentive and many more.
Due to this, ABC Catering can generate a better working atmosphere which add value to
manpower as well as improves firm's brand image.
M2 Importance of HR life cycle to tackle issues of staff retention
Therefore, HR life cycle assist ABC Catering to hire right personnel for their business
function which benefit them by enhancing its productivity and profit margin in an impressive or
productive manner. Along with this, it help them to bring positive attitude among manpower
which motivate them to put their best effort towards an accomplishment of firm goal or objective
which reduces ABC Catering's turnover rate and aid them to retain existing employees.
D2 Provide suitable recommendation to improve HR process throughout human resource life
cycle.
Human Resource is very sensitive and essential business function within ABC Catering
as it directly influence over firm's productivity and proficiency ratio. Therefore, company's HR
should take an initiative to identify individuals skills or interest and according to that they should
assign them roles and responsibilities. By this, employees feel inspired and motivated and put
their best performance for an attainment of ABC Catering objective in a productive manner
within prescribed time limit (Dickinger, Lalicic and Mazanec, 2017).
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P5 Develop performance management plan
It is regarded as one of the important component within an organisation as it's a tool to
give an employee with performance deficiencies as well as render them opportunity to succeed.
The situation is creating a better or healthy working culture within ABC Catering business
premises in order to decrease labour turnover and improve employee retention rate fro gaining
competitive advantage. However, in regard of ABC Catering, they use this element to address
failures and meet the same in order to ameliorate behaviour related concern as well as obtain
maximisation of profit with an optimum utilisation of resources. Hence, the performance
management plan of ABC Catering are mention below:
Plan:It is the initial stage in which ABC Catering 's manager develops several set of
principles, regulation, rules for achieving their goal in an trenchant and prompt manner. As they
define the procedure to carry out each business function, ways to treat customer, providing best
quality of food and also value the money of guest by providing them proper quantity of food. By
this, ABC Catering's manpower will be able to maintain company's working culture and can
easily provide a better experience to customer.
Implement:Once after developing a plan, the next step is to implement those words into
action in order to attain high level of productivity and profitability ratio. However, for attaining
the same ABC Catering takes an initiative to examine each personnel potentiality and capability
and based on that they delegate the task. Due to this, personnel feels encouraged to put their full
effort towards an attainment of company's objective as well as it help them to work as a team
which improve overall performance of firm.
Evaluate:Under this phase, they examine and analyse the performance of subordinates
by using various indicator in order to check whether they are able to meet up ABC Catering
employment standard or quality. Along with this, they makes an arrangements to improve the
weakness of employees by conducting proper training program as well as provide them
enormous platform which lead them to enrich their capability. With the help of this, ABC
Catering can enhance their volume of sales and also enable to add value to firm reputation
among competitive marketplace.
Feedback: It is the last and very important stage as it help ABC Catering to analyse their
own performance towards employees and also to customers in order to obtain maximisation of
profit. For acquiring the same, they gather or collect reviews from their subordinates and based
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on that they make a corrective course of action. By this procedure, it boost ABC Catering's
employees morale and they feel positive attitude towards company's pre determine goal which
directly reflect in the growth and enlargement of business operation and function in an
innovative or creative style (Filimonau and Delysia, 2019).
Therefore, the above explained performance management plan, it enable ABC Catering
to align team, support employee development and enhance their performance by making use of
available resource in an effective and expeditious way.
TASK 3
P6 Legislation related to hospitality organisation
It is regarded as an important instrument of government in organising society and
protecting citizens as it determines amongst other right and responsibilities of individuals or
authorities to whom legislation applies. Thus, employment law enable ABC Catering to protect
workers from practising unfair doings which impact over company's brand image among
industry. Some of the key elements which involve in employment legislation of ABC Catering
are discrimination, minimum wages, workplace safety health laws, workers compensation and
child labour laws etc., in order to gain competitive advantage in a better manner. Thus, there are
few legislation which ABC Catering implies into their business operation are described below:
Employment Act, 2002:In this act, it introduces new provision concerning family
friendly working, the resolution of individual dispute at workplace, equal treatment for fixed –
term employees and other matters. However, it is considered as a major piece of legislation
within ABC Catering business premises as its key theme is to help parents balance work and
family commitment, reform employment tribunal procedure and workplace conflict resolution
mechanism to improve overall performance of firm. Along with this, it motivate ABC Catering
leader to treat their manpower equally and provide enormous employment opportunity which
generate increased level of motivation and encouragement among manpower.
National Minimum Wages Act, 1998: Under this, it is relate with providing fair and
equal reward to employees based on their performance so that there will be less chance of
occurring conflicts, feeling of discrimination among manpower that benefit ABC Catering
productivity. Along with this, it enable them to examine individual effort by calculating working
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hours which they contributed towards company's goal. Thus, it enrich ABC Catering overall
performance and boost manpower morale in a better manner (Jurigová and Tucková, 2016).
Food Safety Act, 1990: This is relate with producing good quality of food and serve the
same to customer in a ethical or disciplined way without spoiling company code of conduct.
Moreover, it help them to treat or welcome their guest in an honourable way so that it reflect
over ABC Catering by increasing its productivity and profitability ratio as well as generate
positive attitude among subordinates.
M3 Examine implication of legislation over firm decision making capability
However, it plays a vital role in ABC Catering because it help them to maintain its
working culture in a very systematic and structured way. Along with this, it assist them to
provide equal opportunities for growth, fair reward system, transparency in communication etc.
which lead them to gain competitive advantage in a better and productive mode.
P7 Influence of employment and contract law upon decision making of company
However, the entire operation and function of hospitality industry is fully governed or
supervised by government legislation and regulation which help them to manage its working
culture impelling. Along with this , it has huge influence over ABC Catering productivity and
decision making process which are given below:
Employment law: It encompasses of information related to personnel salary, sick leave,
working hours, holidays, notice period, pension and benefit scheme. Hover, the impact of this
law over ABC Catering proficiency, for e.g. In case, employer of company decides to extend the
working hour with same amount of pay without conveying it to employees regarding this. At that
time, subordinates has full right to sue over ABC Catering manager under the interest of
employment law.
Company Law: This is concern with form of organisation ownership that is classified
into many like partnership, sole proprietorship, legal entity etc. and in this taxation policy affect
greatly over firm decision making potentiality. IN regard of ABC Catering, if it fails to meet its
due date of tax amount payment then it is obliged to get sue by government or organisation under
the authority of company law (Kysilka and Csaba, 2013).
Contract Law: Under this, it consist the activities like selling, reselling, purchase etc.
which has huge influence over firm decision making process. Thus, if ABC Catering are not able
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to bring high level of satisfaction or motivation then government intervention take place and it
impact negatively on company's brand image and vice versa.
TASK 4
P8 Various functional role and its interrelationship
There are a number of functional role found to be prevailing in hospitality sector. These
are largely interlinked to each other. Such functional role in respect to ABC Catering are
explained below:-
Marketing and Sales: Sales department within ABC Catering provides enterprise
information about the activities and processes of company that are sold so that marketing
department can easily do promotion of such aspects. When marketing takes place effectively,
sale of entity automatically gets inflated. Thus, there is an effective interrelation between both of
these.
Production and Marketing: The marketing department communicates production
department in the premises of ABC Catering of the latest services that are being offered by rival
entities so that it can also offer facilities which outshine the competitors in an effective and
efficient manner. This will give a pace to the production department and they will come up with
latest and innovative offerings which possess the potential of gaining the attention of people,
thereby, enhancing its sales and profitability.
P9 Different ways of communication within an organisation
There are a number of methods of communication pertaining to any particular
organisation which are taken into use in accordance with the requirements of company. In this
regard, the methods of communication that can be taken into use within marketing department of
ABC Catering are found to be written, oral, verbal, face-to-face. All of these are of huge
significance to this department of entity as these help in setting out an appropriate interaction
with customers through which the sales and profitability of corporation can be enhanced. In this
relation, face-to-face communication is used when meetings has to be arranged. Further, written
communication is used when a matter has to be talked about in detail. Oral communication is
used when instructions have to be given to subordinates regarding their duties and
responsibilities. Lastly, verbal communication is used when emphasis is to be laid down on a
newly taken decision.
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Further, to stipulate effective coordination within all the members of marketing
department of ABC Catering, various methods or techniques are used. These are, namely,
formulation of committees, effective communication, implementation of strong organisational
structure and procedures, clearly defined objectives and strong planning. When all these methods
are properly executed within the entity, coordination is effectively set within marketing
department.
Monitoring of activities of marketing department in ABC Catering can take place with
the use any of the two types of methods, namely, qualitative and quantitative. Here, quantitative
methods taken into use numerical information to carry out evaluation of activities and process of
business. Such methods may comprise of auditing of resources and analysis of person-hours
incurred on business activities. Qualitative methods carry out monitoring of non-numerical
aspects of marketing such as success, feasibility, quality.
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