Hospitality Business Toolkit: Managing Finance, HR Life Cycle, Legal Considerations

This document provides a comprehensive guide on managing finance in the hospitality business, including financial transactions, principles of double entry bookkeeping, and cost management. It also covers the stages of the HR life cycle, such as recruitment and selection, on-boarding, development, retention, and separation. Additionally, it discusses the legal and ethical considerations in the hospitality industry. The document emphasizes the importance of accurately recording financial transactions and applying accounting principles. It also highlights the significance of coordination and integration of different functions within the department. The content is relevant for students studying hospitality management or related courses.

The hospitality business toolkit.

Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1....................................................................................................................................3
Financial transactions in hospitality business and source documents for recording the process.
.....................................................................................................................................................3
Principles for managing and monitoring financial performance of the business. ......................3
Principles of double entry book keeping. ..................................................................................4
Trial balance stating steps used and purpose of trial balance ....................................................5
Types of cost and their management for improving the financial performance. .......................5
Importance of accurately recording the financial transactions with accounting principles........6
ACTIVITY 2....................................................................................................................................7
Reviewing stages of HR Life cycle.............................................................................................7
Evaluating each stage of HR life cycle.......................................................................................8
Develop performance management plan.....................................................................................9
Judgements and recommendations............................................................................................10
ACTIVITY 3..................................................................................................................................10
Specific legislations that company comply and adhere in daily transactions...........................10
Company employment and contract law impact on business decision-making........................11
Examine potential implications of regulations..........................................................................11
Critical reflects of ethical issues...............................................................................................12
ACTIVITY 4..................................................................................................................................12
Covered in PPT.........................................................................................................................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Hospitality business is also known as hospitality industry or the tourism industry. It
includes a broad category of business fields like services industry like business including, event
planning, restaurants, theme parks, cruise line, transportation and the additional fields. Many of
the manager in hospitality are required to focus over the financial side also along with the other
hospitality sides. Managers are required to have an effective control over the activities being
carried on within the organisation to become successful and achieve the required growth.
Present report is about the Fit & Fine restaurant. It will cover the methods of managing the
finance and recording the transactions for minimising the costs within company. It will provide
about the Human resources life cycle in the HR strategy context. Further this will also cover the
understanding about the legal and ethical consideration in hospitality business. Importance of
coordination and integration of different functions of department will be explained in this report.
ACTIVITY 1
Financial transactions in hospitality business and source documents for recording the process.
Fit and fine restaurant have all the business transactions like any other ordinary firm. It
mainly has purchases of raw materials and sales of serving and finished products. All the other
transaction are incurred in accordance with the business requirements. Source document for
recording the transactions are cash registers, bank statements, purchase and sales invoices, time
cards, receipts of credit card, invoices and receipts of various expenses. The accounting process
followed is it first records the transaction in regular books such as sales day book, purchase day
book, cash books by passing a journal entry. It transfers the amount to its respective ledger
account (Sangster, 2016). After the accounts are closed company prepares a trial balance. From
the trial respective financial reports are prepared like income statement, statement of financial
position and cash flows.
Principles for managing & monitoring the financial performance of organisation.
Principles for financial performance management.
 Spending less from what is earned. Business should save money that will help it in
improving its performance.

 Fit and fine by preparing the budgets that are reasonable, realistic and attainable helps in
keeping the costs under control.
 Putting the money in productive activities and investing them in return generating
sectors.
 Debt should be limited to income producing assets that will help the organisation to grow
(Van Horne James, 2017).
 Understanding risks that can influence the business and its success.
Monitoring financial performance
 Financial performance can be monitored by preparing financial statements.
 Preparing the trial balance of aged debtors.
 Measuring the financial performance using Key performance indicators.
 By preparing the statements for working capital and financial ratios.
 Analysing cash flows by preparing cash flows and fund flow statements (Cornett, and
Saunders, 2016).
 Creating dashboards for analysing the financial performance of Fit & fine on periodical
basis.
Principles of double entry book keeping.
In this system every transaction involves 2 aspect that are debit and credit. Two parties - Main principle of the double entry book keeping says that for each debit
there should be a credit of equivalent amount. For each credit, there should be a debit of
the equal amount. In this system for each transaction one account has debit balance &
other account has credit balance. (Double Entry Book Keeping, 2019). Receiver & Giver – In this every transaction have one receiver and one giver. Equal amount of exchange – The money given by party in a transaction should be equal
to amount received. Separate entity – In this businesses are treated separate from its owners (Kuter,
Gurskaya and Bagdasaryan, 2019).
 Results – Under this system totals of debit side should be equal to totals of credit.

Trial balance stating manner & aim of Trial Balance.
Purpose of preparing trial balance.
Trial balance is prepared by Fit and Fine for proving that total balances of all the debit
values is equivalent to total balances of the credit values. In case where total of debit is not
equal to the total of total of credit values this means there is an error in recording the transactions
or in posting them in ledger accounts (Shapiro and Hanouna, 2019). A balanced trial balance
assures that there is not error or mistake in recording the transactions.
Example of Trial Balance
Trial balance
Particular Debit Credit
Cash and
Cash
Equivalents £240.00
Capital
account £300.00
Purchases £200.00
Sales £350.00
Tatiana £50.00
Drawing
account £60.00
Office rent £50.00
Building £150.00
£700.00 £700.00
Steps in Trial balance
Trial balance is created by balancing the credit and debit account balances of the ledger
accounts at the closing period. All the closing debit balances are stated on debit side of trial
balance and all the closing credit account balances are stated on credit side of trial balance .
Balance of both the side should be equal.

Types of cost and their management for improving the financial performance.
A business cannot be carried out without incurring costs. There are various costs incurred
for producing products or services. There are generally two types of cost involved in every
business. No business can be carried without incurring these costs.
Fixed costs – Fixed costs are the costs that do not changes with the change in output. These costs
changes per unit but remains constant in aggregate. These include power & heat, rents etc.
Variable costs – Variable costs are the costs that remains constant per unit but changes in
aggregate. These cost include, raw materials, labour and overheads.
Apart from these there are also other costs such as selling and distribution costs. They are
incurred for selling the products (Carruthers and Espeland, 2017). Administrative costs are
incurred for managing the business activities.
Cost management
Fit and fine for improving the financial performance is required to have adequate control
over these costs. It should make well defined budgets and financial plans for having a structured
path for keeping the costs under control (Stern and et.al., 2018). Fit & Fine using the budgets
should make appropriate allocation of resources to different activities so that it do not make
spending out of the budgeted levels. When the cost are under control this will be enhancing the
financial performance.
Calculations of profit margins.
Gross profit
margin
Total Sales –
COGS/Total
Sales 23.33% 23.06%
COS 5483 5114
Sales 7151 6647
Operating
profit margin
Operating
Income/ Net
Sales 23.31% 23.08%
Operating
income 1667 1534

Revenues 7151 6647
Importance of accurately recording the financial transactions with accounting principles
As per the statuary requirements all the financial transactions are required to be recorded
according standards. Financial transactions should be recorded accurately applying the
accounting principles for giving true and fair view to the financial statements (Titman, Keown
and Martin, 2011). Accounting standards makes the financial statements comparable with other
competitors and in analysing its performance.
ACTIVITY 2
Reviewing stages of HR Life cycle.
Human resource managers plays an important role within the hospitality sector. This
creates more effectiveness for sector to manage their employees for more growth of company.
HR has various responsibilities such as managing, developing and recruiting employees for
working within the company (Prikshat and Hoque, 2018). In order to properly managed
employees within the Fit & Fine restaurant here is review all the stages of HR life cycle. The
main concept of HR life cycle in human resources management which is describes stages of an
employee's time with given organization and allocate responsibilities of the human resources
department at each stage. The explanations and review stages of HR life cycle are as follows: Recruitment and selection: This is the first stage of HR life cycle. This is refers to them
process of selecting the best candidate for the organization who meet the needs of
qualification and skills which are required. In this stage manager of Fit & Fine restaurant
perform a talent acquisition for selecting the best candidate who have required experience
as well as skills which are needed for this post which is food and beverages sector. In that
company use different methods of recruitment are employee referrals, direct advertising
and through recruitment agencies. On-boarding: on-boarding is the process through which new employees are introducing
to others and organization. With this process employees become a member of company
workforce with learning and job duties (Gupta, 2019). Here is HR manager give training
to candidates for develop knowledge and retain within food and beverages sector.

 Development: This is the stage at which employee and HR department work out long
term career goals with company. This can use personality profile testing with the help of
this employee determine the best career options with company for retaining talent within
the food and beverage sector within the Fit & Fine restaurant. Retention: At the stage, HR life cycle motivate to employee and give opportunity to
giving hard contribution for achieving goals and objectives of company by performing
well within the food and beverages sector.
 Separation: This is the last stage, where HR manager take interview and feedbacks from
those employees who are leaving job. Here, they are determined reason behind this
decision and improve current working.
Evaluating each stage of HR life cycle.
Here is evaluated each stages of HR life cycle which are review above. Those are
Recruitment and selection, on-boarding, development, retention and separation.
Recruitment and selection:
This done with evaluating information required by the applicant and taking their face to
face interview. The evaluation of this is complete with taking interview of applicant and analysis
those skills which are important for Food and beverages manager like be proactive, strong
leadership skills and knowledge of food safety and hygiene (Crane and Hartwell, 2019). In this
HR plays an important role for selecting candidate because they are responsible for hire
candidate.
On-boarding:
In this stage, Hr plays an important role in supporting and growth because they are
provided complete knowledge to employees which are related with policies and procedures of
restaurant. This evaluates through training and development process. Throughout this process
manager of Fit & Fine able to make new Food and beverage manager familiar with working
environment and their task in effective manner.
Development:
The HR plays important role for supporting development process by providing several
tasks and opportunities to new employee. Through that food and beverage manager is able to
improve their skills and capability (Kwon and Park, 2019). Also, organize training program for

develop skills of food department to make them prepare for future challenge and growth
opportunities.
Retention:
This is stage the manager of Fit & fine restaurant motivate and appreciate employees for
performing well. For retention of food and beverage manager, HR provide rewards for good
performance.
Separation:
In this stage, HR manager of Fit & fine plays an important role for improving working
condition by taking existing interview of food and beverage manager. This support to improve
the weaker point within the Food and beverage departments.
In those stages, HR plays an important role for developing growth and retaining talent for
food and beverage manager.
Develop performance management plan.
Performance management is the process which ah organization use for align their
knowledge workers and resource for strategic objectives and priorities in order to ensure that Fit
& Fine restaurant objectives and long term goals. This considers with steps which are explains
below: Plan: Assess the priority and establish expectations for each individual. In this provide
proper direction and outline process by which checks in will be completed format of
work (Zhou, 2017). Here HR manager analysis complete improvement areas for food and
beverage manager. Monitor: Here is HR manager is analysis and monitor performance of food and beverage
manager as per expectations required from them. As well as, communicate purpose and
improvement tips to them for improve their performance in effective manner.
 Review: at this stage, manager of Fit & fine restaurant review and assessing performance
which already been done. This is important because of providing employees new
opportunities to improve performance.
Performance management plan for food and beverage manager:
Improvement
objective
Success criteria Resources
required
Review schedule Results

To improve
ability of
creation and
invention toward
food and
beverage.
Innovative food
serving like juices
serving style.
Training and
development
program by
experts.
Research on
customers tests
and trends.
30 days The achievement
of objective
through attractive
invention in food.
This increase
attraction of
gymnasium
people.
To improve
kitchen safety
techniques.
Work with proper
safety and proper
use of
equipments.
Training of uses
equipments.
Safety measures.
1.5 months Employees are
safe when the use
of kitchen
equipments.
Judgements and recommendations.
The recommendations and judgements at each stage of HR life cycle are as follows: Recruitment and selection: in this manager of Fit & fine should organize campus
recruitment process. This help to hire the best food and beverage manager for company.
For example: Campus interview is help to hire the best one from some students. On-boarding: here manager need to provide complete information about policies and
procedures of food and beverage manager (Stewart and Brown, 2019). This help to gain
complete knowledge about policies to manager. Development: here is they should organize training and development for employees to
build positive working. Retentions: in order to develop employees retentions, manager should provide rewards
and incentives to employees.
 Separation: needs to take feedbacks and suggestion for better improvement.
ACTIVITY 3
Specific legislations that company comply and adhere in daily transactions.
It is very difficult and confusing the difference between laws, regulations and standards.
Legislations are the pass the laws, government agencies to develop regulations and implement

laws and approves standards. There some different legislations which are complied and adhere
within the food and beverage departments. In respect of that, here is reflects those legislations
which have needs on daily basis to food and beverage manager of Fit and fine are as follows:
Food safety legislation:
This is the important legislation which is used on daily basis by food and beverage
manager (Saurombe, Barkhuizen and Schutte, 2017). This is applicable when food is preparing.
For example: at time of preparing food needs wash hands, sanitize, cooks food to safe
temperature, use separate cutting boards. This is uses on daily basis by food and safety manager.
Alcohol licensing:
This is another which is also used on daily transaction of businesses at the time of
providing and serving alcohol. This is applicable on businesses when business is provided
alcohol to customers. In these businesses required local alcohol beverage control.
Consumer legislation:
This is also used on daily basis when customers are entered within the restaurant and
place their order. For example: in this food and beverage manager needs to provide hygienic
foods to customers as per their taste.
Employee legislation:
This is applicable on daily transaction within the business. For example: equal
opportunities, anti discriminations and safeguarding purpose.
Company employment and contract law impact on business decision-making.
Company law affect food and beverage department to employee relationship and vice
versa. Employment law is designed for protecting rights of employees and covers all the aspects
of employer relationship (Vojtovic, Navickas and Gruzauskas, 2016). Employment law is the
collection of laws and rules which regulate relationship between employer and employee. This
affect the decision-making process of food and beverage department because safety measures.
For example: if employees is injured at the time of work within the kitchen in that they require
complete safety and treatment. In this case this affect decision-making because of manager need
to take decision as per employment law i.e. healthy and safety act. Contract law is the agreement
between parties creating mutual obligations enforceable by law. A breach of contract is failure,
without any legal excuse to perform any promise. For example: if employees is breach contract
then employer have right to take action because this gives negative impact on the business.

Examine potential implications of regulations.
Food and safety act 1990:
This provide the framework for all food legislation. The main responsibilities for all food
businesses under this act are ensures the food businesses serves or sells is of the nature and
quality of the consumers are expects. In that food and beverages department of Fit and fine
restaurant needs to use. For example: restaurant food premises meet strict hygiene standards and
ensure about food is safe to eat or not.
Health and safety act 1947:
This provides the framework for all health legislations. The main responsibilities for all
the kitchen staff who produce food for customers (Lodorfos and et.al., 2018). In these standards
should be followed which are use proper kitchen equipment, wear food preparing cloths.
Critical reflects of ethical issues.
Data protection: Data protection is very crucial aspects which is need to mention within
the hospitality sector. For example: restaurant manager have recipes for food preparation those
can be leaked in which manager needs to follow data protection act in order to protect their food
system (Vogel, 2018). Cyber security: This is also important for managing within the food and
beverage department because of cyber security. In this manager needs to follow related law for
better work and improve employment contract.
ACTIVITY 4
Covered in PPT.
CONCLUSION
From the above research it could be concluded that financial management is
important for minimising the costs and expenses. The double entry book-keeping system helps
the organisation to maintain its record in an organised manner. Human resource management has
to play a critical role in the organisation in managing and retaining the employees by using the
techniques. Businesses are required to consider the impact of both legal and ethical issues in an
organisation. The organisation is required to coordinate different departments using methods of
communication coordination and monitoring.

REFERENCES
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