Principles for Monitoring and Managing Financial Performance in the Hospitality Business

This report discusses the principles for monitoring and managing financial performance in the hospitality industry. It covers topics such as double entry bookkeeping, trial balance, HR life cycle, performance management, and compliance with industry legislations.

The Hospitality Business
Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Detailed analysis and evaluation of the principle that are essential for monitoring and
managing financial performance............................................................................................3
P2. The application of the double entry system bookkeeping of debit and credit so as to record
purchases and sales at a given period of time.........................................................................4
P3. Examination and evaluation of the trial balance in an appropriate manner.....................9
TASK 2............................................................................................................................................9
P4. Review the different stages of the HR life cycle applied to a specific hospitality job role
and their importance for retaining and developing talent.......................................................9
P5. Identification and development of a performance management plan for hospitality sector
job.........................................................................................................................................11
TASK 3..........................................................................................................................................12
P6. Evaluation of specific legislations that all the companies in the hospitality sector has to
comply with so as to sustain in the industry for a longer time period..................................12
P7. Examination of the company, employment, and contract law that impacts on the working
of the business......................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Hospitality sector is one of the most important as well as crucial sector for each and every
country due to its size and its operation as it can help in the increase of the economy of that
nation and that too within a limited time frame (Parris and McInnis-Bowers, 2017). In this report
there is a detailed discussion of a firm that is East London Catering, which is operational in the
UK and is operating on a huge scale and has many outlets that provide optimum customer
experience resulting in its profitability in the long run. Apart from that this report covers topics
such as principles of managing and monitoring financial performance, double entry,
bookkeeping system of the debit and credit, trial balance, etc. Further this report includes
evaluation of different stages of HR life cycle, developing a performance management plan, and
things that hotel industry has to comply so as to perform smoothly in the industry.
TASK 1
P1. Detailed analysis and evaluation of the principle that are essential for monitoring and
managing financial performance
Financial performance is one of the most crucial aspects as it helps in determining the
performance of the firm in terms of generating revenues from the assets that are available with
the company. This helps in reducing the wastage of money as well as efforts that carry a lot of
value in the current market scenario that is highly dynamic and competitive in nature. East
London Catering records all the transactions that are done in the company on a daily basis so that
all the things can be managed in an accurate and precise format which can add value to the firm
in the long run and some of the principles that it follows are explained below in detail-
Maintaining proper record of stock- The firm that is East London Catering maintains all
the records in an appropriate manner so that it can help in the proper allocation and allotment of
all the resources that are available with the company in an impactful way.
Making key financial statements- East London Catering make financial statements after
analysing all the aspects in a detailed manner so that all the unwanted expenses can be reduced
which can result in increased profitability for the firm in the industry in which it is operational
(Triani, 2019).

Evaluating overhead cost- Overhead costs are very important for a firm and East
London Catering keep a tab on all its additional expenses so that it can be reduced in the future
which can further result in the increased market value of the company in the long run scenario.
P2. The application of the double entry system bookkeeping of debit and credit so as to record
purchases and sales at a given period of time
Double entry system is one of the most critical aspects in the business as it is related with
making necessary entries in two books so that it can match in the end. The two sides of the
account are called as debit and credit and the amount that is withdrawn or given to sellers due to
sales comes in debit part while the earnings that are received comes in credit part. The company
and the owner are separate legal entities and it is also applied to the firm that has been chosen
above. The accounting equation that follows here is Capital= Assets- Liabilities.

Ledger

P3. Examination and evaluation of the trial balance in an appropriate manner
Trial balance carriers all the transactions that are related with the revenue and capital
nature accounts that are contained in the ledger accounts of the business. The list in the trial
balance contains all the name of the each nominal ledger accounts that also includes balance of
that accounts. It is very essential for a company’s trial balance to match both debit and credit side
so that the firm can determine the performance and profitability of the business. Reporting of all
the transactions in an appropriate manner is very important so that it can add value to the firm in
the long run (Stangl, Inversini and Schegg, 2016).
Trial balance
TASK 2
P4. Review the different stages of the HR life cycle applied to a specific hospitality job role and
their importance for retaining and developing talent
Human resources is one of the most significant and necessary job positions in every
company that operates in the market since it assists in the recruitment of intelligent and talented
employees who can bring value to the firm by performing to the best of their ability within a

restricted time period. HR also helps to the long-term growth and development of the firm,
allowing it to thrive in the competitive and dynamic climate of the business. There are various
stages of an HR life cycle, which are all addressed in detail and in a sequential order below-
Attraction- It is the first stage in the process and it is related with adapting to the needs,
requirements, and demands and to capture the attention of the audience so that it can prove
beneficial from the company’s point of view. In it individuals are identified with utmost potential
so that they can help the business to grow and prosper in the industry in which it is operational.
East London Catering’s HR department have employees that are experience in this regard that
adds to the market value of the firm (Lervik and Sutherland, 2017).
Recruitment- It is one of the most important stage as the HR must recruit people that
have a definite skill set which can prove useful for the company and an HR recruits persons that
are highly qualified and experienced so that it can help in the fulfilment of the needs and
requirements of the firm like East London Catering.
On boarding- This stage assists the organisation in obtaining bright and experienced
personnel for the firm who are recruited by HR following a tough process of assessment of all
candidates and then picking the best one who can fulfil all of the company's requirements in an
effective and efficient manner. East London Catering's HR department used various tools and
strategies, such as training programmes, to build a person's skill set so that it may ultimately
benefit the company.
Enablement- This stage is related with making employees familiar with the goals and
objectives of the company so that all the activities are directed towards the attainment and
accomplishment of the set standards. East London Catering maintains a healthy environment in
the company that helps all the individuals to become familiar with the working of the business
and thus it results in the increased performance of the company in the long term context.
Development- It is one of the most important stages since it is concerned with building a
certain skill set of individuals that is essential for the proper operation of the company's
activities. East London Catering organises many training programs and workshops to develop the
skills of individuals that are working for the firm so that it can prove beneficial for the company
as well as from the individual’s point of view.
Retention- HR life cycle involves different kind of activities that has to be performed
and this stage is related with one of them as it is related with performance appraisal,

development and training sessions, motivating the employees working so that it help in the
growth and development of both the company as well as the workers.
Separation- This is the last stage of the HR life cycle and it is related with the separating
both the entity as well as the persons that are working with the company so that it can prove
beneficial which can help in improving the performance of the firm in the long run (Bishop,
Mehra and Partee, 2016).
P5. Identification and development of a performance management plan for hospitality sector job
Performance management is one of the most crucial aspect as it helps in determining,
analysing, and evaluating the performance of the company as a whole so that appropriate and
necessary measures can be taken which can prove beneficial for the firm in the long run. It is
mainly related with the employee’s performance so that it can be evaluated that all the activities
are directed towards the achievement and fulfilment of the goals and objectives that are laid
down at the starting or not. East London Catering keeps a tab on the performance of its workers
so that each one of them is accountable for their performance which can subsequently help the
firm in increasing its value in the market (Kasemsap, 2018). There are different stages of a
performance plan of management and all of them are discussed in detail below-
Stipulation of performance objective- It is the first stage as in it a detailed research is
done on the present scenario and the future one that has to be achieved.
Training- The next step is to provide proper and impactful training to all the workers so
that it can add value to the company and also prove beneficial for individuals too in their
personal as well as professional life. East London Catering tries to improve the existing
knowledge and skill set of workers so that it can help in increasing the performance as a whole.
Evaluation of employee performance- The next step is to evaluate and analyse the
working of the employees so that proper assistance can be given in case if it is needed by an
employee (Etzion, 2020).
Comparison of current performance with benchmarks- After that performance is
compared with the set benchmark so that the deviations can be measured so as to implement
rectification measures in case if deviation is more than expected.
Monitoring and controlling- The last stage is to monitor the performance as well as
control the unnecessary efforts that does not fetch good results.
Performance management plan for the newly appointed accounts assistant-

Problem
recognisance
Employee
engagement
Set clear
objective
Training
programmed
Performance
review
Data dealing Training is
necessary in it
including
instructions to the
accounts assistant
(Cheremkhina,
2017)
Skill
improvement
involving
handling of data
With the guidance
of the seniors and
the superior,
subordinates can
improve their
basic skills so that
it can help the
company in the
long run
After a period of
4 months
Recording of the
entries
Providing basic
education to the
staff
To strongly build
an accounting
system that can
carter the needs
of the business
firm
By proving
different books
and journals that
comply all the
rules and
regulations with
set procedures to
follow (Avraham
and Ketter, 2017)
After a period of
5 months
TASK 3
P6. Evaluation of specific legislations that all the companies in the hospitality sector has to
comply with so as to sustain in the industry for a longer time period
There are a number of different rules and regulations that are set up in order to make firms
comply with all of them so that the customer cannot become a contender of any malpractices that
are prevailing in the current market scenario which is mainly cheating (Haugh, 2020). There are
many codes of conduct and legislations formed for the industry in which East London Catering is
operating and these are explained below in detail-

Licensing Act, 1964- It is an act that came into force in the year 1964 and in it license is
given to industries that provide liquor to the customers so as to stop all the illegal practices that
were prevailing before. East London Catering serves drinks to its customers and has a proper
license for it too which is very crucial to survive in the industry.
Health and Safety Act, 1974- It is an act that was implemented in the year 1974 so that
health of the buyer is not compromised at all as in it food products are market in a systematic
order so that fresh one can be easily identified. East London Catering serves fresh food to the
customer which is one of the reasons for its popularity in the market.
P7. Examination of the company, employment, and contract law that impacts on the working of
the business
The three laws that are company, employment, and contract law have a lot of impact on the
process of decision making of the company. Since it is very important for all firms to comply
with all the laws and hence East London Catering also abides by all the laws so that it cannot
hamper its operation in the long run (Ratten and Dickson, 2020). These laws are further
discussed below-
Company law- These are laws that guides all the firms about their operation so that all
the activities are performed in a systematic manner and East London Catering obey all the laws
so that it can survive and sustain in the competitive and dynamic environment for a much longer
time period as compared to its rivals that are also operating in the similar industry.
Contract law- It is a law that set standards and tells about the operation that can be done
in case of merger of two companies or if one gives contract to another. East London Catering is
operating on a huge scale and thus gives contracts to many organisations and thus it is very
crucial for it to abide by all the laws that are stated in it in order to perform well in the market.
Employment law- This law is related with the employees that are working for the firm
and its related aspects and thus it becomes very crucial for East London Catering to carter all the
needs of the workers so that it can help in the improved performance of the staff in the long term
(Mira, Moura and Mónico, 2018).
For Example- KFC which is a leader in food and beverages industry was fined £1.5
million for fire accident which burned two of their employees.

CONCLUSION
From the foregoing, it can be concluded that the hospitality sector is one of the largest in the
world, making it critical to thoroughly analyse and assess all aspects in order to add value to the
business in the future. Apart from that, it can be concluded that there are many stages of an HR
life cycle, and it is critical to keep track of all of them because they have the potential to increase
the value of the firm in the long term. Furthermore, it can be argued that various laws are enacted
in order to compel firms to follow the rules in order for the country and its residents to benefit.

REFERENCES
Books and journals
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Triani, M., 2019. HOW TO POVERTY AND CONTRIBUTIONS FOR TOURISM IN WEST
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their chosen distribution channel portfolios: Three country insights. International
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Cheremkhina, N., 2017. The effective recruitment, selection and retention practices in the
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Ratten, V. and Dickson, G., 2020. 3 Big data and business intelligence in sport. Statistical
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Mira, M. D. R. C., Moura, A. F. A. and Mónico, L. D. S. M., 2018. A new measure of the quality
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