Principles of managing addition to monitoring financial performance

This report discusses about ways to manage finance resources and record transactions for minimizing costs in the hospitality sector.

Hospitality Business
Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
P1. Principles of managing addition to monitoring financial performance.................................1
P2. Application of double entry system of book keeping............................................................2
P3. Producing basic trial balance.................................................................................................4
ACTIVITY 2....................................................................................................................................5
P4. Reviewing distinct stages of HR life cycle which are applied to particular hospitality job
role along with importance to retain as well as develop talent....................................................5
P5. Development of performance management plan...................................................................6
ACTIVITY 3....................................................................................................................................7
P6. Identification of legislation that has to be complied by hospitality company.......................7
P7. Usage of particular examples that illustrates ways in which company, employment as well
as contract law has potential impacts on business decision making within hospitality industry.
......................................................................................................................................................8
ACTIVITY 4....................................................................................................................................9
Covered in PPT............................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Hospitality business is beamy area in the service sector which comprises of event
planning, cruise line, lodging, restaurants, transportation and additional fields. At centre of
hospitality sector, companies engage in providing various accommodation and other services to
individuals that aids in recreation addition to support the well-being (Adie, 2019). This report is
prepared by considering two companies that are Detox Juice Bar and Ritz London Hotel. Detox
Juice Bar is a new enterprise located at Moorgate, UK to serve wide variety of juices along with
smoothies and blend the all with alcoholic spirits that creates healthy alternative for the targetted
population. The other company is Ritz London Hotel which is leading hospitality organisation in
UK to offer luxury services within the industry. The report discusses about ways to manage
finance resources and record transactions for minimising costs in the hospitality sector. It further
assess how HR life cycle are manage within HR strategy context. At last, it illustrates impacts of
legal along with ethical considerations on hospitality business.
ACTIVITY 1
P1. Principles of managing addition to monitoring financial performance.
Business transactions: The important activity which can be measured within monetary
terms and affects financial operations of enterprise are referred as business transactions
(Angelina and Yoel, 2019). It majorly involves interchanging of services, money and
commodities among two or more people or parties for making profits. In case with Detox Juice
Bar, following are distinct business transaction types that occurs in the receptive entity:
Sales: The transactions wherein products are transferred from purchaser to seller either in
credit or for money is said to sales transactions. The managers of Detox Juice Bar records all
transactions related to sales in accounting journal.
Purchases: Transactions which are required by company for obtaining products which
are needed for goal accomplishment are termed as purchase transactions. The respective entity
makes purchase in two types that are cash purchase and credit purchase.
Receipts: Transactions which are related to getting paid for offering commodities
providing commodities to another people or business are described as receipts. At respective
company, the receipt transactions are recorded in journal as debit to cash or credit to account
receivable for the seller.
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Payments: Transactions that are said as business receiving money for some commodities
are payment transactions (Boshnakova and Goldblatt, 2017). These are recorded within
accounting journal as debit to accounts payable as well as credit to cash for issuing payments at
chosen company.
Financial performances: The subjective measure stating how well assets are used by
company from their primary business mode and generates revenue are said as financial
performances. The administrators of Detox Juice Bar uses following methods for measuring
financial performances:
Return on investment: Performance measure that is generally utilised for evaluating
efficiency of investment as well as comparing efficiency of distinct investment numbers is return
on investment. It is calculated through dividing the benefit of investment by investment cost. For
Detox Juice Bar, it at present deals in offering variants of juices addition smoothies and aims to
expand the bar into Zym. For this, it is important to use the method for measuring returns for
investment to gain beneficiary results.
Key Performance indicators: It is another method to measure performance
(Cetindamar, Phaal and Probert, 2016). It is a quantifiable measure that is primarily used for
evaluating success of institution, employees and so on to meet performance objectives. By using
it, the chosen business can evaluate success of various strategies on the basis of key metrics such
as financial KPI and non financial KPI.
P2. Application of double entry system of book keeping
Profit and loss statements
The financial statements which summarises revenues, costs addition to expenses that are
incurred in particular accounting period are said as profit and loss statements (Elshaer, 2019).
Double entry book-keeping is an accounting system in which every transaction to account needs
corresponding
as well as opposite entry to distinct account. It has two equal addition top corresponding sides
that are debit and credit.
Profit and loss statement for Detox Juice Bar for the month of January 2020
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Effective recoding of debit and credit:
In a business, double entry system is considered as standard medium to record
transactions in effective manner (Hanrahan, 2017). To record the entries in effective manner,
various rules are used by financial managers of Detox Juice Bar. The first rule is debit the
receiver and credit the giver, second one is debit all expenses as well as losses, credit all gains
along with incomes, third rule is debit what comes in and credit what goes out. With all these
rules, the transactions are effectively recorded in credit and debit side.
Manual addition to computer software to record financial data together with information
Financial transactions in accounting are recorded, processed along with elaborated so that
potential decisions are framed by properly analysing the financial statements. Transitionally, in
companies all the financial data as well as information were recorded in manual manner by the
accountants or registrars of the entity. As time has changed and availability of advance
technology has resulted in adoption of computer programmes to record transactions and
information in accurate, speedily and convenient ways. In Detox Juice Bar, computer
programmes are used for the purpose to record financial information and use it while framing
potential decisions.
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P3. Producing basic trial balance.
Trial balance is mentioned to the statement that involves list of each general ledger
accounts and their values (Jarratt and et. al., 2019). Moreover, it is statement of all credits along
with debits in double entry system. The balance off rule is used for ensuring that every
transactions must be recorded in debit of ledger must have credit in another. When double entry
is carried out accurately, the total of debit balance are always equal to total of credit balances.
Trial Balance for Detox Juice Bar
Role of trial balance in identification as well as rectification of errors: Preparation of
trial balance assist companies to get overall scenario of ledger account balances. The another role
played by trail balance is that it helps managers to identify as well as rectify certain accounting
errors promptly (McGuire, 2016). When ending balance related to each general ledgers are not
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equivalent in trial balance, then it plays role of assisting to check that all the transactions and
entries are recorded properly and if not then rectifications are done to get accurate results.
Components of trial balance: Trial balance includes list of all accounts or entity and
balances. In case with trial balance of Detox Juice bar, major components are list of accounts,
balances, company name and total amount.
Use of budgets to plan and control:
Income streams: It is the money that is generated by an organisation of continuous basis.
In context to Detox Juice Bar, some of its income streams are profit income, capital gains and
earned income.
Fixed costs and variable costs: Fixed costs are the costs which remains fixed for entire
accounting period. Some of the fixed costs that are incurred in selected company are rent, loan
repayments and many more. In contrary, variable costs are the costs that varies with time. Few
variable costs incurred in Detox Juice Bar are raw material cost, labour costs and so on.
Pricing strategies and setting realistic goals: The strategies used by companies to sell
products with suitable pricing are pricing strategies. At selected business, cost plus pricing
strategy is used in price is set by adding all the costs and then adding mark up cost so that all the
realistic goals are achieved promptly.
ACTIVITY 2
P4. Reviewing distinct stages of HR life cycle which are applied to particular hospitality job role
along with importance to retain as well as develop talent.
Ritz London Hotel is leading hospitality business in UK that undertakes huge activities to
meet desires of customers for accommodation and so on. It was established by César Ritz who
was Swiss Hotelier in May 1996. The hotel is symbol of luxury as well as high society that
satisfies needs of long distant and wide consumers.
HR life cycle:
HR life-cycle is popular concept in the field on human resource management. It describes
various stages of manpower's time with the enterprise and responsibilities that human resource
department have at each stage (Nelson, 2018). The job role selected is food and beverage
manager who manages and oversees all the operations and performances of employees at Ritz
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London Hotel. Following are the review of different HR life-cycle stages that ensures effective
management:
Recruitment and selection: At this stage, the required candidates are sourced, attracted
and hired for particular job position in company. The stage assist food and beverage manager of
chosen hotel to attract and select efficient, knowledgeable and competent candidate who have
ability to give desired results. Along with this, in enhances growth, turnover and productivity
among existing workforce and entity to retain and develop the talent.
On-boarding and orientation: At this stage, activities related to on-boarding as well as
orientation are performed by the managers of entity (Silva, 2017). In this, food and beverage
manager of Ritz London Hotel introduces the new candidate with all the other existing staff and
familiarise them with the workings. Along with this, the managers conducts test to determine
employee existing skills and determination and as per the results they are allocated tasks that
help in retaining addition to develop the talent in specialised work.
Exit and transition: In the chosen business, manpower leaves workings due to many
reasons. The main is retirement and availability of better opportunities at other places. At this
phase of HR life cycle, food and beverage manager manages transition through laying flexible
human resource practices and conducting exit interviews so that essential information are
collected due to which exit decision is taken by employee. With this, current practices are
modified and implemented that helps in retaining talents at workplace.
Distinct recruitment/ interview methods:
At Ritz London Hotel, Food and beverage managers uses wide types of recruitment
methods that are internal methods and external methods. Promotion and transfer are some
internal; methods while employment agencies, campus recruitment and advertisement are
external methods that are used to recruit people (Singh, 2015). The interview methods that the
manager uses are phone interview, case interview and behavioural based interview.
P5. Development of performance management plan.
Performance management plan
It is a framework that is composed of various phases to determine strength and
weaknesses of a person to manage the performance for effective results. In present context, Ritz
London Hotel is facing some issues related to heavy staff absenteeism along with low
motivation. The main job role of food and Beverage manager for the employees is to retain them
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and improve their motivation. To overcome from these issues, performance management plan is
developed that is discussed underneath:
Plan: Herein, priorities and expectations for all personnels are planned for all employees
of company (Skilton, 2016). In this, food and beverage manager discusses performance
expectations as well as things that are to be delivered by manpower for the outcomes are planned
with top administrators.
Track or monitor: Herein, workings of all employees are tracked and monitored through
regular checking their workings and outcomes. In this stage, managers evaluates effectiveness of
entire performance management plan along with monitors performances of all employees so that
they can find deviations for the issues by understanding the problems. Food and beverage
manager monitors performances of all personnels on weekly or monthly basis to measure
performances through evaluating the existing performances and further supervises activities
which helps in providing motivation to employees and retaining them for long term.
Review: Herein, all the activities are reviewed through evaluating what is performed and
what is not (Performance management: plan, monitor, review, 2020). By reviewing all the
workings, various opportunities are provided to manpower so that they can improve their
workings and develop themselves for the upcoming career. In case with Ritz London Hotel,
managers uses checklist for reviewing performance level of each manpower as per the planned
criteria.
With this performance management procedure, all the problems related to negative
behaviour as well as staff absenteeism are resolved positively. This assist in engaging all
employees within the company. Along with this, appreciating performances and providing them
rewards will benefit in calming negative behaviour. Moreover, team work will stimulate growth
addition to eradicate pressure to work that will help Ritz London Hotel to retain staff members
for long duration.
ACTIVITY 3
P6. Identification of legislation that has to be complied by hospitality company.
Legislations are the laws governed by political authorities of a nation and are mandatory
to be complied by all companies (Van der Wagen and White, 2018.). In hospitality industry,
various legislations including data protection, cyber security, anti-discrimination and many more
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are mandatory to be adhered by the companies. In context to Ritz London Hotel, following
legislations are complied by the managers:
Equal Opportunity Act, 1972: The legislation was governed to provide equal
opportunities to all candidates for the employment or other aspects. The human resource
managers of the company works as per the legislation and gives equal opportunities to all
existing talent to develop themselves. With this, managers of the institution prohibits
discrimination in their programs in context to national origin, disability and so on.
Safeguarding act, 2014: It is also known as Care act which illustrates about ways
organisational authorities must safeguard adults or other people from risk of neglection or abuse
( Walliman, 2017). Managers of Ritz London Hotel implements the legislation so to safeguard
interest and ideas of adult personnel and retain them till their retirement.
P7. Usage of particular examples that illustrates ways in which company, employment as well as
contract law has potential impacts on business decision making within hospitality industry.
For an enterprise, it is important to execute workings and practices in coordinated modes.
For this, certain legislations are governed for restricting unethical work that harms society and
others. In hospitality industry, distinct legislations impacts in different ways and directly impacts
of decision making of company.
Company law is composition of legislations that governs conduct of persons, rights of
entities and its various determinations for funding and governance are framed after considering
these laws. When sudden changes are made in the law then it becomes very difficult for
managers to modify the workings and implement them in short timings.
Employment law are said to the legislations that regulate healthy relationship among
manpower and managers of company (Yusupova and Pozdeeva, 2018). There are wide types of
legislations that protect organisational people from unfair practices, discrimination, unsafe
working conditions and so on. When all the laws are properly and systematically followed then it
shows favourable outcomes leading towards positive impacts.
Contract laws are all about enforcing agreements. These comprises of legal documents
that governs agreements. When the organisation make agreements with other entities by
following all the provisions stated under the law then there are more chances of successful
decision making. However, when some activities are performed illegally then it results in
negative impacts. For instance, when Ritz London Hotel perform any illegal attempt that is not
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part of contract then the other firm can sue or file case against it which will cause huge penalties
and downfall in image leading to negative impacts on decision to work illegally.
ACTIVITY 4
Covered in PPT
CONCLUSION
The above discussion concludes that hospitality businesses concentrates towards
satisfying customers through offering suitable commodities and services which meets their
choices and needs. Business transactions that incurs at company includes purchase, sales,
receipts and payments. Trial balance plays important role in determining and rectifying any error
through proper analysis of all journal and ledger. Legislation including safeguarding act and
equal opportunity act are complied by all the hospitality enterprises.
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REFERENCES
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Silva, C.G., 2017. The impact of dam removal on the construction, and theleisure and hospitality
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Mexico State University.
Singh, R., 2015. Empirical examination of the impact of total quality services on hospitality
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Skilton, M., 2016. Building digital ecosystem architectures: A guide to enterprise architecting
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Van der Wagen, L. and White, L., 2018. Hospitality management. Cengage AU.
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Yusupova, S. and Pozdeeva, S., 2018, June. Controlling the functioning of the hotel business. In
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Performance management: plan, monitor, review, 2020. [Online]. Available through.
<https://www.workfront.com/blog/performance-management-plan-monitor-review>.
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