Principles of Managing and Monitoring Financial Performance in Hospitality Industry

This document discusses the principles of managing and monitoring financial performance in the hospitality industry. It covers topics such as making financial statement reports, evaluating overhead costs, and maintaining stock records. The document also provides insights into the double-entry bookkeeping system and trial balance. It is relevant for students studying hospitality management or finance.

HOSPITALITY
BUSINESS TOOLKIT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Principles of managing and monitoring financial performance........................................3
P2 Double Entry book keeping system of debits and credits to record sales and purchases
transactions in a general ledger..............................................................................................4
P3 Trial Balance applying the use of the balance off rule to complete the ledger................8
TASK 2............................................................................................................................................9
P4 Different stages of HR life cycle applied to a specific hospitality job role and their
importance for retaining and developing talent......................................................................9
P5 Performance management plan and job role applying techniques to resolve both negative
behaviours and overcome issues of staff retention...............................................................10
TASK 3..........................................................................................................................................11
P6 Specific legislation that a hospitality organisation has to comply and adhere................11
P7 Company Employment and contract law has a potential impact upon business decision
making in the hospitality industry........................................................................................12
TASK 4..........................................................................................................................................12
P8 Evaluate interrelation between various functional roles in the hospitality sector ..........12
P9 Provide various approaches to communication, coordination and monitoring for particular
division in hospitality enterprise to strengthen value chain.................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Hospitality industry is a wide industry that involves many departments and services such
as entertainment, accommodation, lodging, event planning, food and beverages and many more.
By analysing current marketing trends, that ensures customers satisfaction at it's top most
priority. An organisation can achieve it's success in plans and objectives by prioritising their
satisfaction of respective customers of the business firm. Every organisation irrespective of it's
scale of business operations requires good guide from respective leaders of the firm towards
completion of desired goals of the firm effectively. In this report Dorchester is been taken into
consideration, it is a 5 star luxury hotel in London. The company was established in 1931 and is
owned by Brunei Agency. The present report covers financial management and record
transaction with respect to it's recent decline in cost. With addition to it Human resource life
cycle is been discusses in the report. The main focus of this report is to provide with the
upcoming opportunities to the business firm and covers respective health safety precautions
while delivering of food and beverages related products to companies customers.
TASK 1
P1 Principles of monitoring and managing financial performance
Financial performance of the company helps in generating the cash and the revenue of the
organisation in the proper manner and helps in building the good reputation by which the
individuals get attracted. There are various principals which are to be followed in proper
recording of transaction and should be observed in an proper manner. It helps in increasing the
benefits of the organisation and minimize the cost of the organisation so the decisions are to be
taken in proper manner(Bartolacci, Caputo and Soverchia, 2020). Dorchester company records
the transaction on the daily basis like the receipts, vouchers and the raw materials used by the
company are to be recorded on the daily basis so that the decision is to be taken in the manner.
Every organisation should control the cost and the finance and the cash-flows are to be
monitored on the regular basis so that the decisions are to be taken by watching the different
statements in the proper manner (Bush, Bell and Middlewood eds., 2019). Below are the various
principals of the financial management described:

Making financial statement reports- It helps in viewing the financial performance of
the company so that the decision is to be taken care in the proper manner and will not affect the
business. The company should observe the balance sheet and the trial balance on the regular
basis. Dorchester company should prepare these reports on the regular basis so that the
customers get attracted easily and reports are to be prepared by which output will also increase in
the future.
Evaluating overhead cost- It helps in gaining the entity in an organisation and observe
the organisational expenditure by which the decisions are to be taken care in the proper manner
and will affect the organisation and can control the cost easily. Dorchester company calculate the
overall cost and the expenses by which the operating cost is reduced and helps in calculating the
records of the additional expenses in the organisation so that it will not affect in the future and
decision is to b3e taken care in the proper manner.
Maintain the records of stock- The records are to be maintained in an proper manner so
the decisions are to be taken properly. It helps in recording the transaction and the purchase
made by the organisation is to be recorded properly. Dorchester company should record the
transactions properly in an organisation.
P2 Double Entry book keeping system of debits and credits to record sales and purchases
transactions in a general ledger
It is a system in which the entry are recorded and requires a matching so that the
transaction are recorded in the proper manner. There are two equal sides of the balance sheets in
the organisation so that the decision are to be taken in the proper manner and will not affect the
organisation. Theses double entry are called debit and credit where the transactions are recorded
properly and equally. The principals set up in the Dorchester has an legal entity and the
independent owners. Another principal is the accounting equations which means capital= Assets-
Liabilities. Third rule is that the transactions have the dual effect.

Ledgers:
Cash a/c
DR CR
Date Particulars . J
F
Amount Date Particulars J
F
Amount
04/03/
20
To capital a/c 30000 05/03/2
0
By rent a/c 1000
18/03/
20
To sales a/c 20000 06/3/20 By purchase a/c 10000
20/03/
20
To sales a/c 13000 07/03/2
0
By Prepaid
insurance policy a/c
1200
11/03/2
0
By Laundry fees a/c 200
15/03/2
0
By Telephone and
internet expense a/c
2220
15/03/2
0
By Water charges
a/c
950
16/03/2
0
By Wages and
salary a/c

31/03/2
0
By balance c/d 47430
63000 63000
Capital a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
31/03/2
0
To balance c/d 30000 04/03/2
0
By cash a/c 30000
30000 30000
Rent a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
05/03/2
0
To cash a/c 1000 31/03/2
0
By balance c/d 1000
1000 1000
Purchase/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
06/03/
20
To cash a/c 10000 31/03/2
0
By balance c/d 40000
06/03/
20
To vendor a/c 15000
09/03/
20
To WH Adams Ltd
a/c
15000
40000 40000
Prepaid insurance policy a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
07/03/
20
To cash 1200 31/03/2
0
By balance c/d 1200
1200 1200

WH Adams Ltd a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
31/03/
20
To balance c/d 15000 09/03/2
0
By purchase a/c 15000
15000 15000
Laundry fees a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
11/03/2
0
To cash a/c 200 31/03/2
0
By balance c/d 200
200 200
Telephone and internet expense a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
15/03/2
0
To cash a/c 2220 31/03/2
0
By balance c/d 2220
2220 2220
Water charges a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
15/03/
20
To cash a/c 950 31/03/2
0
By balance c/d 950
950 950
Wages and salary a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t

16/03/2
0
To cash a/c 1740 31/03/2
0
By balance c/d 1740
1740 1740
Sales a/c
DR CR
Date Particulars J
F
Amount Date Particulars J
F
Amoun
t
31/03/2
0
To balance c/d 33000 18/3/2
0
By cash a/c 20000
20/3/2
0
By cash a/c 13000
33000 33000
P3 Trial Balance applying the use of the balance off rule to complete the ledger
All the business accounts are listed in the Trial balance and are to be recorded in the
proper manner. The name is included in the ledger accounts so the decision is to be taken
properly in an organisation. Credit and the debit balance are there in the nominal account so the
decision are to be taken properly. These trial balance are prepared correctly so the actual
financial position of the company is calculated and the timely decision is taken by the company.
The overall position of the company is measured and evaluate the results properly.
Trial balance
Particulars Dr. Cr.
Cash a/c 47430
Rent a/c 1000
Capital a/c 30000
Prepaid insurance policy a/c 1200
Purchase a/c 40000
Suspense a/c
WH Adams ltd a/c 15000
Laundry a/c 200
Water charges a/c 950

Telephone and internet expense a/c 16740 2220
Wage and salary a/c 1740
Sales a/c 33000
Total 94740 94740
TASK 2
P4 Various stages of HR life cycle applied to specific hospitality job role and their importance
for retaining and developing talent
The HR life cycle is referred to as continuous process of unified HR activities in a
respective business firm. It includes transformation of various operational activities in the
workforce into HR strategy. In general meaning, this cycle is a journey of respective employee
of an organisation from their first appearance to the day of their termination period in the work
structure (Shulga and Busser, 2019). It includes recruitment, training and development and
various operational activities performed by an employee or employer till it's exits from an
organisation. There are different key stages of HR life cycle which are as follows with regards to
chosen organisation i.e. The Dorchester:
Recruitment and Selection: In this first stage, focuses on effective conduction of
recruitment and selection activities of the business firm. It helps in proper allocation of valuable
resources in given firm and also establishes effective coordination in respective operational
activities of the workforce. The management department of the chosen firm, considers this step
as the most crucial one as it ensures effectiveness in an organisation and promotes growth in it's
operational activities.
Induction: In this stage respective job roles and responsibilities are been assigned and a
clear vision towards companies objectives is been setted up. With regards to chosen organisation,
it's management defines clear objectives towards attainment of desired goals. A formal relations
are been built between employee and employer of the workforce and their key responsibilities
towards each others is been defined.
Planning and Development: After providing effective training structures to employees of
the business firm, this stages focuses on extraction of maximum productivity in it's operational
activities (Murphy and et. al., 2018). By proper allocation of resources of the firm that includes

right man for right job profile in an organisation, management is able to make effective
utilisation of firm's resources.
Retention: Working on the fact of huge resources of a firm are been invested in each
employee working in an organisation. It becomes very important for a sound business firm to
retain it's employees. In context to chosen organisation, higher authority provides various tools
and ensures better working environment in the workforce in order to retain employees with good
talent skills and knowledge back into the organisation.
Termination Phase: This stage is the inclusion of exercise of separation of respective
employees from the company. Understanding of reason why particular employee leaves an
organisation is a key part in HR life cycle.
Importance of HR life cycle for developing and retaining talent in an organisation
With context to respective company i.e. Dorchester, human resource department of the
firm maps out entire journey of employees and drag out their experience during the course of
employment in the company. It helps the business firm to retain skilled employees back in the
company which saves up to the cost of firm's recruitment process. By providing trending tools
and better working environment in a working place, it boosts up employees performance and
enables business firm to carry business operations with innovative approaches.
P5 Performance management plan and job role for applying techniques to resolve negative
behaviours and to overcome issues of staff retention
Performance management plan is term used in coordinating various managing, aligning
and coordinating employees in an efficient manner. To add with it helps company to attain it's
desired goals within the given time period (Rezaei and Beyerlein, 2018). As per analysation of
the chosen company, it is facing problems of retaining and increased rates of employee turnover
ratio. Due to this negative factor, it results in overall decline organisational performance as well
as net revenue of the work structure (Pietarinen, Pyhältö and Soini, 2017). For this purpose
performance management plan have to develop appropriate strategies keeping in mind
effectiveness of operations in a business organisation. This process involves several steps:
Plan: This is the first step of performance management plan which assist workforce for
attainment of respective objectives in given time framework. For smooth conduction of
operational activities in a business firm effective planning is required for ensuring growth of an

organisation. The management department of Dorchester develops effective plans that helps
company to tackle with it's dynamic environment.
Monitor: It is a duty of managers of respective firm to keep regular check on daily
operational activities of business firm. It ensures developing of suitable strategies and plans in
order to retain employees and helps to overcome problem of declining turnover rate. In relation
to chosen organisation, it's HR management adopts employee retention techniques such as
altering working conditions, rendering proper training structures, resolving issues of employees
and many more.
Review: In this last stage of performance management plan, wherein performances of
every employee is been monitored and kept checked by higher departments of business firm
(Wang and et. al., 2020). After doing appropriate analysation they takes required steps and
ensures better productivity of organisation for completion of it's pre decided goals and
objectives.
TASK 3
P6 Specific legislation that a hospitality organisation has to comply and adhere
All the activities of a business firm in order to proceed effectively in long term should
comply with respective regulations and laws of respective nation government bodies. The
management of Dorchester follows all laws being enforced by government in given market area.
They follows all rules and regulation being imposed by the government that helps firm to
conduct various business activities effectively and also builds up good brand image of companies
products as well as services amongst their customers (Van Waeyenberg and et. al., 2017). Some
basic laws that is been followed up by company are: Health and safety act:- It considers health, wealth and safety of person at work. It
becomes foremost responsibility of managers of the firm to keep regular check ion
quality and safety of products being delivered to their valuable customers (Kim and et.
al., 2020). High authorities of Dorchester monitors quality of products and services been
delivered to their customers in hotels and also helps in maintaining respective living
standards of companies customers. Liquor control act:- This act speaks about keeping a controlled check on supply of
liquor for consumption to public (Ariza-Montes and et. al., 2017). In regards to chosen

organisation, it's management ensures companies workings within government decided
acts and makes it sure that it is not broken in any circumstances.
 Food act:- This act ensures delivering up of fresh and safe food as well as it's
preparation in safe and hygienic conditions for final consumption. In regards to chosen
company, it's management highly focuses on offering good quality products and
services at reasonable prices to their valuable customers. It helps in better brand
building of companies brand and increases firm's market presence.
P7 Company Employment and contract law has a potential impact upon business decision
making in the hospitality industry
In order for smooth conduction of respective operations of the business firm it's
management has to comply with various laws imposed by government. Planning structure of
Dorchester adopts appropriate planning structures that collaborates with respective government
polices for assuring effective decision-making in planning structure of the business firm. Some
laws are been stated under: Company Law:- For taking effective decision making company law is important. This
law focuses on achievement of desired companies goals and objectives effectively. This
law includes conduction of respective business activities as per rules and regulation. It
helps a business firm to take effective decisions and ensures better working of company
in long time. Contract law:- Contract is an agreement between two or more person, binding their
responsibilities between each other as enforced by law. It helps management of
respective company to extract effective work with companies employees and enhances
effectiveness of business firm for attainment of desired business objectives (Kubica and
et. al., 2019). With addition to this it helps company in increasing transparency of work
in an organisation and motivates various investors to invest in company shares.
 Employment law:- It is the law that relates to rules and regulation between employee and
employer in an organisation. Dorchester maintain and manage good relation between it's
employee and employers in order to effectively achievement of goals and objectives of
the company.

TASK 4
P8 Interrelation between various functional roles in the hospitality sector
Various departments within the hospitality sector interrelate with each other. This is
mentioned below:
 Food and drinks division: This division is responsible for providing consumers
refreshments services such as food items from various cuisines. In context of Dorchester,
this division gives the consumers food items according to their preferences and medical
history with certain ingredients which helps the firm secure regular revisits from
consumers.
 Sales and marketing division: This division constructs various plans and schemes to
advertise their hotel and build brand image which attracts maximum amount of
consumers (Zangiacomi and et. al., 2020). This division requires financial investment
from the finance department to conduct various activities.
 HR division: This division helps the firm build talented workforce by selecting,
recruiting and training employees (Kim and et. al., 2018). The division also implements
various policies which create positive workplace environment and increase employee
satisfaction to build loyal workforce.
P9 Provide various approaches to coordination, communication and monitoring for particular
division in hospitality enterprise to strengthen value chain
Various methods of communication, coordination and monitoring used by The
Dorchester hotel to strengthen the value chain are provided below:
 Communication: The respective firm uses various communication practices such as
group discussions and presentations allow employees to present their ideas creatively
which helps in building flawless plans for improving various business operations.
 Coordination: The respective firms has implemented various methods which build
coordination between employees such as team building exercises and group projects
which lowers disputes and creates positive working environment.

 Monitoring : The respective firm conducts regular meetings to gain information and
feedbacks from employees regarding various policies and training obstacles to monitor
employee growth and performance (Posthuma and Rossi, 2017).

CONCLUSION
From the above report it is been analysed that hospitality industry have a good
contribution in overall economic development of the nation. This sector mainly emphasizes on
providing with quality of life to various people. It enhances living standards of people by
delivering them with quality of products with services and also ensures safety of consumption of
food. The workforce uses different methods to communicate and interact in order to effective
conduction of business activities and also provides clear vision towards organisational goals for
enhancing growth of the business organisation.

REFERENCES
Books and journals
Bartolacci, F., Caputo, A. and Soverchia, M., 2020. Sustainability and financial performance of
small and medium sized enterprises: A bibliometric and systematic literature
review. Business Strategy and the Environment, 29(3), pp.1297-1309.
Bush, T., Bell, L. and Middlewood, D. eds., 2019. Principles of educational leadership &
management. Sage.
Shulga, L. V. and Busser, J. A., 2019. Talent management meta review: a validity network
schema approach. International Journal of Contemporary Hospitality Management.
Murphy and et. al., 2018. A review of high performance work practices (HPWPs) literature and
recommendations for future research in the hospitality industry. International Journal of
Contemporary Hospitality Management.
Rezaei, F. and Beyerlein, M., 2018. Talent development: A systematic literature review of
empirical studies. European Journal of Training and Development.
Wang, C. and et. al., 2020. Effects of professional identity on turnover intention in China's hotel
employees: The mediating role of employee engagement and job satisfaction. Journal of
Hospitality and Tourism Management, 45, pp.10-22.
Van Waeyenberg, T. and et. al., 2017. The relationship between employee performance
management and civil servants’ turnover intentions: a test of the mediating roles of
system satisfaction and affective commitment. Public Management Review, 19(6),
pp.747-764.
Ariza-Montes, A. and et. al., 2017. Employee responsibility and basic human values in the
hospitality sector. International Journal of Hospitality Management, 62, pp.78-87.
Kubica, A. and et. al., 2019. Assessment of adherence to medication in patients after myocardial
infarction treated with percutaneous coronary intervention. Is there a place for newself-
reported questionnaires. Current medical research and opinion, 35(2), pp.341-349.
Kim, H.L. and et. al., 2018. The effects of corporate social responsibility (CSR) on employee
well-being in the hospitality industry. International Journal of Contemporary Hospitality
Management.
Kim, H. and et. al., 2020. Why hotel employees care about Corporate Social Responsibility
(CSR): Using need satisfaction theory. International Journal of Hospitality
Management. 87. p.102505.
Pietarinen, J., Pyhältö, K. and Soini, T., 2017. Large-scale curriculum reform in Finland–
exploring the interrelation between implementation strategy, the function of the reform,
and curriculum coherence. The Curriculum Journal, 28(1), pp.22-40.
Posthuma, A. and Rossi, A., 2017. Coordinated governance in global value chains: supranational
dynamics and the role of the International Labour Organization. New Political
Economy. 22(2). pp.186-202.
Zangiacomi, A. and et. al., 2020. Moving towards digitalization: a multiple case study in
manufacturing. Production Planning & Control.