Importance of Legislation in Business

This article discusses the importance of legislation in a business situation and its different types. It highlights how legislation helps in regulating and protecting public health and safety. The relevance of legislation in The Ritz London is also explored.

Hospitality Business
Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Influence the principles of monitoring financial performance..........................................3
P2 Usage of double entry book system to record transaction in ledger.................................4
P3 Prepare a trial balance by using balance off rule to complete the ledger..........................5
TASK 2..........................................................................................................................................11
TASK 3..........................................................................................................................................11
P6 Describe importance of legislation and its types in relevance with business situation...11
P7 Explain the decision making and how it is affected by company and contract law........12
TASK 4..........................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Hospitality industry is wide and involve many sectors such as Food and beverages.
Accommodation, recreation, entertainment and many more. The services include in hospitality
industry is event planning, lodging, transportation and many more (Singh, 2015). The present
report is based on The Ritz London, which is a 5 star hotel and situated in Piccadilly, London. It
was established in the year 1906 by Ellerman Group. It has 3 restaurants, 110 rooms and 23
suites which is designed in a unique manner. The report covers various aspects of financial
management that assist in carrying out functions in smooth manner. Along with this, Human
Resource life cycle is discuss in order to gain an insight regarding ongoing activities of hotel.
Moreover, performance management plan is described and the various method of communication
is discuss in detail in the report.
TASK 1
P1 Influence the principles of monitoring financial performance
The principles are a set of plans that aid a business to attain predefined goals and
objectives in a right manner. It is essential for each organisation that acquires and directs rules
that are indicated within an industry. In finance department the accounting principles plays a
very essential role so that the problems and disputes are decreases that are taken into
consideration within an appropriate manner. The few principles are categorised as follows:
 Inventory Records: in an organisation. The large amount of transactions and vast cost
which is included such as buying of raw materials, machines, tools, equipment’s and so
on. Various business entities that plays a various role in business activities that are
performed to form record of stocks in such a way that values in proper time manner and
also inventories are ascertained through recording (Nelson, 2018). This also helps a
business to examine their needs and requirements to form a business to ready for future
potential. In context to The Ritz London that uses the recording of stock and also keep
appropriate records of procedure that assist in relation among utilised and non-utilised
resources.
 Time management: Time management is very essential in performing financial
transactions. The favourable principle of right time that lead to examine the level of
performance within a particular period of time. Further, it considers as the analysing the

total growth and development of an organisation. With reference to The Ritz London it
utilise the principle of time management in an efficient and effective manner that gives
services to its customers within specified a period of time in such a way to that the
customers do not have to stay for providing the services. This results in the good
relationship among business and its customers.
 Staff, food and labour cost: While display and controlled the level of performance of a
business that it is very crucial to manage the cost of food, labour and members of a team
in an industry. These costs moves according to the financial performance that lead to
impact on the services which are given by an organisation. In addition to this, the food
costs are mostly depends upon the taste and preferences of team members which are high
because training are included in this cost as well as labour cost is depends according to
the needs and location of a company. In context to The Ritz London, this hotel manages
the costs for the functions of a business in an suitable manner that carries various actions
in a continuous manner. This lead to involve all the costs that assist to control and keep
the performance of a finance in a business.
P2 Usage of double entry book system to record transaction in ledger
Accounting is a broad and wide conception that consists of important part of a business
industry. A book keeping and double entry system are very crucial in functioning and operational
of accounting. In assistance to this, both the entries like book keeping and double entry plays a
very important role for recording each and every transaction in a business. Further, these two
methods interpret the debit account is balanced to credit amount in such a way the outcomes is
acquired in an appropriate manner. These are described as follows:
 Principle of revenue: This is the principle which indicates the income which is created
in a business that is recorded in book -keeping in an ordered manner. This would assist
because a proper assessment is finished when the incomes are divided balanced in a
business (Lub, 2016). In assistance to The Ritz London, this company could precedes
the principle which includes skilled and trustworthy employees.
1. Principle of understanding different accounts: There are various forms of accounts
which are included such as real, personal and nominal accounts that consist of
accounting transactions that could generate several concepts of accounting. Hence, this

could assist a business to conscious of various concepts which is sharp and skilfulness of
finance department that manage the problems faced by the accounts department.
 Principle of recording expenses: This principle anticipates an organisation that keep
records and maintain proper assessment of expenses in financial situations that is
controlled in an appropriate manner. The recordings of expenses that aid a business to
course and display the capital which is not used. In context to The Ritz London, this
could help in performing various activities and functions in an effective and efficient
manner.
The analysis of above principles it considers as to succeed and display the management of
performance which is very important for an organisation to direct the concepts which is related to
the accounting departments.
P3 Prepare a trial balance by using balance off rule to complete the ledger
A leader and Trial balance which are interconnected with each another in an accounting.
It is form of representing a ledger accounts that are accomplished in an appropriate manner. In
addition to this, audit is being prepared in a trial balance in an effective and efficient manner
(Pirani and Arafat, 2016). While using trial balance this aid to examine the correct dependability
of a business in such a way that it could decreases the disputes and mistakes that are occurred
within the accountability. Structure of trial balance is described as underneath:
Journal entries for Dorchester Hotel for the month ending March, 2020
Date Particulars Debit Credit
March, 1 Purchase a/c
To Onur's kitchen a/c
6001
6001
March, 1 Purchase a/c
To Deniz's a/c
28652
28652
March, 3 Beverage a/c
To Sales a/c
12203
11203
March, 3 Food a/c
To Sales a/c
1924
1924

March, 6 Onur's kitchen a/c
To Bank a/c
6001
6001
March, 10 Beverage a/c
To Sales a/c
10966
10966
March, 10 Food a/c
To Sales a/c
2687
2687
March, 14 Bank a/c
To Sales a/c
3008
3008
March, 17 Beverage a/c
To Sales a/c
11710
11710
March, 17 Food a/c
To Sales a/c
1611
1611
March, 17 Deniz's a/c
To Bank a/c
28652
28652
March, 22 Purchase a/c
To Onur a/c
8013
8013
March, 24 Beverage a/c
To Sales a/c
10614
10614
March, 24 Food a/c
To Sales a/c
1905
1905
Ledger accounts of Dorchester Hotel for March, 2020
Purchase a/c
Date Particular Amount Date Particular Amount
March, 1
To Onur's
kitchen 6001 March, 31 By Balance c/d 34653
March, 1 To Deniz 28652

Total 34653 34653
Onur's Kitchen a/c
Date Particular Amount Date Particular Amount
March, 6 To Bank 6001 March, 1 By Purchase 6001
Total 6001 Total 6001
Deniz a/c
Date Particular Amount Date Particular Amount
March, 14 To Seling 3008 March, 1 By Purchase 28652
March, 17 To Bank 28652 March, 31 By Balance c/d 3008
Total 31660 Total 31660
Bank a/c
Date Particular Amount Date Particular Amount
March, 6
By Onur's
kitchen 6001
March, 31 To balance b/d 34553 March, 17 By Deniz 28652
Total 34553 Total 34553
Beverages a/c
Date Particulars £ Date Particulars £

March, 3 To sales 12203 March, 28 By balance c/f 45493
March, 10 To sales 10966
March, 22 To sales 10614
March, 17 To sales 11710
Total 45493 Total 45493
Sales a/c
Date Particulars £ Date Particulars £
March, 3 By Beverage 12203
March, 3 By Food 1924
March, 10 By Beverage 10996
March, 10 By Food 2687
March, 17 By Food 1611
March, 17 By Beverage 11710
March, 31
To balance
c/f 53650 March, 22 By Beverage 10614
March, 22 By Food 1905
Total 53650 Total 53650
Food Account
Date Particulars £ Date Particulars £
March, 3 To sales 1924
March, 10 To sales 2687 March, 31 By balance c/f 16140
March, 24 To sales 1905

March, 17 To sales 1611
March, 22 To Onur's 8013
Total 16140 Total 16140
Seling Account
Date Particulars £ Date Particulars £
March,
14 By Bank 3008
March, 31 To balance c/f 3008
Total 3008 Total 3008
Trial balance of Dorchester Hotel for the accounting period ending March, 2020
Particulars Debit (In £) Credit (In £)
Purchase a/c 34653
Deniz a/c 3008
Bank a/c - 34553
Beverage a/c 45493
Sales a/c 53650
Food a/c 16140
Selling a/c 3008
Onur's kitchen a/c 8083
TOTAL 99294 99294

Balance Off rule: Balance off rule indicates that the accounting year in which the accounts are
disclosed and transferred to the next upcoming year for the proper valuation of all the accounts
which is done in an effective and efficient manner. This also assist an organisation to keep the
data which is connected to journal, ledger and trial balance (Legrand, Chen and Sloan, 2013).
With reference to The Ritz London, this company uses this concept for accounting and financial
procedure which is transferred in an suitable manner.
This could be indicated as the trial balance and balance off rule are very important for an
organisation to carry out level of performance and management. This could results in leading the
activities in an effective and efficient manner.

TASK 2
(Covered in PPT)
TASK 3
P6 Describe importance of legislation and its types in relevance with business situation
Government play important role in laws and legislation. Because all the rules and
regulations are governed by government and are strictly followed by companies. These are
essential which are adopted by everyone to secure the people rights and interest. In service
industry, legislation are needed to regulate as well as protect public health and safety. There are
ample number of legislations which are important for the society and depicts the guidelines so
that business activities are carried out by those criteria. In relation with The Ritz London, they
follow all the government rules and regulation strictly.
Food act 1990- Food act is a act in which rules and regulations related to food and
beverages are stated and defined. According to this law, it states that there every citizen has a
right to get the quality of food from the producer. For customers, prices doesn't matter or affect
their behaviour as compared to quality. In context to The Ritz London, they provide customers
with quality of food and which results in positive feedback from the clients as well as customers.
Liquor Control Act 2003- According to this law, liquor and alcohol is to be prohibited
and restricted in the society so that environment stay healthy and fit. Organisation who are
providing liquor should have license of the business so that if alcohol is being consumed than in
limited way. In relation with The Ritz London, they provide liquor as well as alcohol in the hotel
but they have a policy of age limit which is people who are under 20 are not allowed to consume
alcohol.
Health and safety act 1974- In today's world, people are taking health as crucial part of
life. According to this law, it states that people and employee who are working at workplace
should be provided with health and safety policies. It is most important law in legislation because
attitude and behaviour of employees depends upon this act. The Ritz London, provide proper
health and safety amenities to their staff and customers too. This increases goodwill of the firm at
broad level.

After a brief analysis of above matter it is stated that legislation are essential for society
and organisation. Legislations as well as laws are managed and controlled by government. This,
helps to maintain a uniformity in the society and amongst the people. So, it is responsibility of
the firm to ensure that management as well as employees fulfil their role and with ethics and
under laws which are govern by government.
P7 Explain the decision making and how it is affected by company and contract law
Decision making play important role in business and important factors and elements
should be considered so that firm can carry-out their activities in proper manner. There are many
laws which affect the decision making at wide level such as company and contract law. Laws
affect the decision making because government are dynamic in nature and has broad impact on
decision making process of firm. In context to The Ritz London, they change their hotel policies
and procedures time to time to acquire more customers. So, this require effective decision
making and is affected by government at wider level.
Impact of company and contract law is described below-
 Company law- Company law is a law in which rules and regulations, related to business
and corporates are defined under this law. In this, norms as well as guidelines are
explained which drives the business and management. In context to The Ritz London,
they work with ethics and follow all the company law guidelines which are important for
business and can affect the firm productivity at broader level. These companies law are
essential for business because organisation without these laws cannot perform their
functions and operations in proper manner.
 Contract law- Another law which affect the decision making is contract law in which
contract is enforced by the government (Kysilka and Csaba, 2013). In contract law,
agreement act as document and in which certain rules and regulation are defined and
which are mutually agreed by parties who are using the contract. In relation with The Ritz
London, they follow the contract law at appropriate manner. When any new or small
hotel comes with motive of agreement with The Ritz London, they prepare their contract
of agreement by properly considering contract law.
In organisation, decision making is necessary and important because in business all the
outcomes are dependent on firm decision. So, it is crucial for entities to be registered and follow

all the laws as well as legislations in proper manner. This increases firm goodwill and
creditability at both national as well international level.
TASK 4
(COVERED IN PPT)
CONCLUSION
From the above analysis of report, it can be concluded as the organisation needed a
business toolkit for accomplishing its goals and objectives in an appropriate manner. The
management of finance department is very essential for regulating a business to examine their
acceptability into the market. The level of performance is planning to study the total procession
of an organisation. Each organisation directs the legislations that a relationship is controlled.
Further, decision-making of a business is very important that lead to impact of various laws.
Various members of an organisation could direct on communicating the actions which bare
included such as E-mails, messages etc. Hence, a business toolkit also assist an organisation in
total growth and development.

REFERENCES
Books and Journals
Kysilka, D. and Csaba, N., 2013. Employee turnover in the hospitality industry. Anale. Seria
Stiinte Economice. Timisoara. 19. p.377.
Legrand, W., Chen, J. S. and Sloan, P., 2013. Sustainability in the Hospitality Industry 2nd Ed:
Principles of Sustainable Operations. Routledge.
Lub, X. D. and et. al., 2016. The future of hotels: The Lifestyle Hub. A design-thinking approach
for developing future hospitality concepts. Journal of Vacation Marketing. 22(3).
pp.249-264.
Ma, E., Cheng, M. and Hsiao, A., 2018. Sentiment analysis–a review and agenda for future
research in hospitality contexts. International Journal of Contemporary Hospitality
Management.
Nelson, G. S., 2018. The analytics lifecycle toolkit: A practical guide for an effective analytics
capability. John Wiley & Sons.
Nickson, D., 2013. Human resource management for hospitality, tourism and events. Routledge.
Pirani, S. I. and Arafat, H. A., 2014. Solid waste management in the hospitality industry: A
review. Journal of environmental management. 146. pp.320-336.
Pirani, S. I. and Arafat, H. A., 2016. Reduction of food waste generation in the hospitality
industry. Journal of Cleaner Production. 132. pp.129-145.
Singh, R., 2015. Empirical examination of the impact of total quality services on hospitality
industry business. Journal of Quality Assurance in Hospitality & Tourism. 16(4). pp.389-413.