Principles of Monitoring Financial Performance in Hospitality Industry

This document discusses the principles of monitoring financial performance in the hospitality industry. It covers topics such as inventory records, time management, and managing staff, food, and labor costs. It also explains the use of double entry bookkeeping system and trial balance in recording transactions.

HOSPITALITY
BUSINESS
TOOLKIT

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1 ...........................................................................................................................................4
P1 Determine the principles of monitoring financial performance........................................4
P2 Use double entry book system to record transaction in ledger.........................................5
P3 Prepare a trial balance by using balance off rule to complete the ledger..........................6
TASK 2............................................................................................................................................7
P4 Several stages of HR life cycle within the particular hospitality job role and their
importance towards developing talent....................................................................................7
P5 Prepare a performance management plan in relevance with hospitality..........................8
TASK 3............................................................................................................................................9
P6 Explain various types of legislation that hospitality industry adopt.................................9
P7 Evaluate how contract and company law affect decision making..................................10
TASK 4..........................................................................................................................................11
P8 Briefly describe different role functions of hospitality sector.........................................11
P9 Explain various types of coordination method, communication method in relevance with
department of hospitality sector...........................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
BOOKS &JOURNAL :..................................................................................................................13

INTRODUCTION
Hospitality play important role in service industry and which maintained by organisation
in effective manner. Hospitality refers to relationship between guest and service provider. To
maintain and manage positive environment service is main source as well as resource in
hospitality industry. Services heterogeneous in nature which are performed and consumed at
different levels, needs and requirements. Organisation in service industry perform numerous
types of functions and operations which are performed in effective manner. Club Quarter hotel,
headquartered in London, UK is leading and trending service industry and is developing at rapid
level. Hotel is expanding their business activities at wider and broader level. Hospitality is
focused and considered as important part of business because customers behaviour and goodwill
of firm depends upon quality of service. High quality of service and well organised staff is
present in hotel which increases its creditability in market. This report comprises of principles of
monitoring financial performance, using double entry and book keeping system, trial balance and
ledger, life cycle of HR and importance of retaining and developing talent, preparing
performance management plan in relation with hospitality,legislation and laws that service
industry adopts and concept and impact of company, employment and contract law in decision
making.
TASK 1
P1 Determine the principles of monitoring financial performance
Principles are set of guidelines which assists the business to achieve goals and objective
in proper manner. It is important for every organisation to adopts and follow principles which are
stated within a firm. In finance, principles are essential so that errors and conflicts are minimised
and process or procedures are undertaken in systematic manner (Pieroni, 2019).Numerous
principles in finance are-
 Inventory Records- In organisation, ample number of transactions and huge cost is
involved such purchasing raw materials, machines, equipments, tools, and many more.
Entities play different role in business and perform various activities which so, it is
important to make records of inventory so that a proper evaluation is done time to time
and stock status is determined (Hughes,2019). This, assists business to analyse their
needs and requirements and make firm prepare for future prospectives. In relation with

Club Quarter hotel, they uses inventory record and maintain proper records of process
which helps them in comparison between utilised resources and un- utilised resources.
 Time management- Time management is important to be considered in financial
performance. Following principle of proper time management leads to analysing
financial performance within a specified period of time. It also assists in determining the
overall growth and development of business. In relation with Club Quarter Hotel, they
use principle of time management in effective manner and provide services to their
customers within a period of time so that customers and guest does not have to wait to
use or consume the service. This make a positive relationship between both firm as well
as customers (Shichkov, 2019).
 Staff, food & labour cost- To monitor and mange the financial performance of business
it is important to have proper control over labour, food and staff cost in firm. These costs
fluctuate the financial performance of business and affect the services provided by the
firm. Mostly food costs are average in service industry depending upon the taste, staff
costs are high because training and retraining is involved in the cost whereas labour cost
is average and high depending upon the location and requirement. Club Quarter Hotel
manges these costs in appropriate manner so that business activities run smoothly and
continuously. Bargaining power is involved in all these cost which helps to manage and
maintain financial performance of business (Moreira, 2019).
P2 Use double entry book system to record transaction in ledger
Accounting is broader and wider concept which is to considered as crucial part of
business. Book keeping and double entry both are important in accounting for proper running of
functions and operations (Uddin,2019). Both theses double entry and book keeping are states
that it is crucial for every firm to record every transaction in business and these two system
depicts that debit amount is to be equal to credit amount so that result is obtained in proper
manner. Principles of both book keeping and double entry are mentioned below-
 Principle of revenue- This principle of book keeping states that revenue generated in
business or on spot, it is recorded in book-keeping in systematic manner. This principles
is helpful because a proper evaluation is done so that revenue is distributed equally in
business. In relation with Club Quarter Hotel they follow this principle with skilled and
trusted employees.

 Principle of understanding different accounts- In double system, there are different
types of accounts such as real, personal and nominal which are considered in accounting
and all these accounts operate with different rules of accounting. So, this principle helps
the firm to be aware about all the rules of accounting. In relation with Club Quarter hotel
their accounting concept is strong and expertise of finance team assists business to handle
such situations (Daher, 2019).
 Principle of recording expenses- In book keeping this principle depicts that organisation
should record and keep proper evaluation of expenses so that firm financial condition is
maintained and managed in proper manner. Recording of expense in firm assists business
to track and monitor the unused finance or capital. In relation with Club Quarter Hotel,
they are active towards their financial performance and which helps them in performing
their activities in effective manner (Polachek, 2019).
After understanding above principles it is concluded that to manage and monitor
performance management of business it is essential for organisation to follow principles related
with accounting concept. These principle act as roadmap and guides the business to carry out the
activities in proper manner.
P3 Prepare a trial balance by using balance off rule to complete the ledger
Trial Balance and ledger are interlinked with each other in accounting. Trial balance in
accounting is a type of presentation or documentation in which ledger accounts are settled in
proper manner. With helps of trial balance, audit is prepared in effective manner. Use of trial
balance also assists firm to analyse and evaluate proper creditability of business so that conflicts
and errors are minimised. Structure of trial balance is given below-

Balance Off rule- Balance Off rule states that when accounting year is complete in
firms, accounts are closed and some of the accounts are shifted to next year so that a proper
evaluation of all the accounts are done in effective manner. This Balance off rule helps, the
organisation to properly maintain the data as well as information related to journal, ledger and
trial balance. In relation with Club Quarter hotel, they uses this method so that accounting and
financing processes are carried out in appropriate manner (Sulphey,2020).
It can be stated that trial balance and balance off rule both are crucial in organisation to
carry-out proper performance and management. These approaches helps the firm to track and
monitor the activities in effective manner (Middleton, 2020).
TASK 2
P4 Several stages of HR life cycle within the particular hospitality job role and their importance
towards developing talent.
Through observing large number of business areas and functions, HR manager plays
significant role as it consist effective life cycle by which they can manage employees relation
within the firm. In regards with Club Quarter hotel, HR plays crucial role by having effective life
cycle. There are few stages of HR life cycle, those are as follows:
Recruitment and selection: According to this step HR manager has responsibility to
recruit and select talented employees in order to increase firm's productivity in an effective

manner. In regards with Club Quarter hotel human resource manager always required to focus on
accomplishment of job profiles by selecting employees in order to satisfying people needs and
wants in a perfect way. On the other side, they also needed to have effective training and
development skills for employees so that they can provide better ways for learning new concepts.
Additionally, they also face so many issues, for this they are required to recruit such kind of
employees who can manage firm's fulfil within the short period of time. Therefore, it is most
important aspect for business as well as every firm to achieve their desired goals.
On boarding and orientation: According to this process, human resource manager will
explains different types of rules and policies in order to hire new employees for accomplish their
mission, vision and values. In regards with Club Quarter hotel, while conducting this function
within firm HR manager needed to develop best ways to attend employees along with retain their
skills or abilities in a proper way. With the help of this employees are able to work in a proper
way. Due to this respective hotel is able to sustain at marketplace for long period of time.
Exit and transition: In this step, Club Quarter hotel able to conduct exit interviews for
their employees in order to overcome their issues while they face during the interview process.
Therefore, HR manager of this firm use such kind of tools by which they can retain best
employees talent and able to gain proper achievement of goals. Along with it helps firm to
maintain good relations with employees that develops better methods for employees by which
they can achieve goals in certain period of time.
P5 Prepare a performance management plan in relevance with hospitality
Performance management plan refers to process in which coordinating, managing, team
work are analysed in proper manner so that goals as well objectives are achieved. Performance
and plan both are essential in business which are to be considered in effective way. In hospitality,
a plan helps the business to prepare and clarify the objectives which are to be achieved.
Performance management assists entities to analyse and determine the performance level of
business and creditability of organisation in financial segments. So, it is necessary to develop and
prepare a performance management plan so that a proper decision making is implemented in
enterprises. So, plan is prepared by HR to develop concept of retention of personnel which is
described below-
 Plan- Plan is important in analysing value of employee as individual and their
requirements in the organisation. Implementation of plan assists the organisation to

develop effective strategies and tactics. HR of company helps the organisation to deal
with negative and positive behaviour as well as outcomes of personnel. In relation with
Club Quarter hotel, they prepare plan for management and employees so that peace in
environment is established. Also, they use various techniques as well as approaches so
that healthy relationship is developed amongst the members. To maintain stability in
firm they uses, activities, training etc. so that negativity is reduced and removed.
(Brilmayer,2019).
 Monitor- It is important for firm to track and monitor the activities and staff behaviour
and performance. To successfully maintain the stability is crucial to have proper
analysis ad control over the management. So, HR manager of employees prepare online
management system and a power is assigned to some people in the firm and in different
departmental levels so that they keeps proper records of management as well as staff.
Negative and positive affects in organisation are important to determine so that staff
feedback and preferences are considered in effective manner. In relation Club Quarter
hotel, they monitor management as well as employee activities by checking working
progress monthly and weekly (Gerhart, 2019).
 Review- Further comes the review stage in performance management level in which
staff and firm performance is reviewed by superiors of particular department. This stage
is crucial because it helps the business to evaluate overall performance of both business
as well as personnel. In context to Club Quarter Hotel, they uses this aspect in
appropriate manner by determining the time period and task achieved by each employee
within specified period of time.
TASK 3
P6 Explain various types of legislation that hospitality industry adopt
Legislations are important for every organisation and society. They are essential because
they reflect the rights and responsibilities of particular individual which they should perform in
appropriate manner. Government uses legislations as tool so that entities and society are well
aware about laws which are applied and govern by government. (Martínez-Martínez, 2019).They
encourages the people in society in positive manner and at broad level. With help of legislation,
control is possible in society and business. It guides the people as well as acknowledge them

about right information and laws which are beneficial to them. Thus, legislation play important
role across the globe. So, there are several legislation laws which is to be considered and are
mentioned below-
 Employment act, 2002- Employment act 2002 is enhance version of act 1996. In this act
new and updated rules and regulations in context to employee are introduced.
Allowance, bonus, leaves contains new commitments and rules in employment act 2002.
Also, discrimination amongst the employees in this act is stated with strict rules. In
context to Club Quarter hotel, HR manager of hotel maintains consider this act in
effective manner (Njoku, 2019).
 Food Act 1990- Another legislation which is governed by law is food act (1990). In this
act, it states that quality of food, naturally used substance should be used by service
industry or hotel industry so that health of people remain safe. This act assist people to
be health conscious and to eat quality of food. In relation with Club Quarter hotel they
maintain their quality of food and management provide service to customers by wearing
proper uniform and gloves in hand. Also, staff of hotel maintain cleanliness all around
and preparation of food is managed and controlled by skilled chefs which take care of all
the amenities and process (Pieroni, 2019).
 Liquor control Act 2003- Another form of legislation act is liquor control act 2003
which states that alcohol is to be prohibited and restricted worldwide. Alcohol affects the
health and people suffer from diseases if consumed at higher level. So, retailers,
distributors or organisation who are providing alcohol in society should be punished or
business should be restricted. In relation with Club Quarter Hotel, they serves alcohol
with license and also they do not allow teenagers on any occasions to consume or drink
alcohol (Hughes,2019).
P7 Evaluate how contract and company law affect decision making
Government has always affected the firm and business at broad level. In service industry,
it is essential for food service provider, restaurant, cafe to follow rules and regulations when
providing such amenities to public. In relation with Club Quarter hotel, their decision making
process is analysed after a brief market research. Laws always affect the business growth and
progress. Their are various laws which affect the business productivity which are mentioned
below-

 Company Law- This law states that all the necessary information and resources should
be provided to the companies for their business. In this law, rules and regulations are
described which are important for companies to follow in their business. In context to
Club Quarter hotel, they have goodwill in market due to their rules and regulations in the
hotel. They strictly follow these rules and regulations which are stated in company law.
Decision making in this law is affected because all the decisions are taken in firm by
considering the company law (Shichkov, 2019).
 Contract Law- In contract law, a contract in governed and enforced by law and
government. Contract law is important for business because it act as a documentation
proof between two parties for agreed motive. In relation with Club Quarter hotel, they
always present a contract when such situations arises in business. This helps them in
future and maintains a record of each party. Decision making in this affects the business
decisions at wider level. So, contract law in Club Quarter hotel is maintained and
managed by their professional lawyers(Moreira, 2019) .
TASK 4
P8 Briefly describe different role functions of hospitality sector
There are different roles which are performed by hospitality sector which are mentioned
below-
 Top level- In top level, different roles are performed by General manager and superiors.
This level states that power and authority of power lies within the hands of senior people
in the firm (Uddin,2019).
 Middle level- In this level, people which are included are assistant manger, executes chef
and salesman etc. In this aspect, power is enforced to these people to achieve the goals
and objectives within a time period.
 Low Level- Further comes the low level in which cook, cleaners, host are involved. In
this low level, power comes from the middle level and is maintained and managed by
people who are residing in the middle level (Daher, 2019).

P9 Explain various types of coordination method, communication method in relevance with
department of hospitality sector
 Text Messages- These are fastest and cheapest way of communicating a message.
Department of service sector can use this service in effective manner an to provide
essential credentials to the members. In relation with Club Quarter hotel staff and
members uses teat messages whenever there is a need of any amenities.
 E-mails- Another method is email which are intangible services used by communicating
or coordinating within the firm. E-mail can be used both in formal and informal way
depending upon the need and requirement (Polachek, 2019).
Thus, after analysing communicating and coordinating method it can be stated that service or
hospitality industry should use effective source of communication as well as coordinating
methods so that time and cost is saved of the firm.
CONCLUSION
After a brief analysis of above report it is concluded that organisation is time consuming
concept and requires a business toolkit to achieve goals and objectives in proper manner.
Performance of financial management is necessary to determine because they helps the business
to analyse their creditability in the market. Principles are important in firm because they guides
enterprise to examine what is to followed or not. Performance management plan is essential to
analyse the overall progress of organisation and business. Legislation also play important role in
business. Every firm follows legislations so that relationship is maintained. Decision making is
business is necessary which is affected by different laws such as company and contract law. In
hospitality, different people perform different functions according ton roles assigned to them. Inn
business it is important to focus on communicating and coordinating methods such as text
messages, emails etc. Thus, a business toolkit helps in overall growth and development.

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