Principles of Monitoring and Managing Financial Performance in Hospitality Business

This document discusses the principles of monitoring and managing financial performance in the hospitality business. It covers topics such as the double entry bookkeeping system, trial balance, stages of the HR life cycle, development of a performance management plan, specific laws related to the hospital sector, and their potential impacts on decision making. The document provides valuable insights for students studying hospitality business.

Hospitality Business
Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
P1 Principles of monitoring and managing financial performance.............................................3
P2 Double entry bookkeeping system that used in recoding sales and purchases.......................4
P3 Trial balance by applying balance of rule ..............................................................................4
Task 2...............................................................................................................................................6
P4 Different stages of HR life cycle ...........................................................................................6
P5 Development of performance management plan for specific hospital industry.....................7
Task 3...............................................................................................................................................9
P6 Specific laws are related to hospital sector.............................................................................9
P7 Examples that illustrates employment and contract laws has potential impacts to make
decisions.....................................................................................................................................10
Task 4 (Covered in PPT)................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCE.................................................................................................................................12

INTRODUCTION
Hospitality sector is the section of service industry that deals with number of people for
the purpose of providing them accommodation and lodgings. This refers not only hotel, but also
other institutions in the form of overnight accommodation, hostels, inns, guest houses, restaurant
etc. These are designed for the purpose of providing different types of products and services that
can satisfy customers and make feel them happy (Burduja and Zaharia, 2019). To understand
about hospitality sector Hotel Hilton has been selected that is multinational hospitality industry.
This organisation has 15 brands across different market segment by involving Conrad. Number
of topics are going to be discussed in report such as introduction to financial transactions, trial
balance and different stages of HR life cycle. Moreover, specific legislations that uses by
hospital sector and employment laws that impacted on decision making are also explained.
Task 1
P1 Principles of monitoring and managing financial performance
Financial performance of a organisation is important that should be manage and monitor
properly so profitability can be made effectively. To implement plans and running activities
finance is required that is used to manage business performance. The Hilton is providing
different types of accommodation services to its customers and charge money that helps to run a
business effectively (Chong and Balasingam, 2019). Types of business transactions in context to
Hilton is defined below:
Sales – This transaction is recorded by managers by evaluating all selling transactions.
This means when organisation sales its products and services then it is managing by management
in order to improve financial performance.
Purchase – This means when raw material and other equipment is purchased by
organisation then it will be recorded by managers that helps to know the financial transactions.
Receipts – This is the amount of cash which is taken by a business in an accounting
period. This can be in the form of cash sales and money received from customers in accounts.
Payment – It is consider as trade value from one party to another in consideration of
goods and services. In other words, it is an obligation which is need to pay by a business for a
running activities effectively.
There are different methods used to measure the financial performance:

KPI: This is performance measure tool which is used by organisation to evaluate the
organisational performance. The management of Hilton uses this tool to know the financial
performance and assist ideas to improve this effectively.
Cost to profit ratio: Such rule is related to balance of rule that states how an organisation
get profits by reducing expenses. Hilton is using this principle to determine the net income and
expenses that helps to define profitability (Chubchuwong, 2019).
Return on investment: This is again performance measure tool used to evaluate the
efficiency of an investment and compare it with different investments. This helps management to
chosen company that to measure the amount of return on a particular investment and cost that
helps to make profit.
P2 Double entry bookkeeping system that used in recoding sales and purchases
Double entry bookkeeping system is consider as a system that involves recoding of sales,
purchases, cash disbursement and cash receipts journals which is require posting in ledger
accounts. According to this, every single entry should be recorded on both side as debit and
credit that helps to match the trial balance and provide benefits. Effective recording of debit and
credits shows in trial balance, income statement etc.
Manual and computer software and systems are uses by organisation to record the
financial data that states what are the profits and losses in business. Manually record means
means day by day recoding with written transaction. Computer and software system are digital
form of recoding transaction which is used to maintain all information collectively and secure.
The management of Hilton are using computer software and system to record the financial
information so it can increase the business transaction and performance by recoding all
information (Tuma and Sisson, 2019).
P3 Trial balance by applying balance of rule
Trial balance is the list of all general ledger accounts that contains in ledger of a business.
This involves ledger accounts and their debit and credit balance which states debits are equal to
credits in recording process. The aim of preparing trial balance is to ensure all activities are done
in organisation's ledger and balanced properly. The accountant of Hilton hotel uses balance of
rule while preparing trial balance that helps to inform the profitability. The components involves
company name, ledger, assets, liabilities, equity dividends, revenues and expenses. Moreover,
components are as defined:

Use of budgets for planning and control: This means management should involve
income statement, fixed cost and variable cost to make the profits and control the activities.
Control of resource allocation: The management should focus on stock taking,
inventory costing, system of waste management and flagging cost to control the issue and
progress that helps to make profits (Findlay and et. al., 2019).
Trial balance with Journal entries

Task 2
P4 Different stages of HR life cycle
HR life cycle is a concept in relation to Human resource department uses to engage
employees and run a business effectively. This involves various steps which are performed by
HR manager in order to run its business and increase the profitability. Such stages represents
challenges and opportunities by using in organisation. In Hilton hotel, the HR management is
using HR life cycle to solve the problems and recruiting a manager in food and beverage
department that are as explained:

Recruitment: This is the process of finding right person for each position that helps to
perform the business activities appropriately. In Hilton, Human resource manager is identify the
vacancy of food and beverage manager and publish in newspapers, websites and others in order
to attracts people. Herein, it receive a pool of candidate for the responsible post where qualities
and experience is needed to identify by management.
Selection: This is next process which is done by HR manager in order to select best
employees for their responsible post out of number of candidates. Such as, skills and experience
of all applications are checked by HR management of Hilton hotel and then it select a best
employee for this post. This stages is used to select good and capable employees where it can
accept challenges and perform well.
On boarding and orientation: This is important stages for new hires and organisation
where they get introduce themselves in organisation and get information regarding culture,
working and opportunities. Such as food manager has selected by HR management of Hilton
hotel where it get information and tools that are needed to start working. This process provide an
opportunity to new employees as to immerse new hires in organisation's culture and live for long
term (Gunnarsson, 2019).
Exit and transition: The ending stage is exit or transition that states every beginnings is
required come to end. In this, employees decide to leave or exit the organisation after competing
their period and work. Such as the employees of Hilton hotel leave the organization after
completing their period, retirement and personal reason. In this, manager of company need to
conduct exit interview that helps to get feedback and relieving them (Stanley and Zhang, 2020).
P5 Development of performance management plan for specific hospital industry
Performance management plan is the process which is prepared by management to
support and enabling employees to work in a proper way that allow company to meet with
organisational needs. This is valuable for organisation which states what steps should be taken in
order to attain the business goals. For preparing this, it is important for managers to
communicate with employees and provide feedback on organisational performance. It has
defined that the success of business depends on performance plan because it involve
identification, plan, review and monitor that helps to complete the task. For instance, in Hilton
hotel the productivity is reducing due to increasing competition and not competing customers
needs. This reason is becoming a issue of low productivity that need to be overcome. To

overcome this problem and increasing profitability a management plan has been prepared by
management through different interview methods thatare defined below:
Succession Planning : This is first step where a plan is set by management in relation to
reducing competition and increasing business performance. If organisation is able to make
strategic plan then only it can attain the decided goals. For instance, the management of Hilton
Hotel planned to introduce new service that is e-commerce and robotics that will help to provide
24 hours services to customers by solving their queries. This is new strategy that will attracts
existing and new customers that will help to increase number of customers. Moreover,
management conduct a orientation programme where all employees be able to get information
and their responsibilities to perform well.
Performance management : This is used to measure the performance of employees that
can help to complete the targets. In Hilton hotel, HR manager has authority and power to manage
the performance which is related to employees so, task can be complete in certain period of time.
Monitor : If a plan has been prepared successfully then it need to monitor appropriately
while implementing process. This is important for organisation to measure and monitor plan that
are they are running properly and how it will help to provide benefits. In this stage, goals are
understand by management and take action accordingly. In Hilton hotel, after preparing plan that
can help to manage performance and increase profitability is monitored by management. This
help to remove the negative behaviour and get business opportunities that helps to increase
organisational productivity and profitability (Henry, 2019).
Review : This is another phase which is used by management in order to know and
review the activities which they are performing. Herein, all functions and procedures are
evaluated by top executives so task can be complete and goal can be achieved in certain period
of time. In Hilton, Human resource is responsible for this activity who evaluate that new service
such as e-commerce and robotics are running good or not. Moreover, if any deficiency found by
them then idea is required to be suggest that can help to attain goals.
Maintaining employee motivation to retain employees – This is important part of
performance management plan that states retention of staff is needed in all organisation which
helps to complete task. In Hilton, after reviewing employees performance HR management
provide motivation to its staff so they feel valuable part of organisation and will perform more
efficiently (Karmokar, 2019).

Task 3
P6 Specific laws are related to hospital sector
For starting and running a business there is need to follow some regulations that are
formulated by government in the betterment of employees and organisation. This is important for
organisation to follow all regulations and policies that can help to comply with operations and
run it appropriately. There are different type of legislation which are followed by Hilton hotel
while operating business and running it appropriately:
Data protection and confidential act: If employees are working in a organisation then it
is important to keep its personal information protected. This helps to increase the motivational
level and retain them for long period. In Hilton, this regulation is followed by management in
which anything in relation to employee's personal details keep confidential and protected.
Therefore, employees of such organisation feel motivated and happy to work in this environment
(Kasemsap, 2019).
Food safety act: This act is related to food and safety that is provided to customers in
order to gain customer trust and providing them good health. According to this act, if a
organisation, hotel and restaurant is going to provide food to customers then it need to follow the
food standards that will help to create trust and increase number of customers. In context to
Hilton hotel, it is important for management to follow the food safety standard and provide good
quality of food that can increase number of customers effectively and increase business profits.
Cyber security act: This act is formulated by government in order to improve the
cybersecurity through enhancing sharing of information regarding threats and other purposes.
This involves information technology and computer system for the purpose of forcing companies
to protect their system and information. This act is followed by Hilton hotel for protecting
information from viruses, Trojan horses, worms, phishing, unauthorised access etc.
Equal opportunities: This act is designed to provide equal opportunities to people who
working in a organisation and running their business effectively. In this, all employees have right
to get opportunities so they can show their talent and perform business activities effectively. In
Hilton hotel, manager is providing equal opportunities to all employees that helps to work
effectively and increase business performance. According to this, all employees should be treated
equally and responsible to perform well (Lawrence, 2019).

P7 Examples that illustrates employment and contract laws has potential impacts to make
decisions
Laws and regulations are needed to follow by an organisation that has impacted on
organisational performance and decision. For instance, Hilton hotel is running business by
following employment and contract laws that motivates employees to perform well and increase
profitability. If organisation maladministration the laws then business will affected negatively.
So, it is important for business industry to follow the laws and increase profitability.
Company law: This is the body of laws which is formed for the purpose of running a
business under governing rights, relations and conduct of person. In other words, company law is
the legal practices of law in relation to corporations that helps to run a business effectively. This
laws states that owner are separate from organisation and they are not responsible for profit and
losses. For example in Hilton, company law is followed where director manage all activities but
it has separate identity to perform the activities. If organisation or manager maladministration
their laws then business will not be continue for long term as result it affect negatively
(Mazzarotto, 2019).
Employment law: This law is related to employees rights and opportunities that states
every organisation should provide equal opportunities to employees and should not discriminate
on the basis on religion, sex, age, culture etc. For instance, employment law is following by
Hilton in which it gives opportunities to all class, religion and sex of employees that make feel
them good. In this, employees shows their talent to influence employees and increase the
business performance. If organisation mala administrate this law and start to discriminate then
employees will be demotivate and will not perform well. As result reducing production and
number of customers that directly affect the profitability (Reneau, 2019).
Contract law: This means where two person are ready to share information and getting
things complete on the basis of contract is called contact law. This law helps to protect the rights
of contractor and contractee so task can be complete effectively. For instance, Hilton's
management has contract with employees in which they perform well and increase the business
performance. In case of breach the contract by both party then it become difficult to complete the
target. In contract law, breach of law is required by both parties otherwise it assumed as void
agreement. Therefore, business activities of organisation can be incomplete due to breach and
void agreement.

Task 4 (Covered in PPT)
CONCLUSION
Hospitality industry is categorised in the field of service industry by involving lodging,
food and drink service, event planning etc. are needed to satisfied customers. For organisation it
is important that to focus on financial information and prepare a trial balance by involving
income and expenses that can help to make profits. HR life cycle uses to resolve the issue and
increasing business effectiveness. Moreover, there are many legislation need to apply in
enterprise so employees feel good and retain for long period of time.

REFERENCE
Books and Journal
Burduja, S. I. and Zaharia, R. M., 2019. Romanian Business Leaders’ Perceptions of Business-
to-Business Corruption: Leading More Responsible Businesses?. Sustainability. 11(20).
p.5548.
Chong, K. Y. and Balasingam, A. S., 2019. Tourism sustainability: economic benefits and
strategies for preservation and conservation of heritage sitesin Southeast Asia. Tourism
Review.
Chubchuwong, M., 2019. The impact of CSR satisfaction on destination loyalty: a study of
MICE travelers in Thailand. Asia Pacific Journal of Tourism Research. 24(2). pp.168-
179.
Findlay, P., and et. al., 2019. Influencing employers so more people break free from poverty
through work.
Gunnarsson, M., 2019. Use-oriented business models.
Henry, V., 2019. The Correlation Between Employee Job Satisfaction and Leadership Style by
Leadership Personnel in Massage Businesses.
Karmokar, S., 2019, September. Service Design Business Concepts for the Elderly: Design
Thinking Approach. In European Conference on Innovation and Entrepreneurship(pp.
498-XX). Academic Conferences International Limited.
Kasemsap, K., 2019. Professional and business applications of social media platforms. In Social
Entrepreneurship: Concepts, Methodologies, Tools, and Applications (pp. 824-847). IGI
Global.
Lawrence, S. N., 2019. The Influence of a Transition Framework on College-Level Preparation
Strategies Used in University Business Schools: A Case Study (Doctoral dissertation).
Mazzarotto, G., 2019. The effects of social sustainability on guest choice, customer satisfaction
and willingness to pay a premium in the hospitality industry.
Reneau, M. D., 2019. Planned Failure: The Business and Politics Behind New Orleans Public
Schools.
Stanley, D. and Zhang, Y. J., 2020. Collaborative learning in online business education:
Evidence from a field experiment. Journal of Education for Business, pp.1-7.
Tuma, L. A. and Sisson, L. G., 2019. Becoming an Engaged Department: Scaffolding
Community-Based Learning Into the Hospitality and Tourism Management
Curriculum. Journal of Hospitality & Tourism Education. 31(3). pp.173-182.

APPENDIX
Information regarding Trial balance