Royale Restaurant: Business Toolkit Report - Financial and HR Analysis

This report examines the business operations of Royale Restaurant, a new health-focused restaurant in London. It begins by outlining principles for managing and monitoring financial performance, including the composition of finance, expenditure management, and risk identification. The report then applies double-entry bookkeeping to analyze sales and purchase transactions, culminating in a trial balance. Furthermore, it reviews the HR life cycle stages, emphasizing strategic talent management and its role in addressing staff turnover, followed by the development of a performance management plan. The report also identifies relevant legislation for the restaurant and analyzes the impact of company, employment, and contract law. Finally, it explores the interrelation of different functions and roles within the hospitality sector and examines communication, coordination, and monitoring methods within specific departments. The report provides a comprehensive overview of the restaurant's business toolkit, covering key aspects of financial management, HR practices, and legal compliance.

Hospitality Business Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1. Principles of managing and monitoring financial performance:........................................3
2. Application of double entry book keeping system of debits and credits and Analysis of
sales and purchase transactions to compile trial balance:......................................................5
3. Formulation of basic trial balance by applying balance off rule:.......................................6
TASK 2............................................................................................................................................8
1. Reviewing the different stages of the HR life cycle applied to Royale Restaurant:..........8
2. Development of performance management plan for Royale Restaurant:..........................9
TASK 3..........................................................................................................................................10
1. Identification of specific legislations that Royale has to comply and adhere to:............10
2. The way in which company, employment and contract law has potential impact on
business:...............................................................................................................................11
TASK 4..........................................................................................................................................13
1. Interrelation between different functions and roles within hospitality sector:.................13
2. Different methods of communication, ordination and monitoring applied within specific
department of the organisation:............................................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Hospitality industry is mainly associated with the activities or function related to
providing high quality and luxury services to customers. Main motive of organisations operating
in hospitality industry is to provide customer satisfaction by applying improvement and
innovation in services. As all industries are regulated by relevant authorities, this industry is also
governed and administrated by government through regulations and it is necessary for
organisation to follow these rules and regulations (Ervin, 2016). In order to understand various
aspects of hospitality industry, in this report a newly formed restaurant Royale Restaurant is
being opened in Bishops gate, London; is taken. Which is specialised in inventive, health salads
and juices and smoothies. This report also describes performance management plan, specific
legislations, link between different functions and roles within hospitality sector and ways of
communication, ordination and monitoring within departments of an organisation.
TASK 1
1. Principles of managing and monitoring financial performance:
Principles refers to guidelines to conduct any activity or imp0rove the activities or
functions. Financial performance refers to efficiencies and abilities to accomplish any task or
activity in order to achieve their objectives and goals. In this context following are the principles
of managing and monitoring financial performance of Royale Restaurant, as follows:
 Composition of finance: It is very vital for Royale to structure their finance sources and
to achieve appropriate composition of finance because sources of funding and finance
are directly linked with an organisation's performance. Excessive financing through
debts may reduce financial performance so in order to manage and monitor financial
performance systematic composition of finance is act as principle (Gnanapala, 2017).
 Manage expenditure and optimise costs: Financial performance mainly concerned
with profitability condition of an entity and to achieve profitability systematic
management of expenditure and optimisation of various costs though techniques like
budget and cost analysis is required. So for Royale being a newly formed company
minimising their cost is required to survive in initial period.
 Identification of risky factors: In order to achieve stable growth in identification of
potential and existing risk factors that can affect organisation's financial performance

adversely, is necessary. Royale should identify such factors to avoid any difficulty in
future.
In order to manage and monitor financial performance these principles assist Royale and
ensures future sustainable growth.
A. During an accounting period incomes and expenditures of business organisation are as
follows:
Incomings Outgoings
Benefits Drinks
Allowances Lunch purchases
Wages Household utility bills
Gifts Weekly food shopping
Clothes
Gifts
B. Explanation of some specific terms:
Types of cost: In day to day working, an organisation incurs different different costs and
expenditure which are necessary to operate business functions and activities. These costs helps to
determine profitability and performance of organisation (Charterina and Barrutia, 2014). These
are the major costs in Royale Restaurant related to its different operations as follows:
 Variable cost: A variable cost refers to those expenses that fluctuate in proportion to
number of output or costumers as the case may be. This costs are increase or decrease as
per change in level of output or scale of operations. It includes beverages, sales
commissions,utility costs etc.
 Fixed cost: These type of costs includes those expenses that does not fluctuate with the
number of customers served or numbers of food items offered by Royale such as
Adversing expenses, fixed administration cost, premises rent, depreciation etc.
 Semi variable cost: These are those cost which are fixed for a set level of or
consumption in Royale and become variable after an extent.
Sales: Sales refers to total amount of revenue and income earned by business
organisation during a particular period. In Royale monies received by serving customers or

delivering foods through online sites are considered as total revenue and income. Sales also
includes item as other income which includes other ancillary incomes.
Purchase: It includes amount paid by a business organisation to purchase raw material or
other items to operate its main activity. In Royale money spent towards purchase of raw food
items by organisation to prepare food and beverages are considered as purchase.
2. Application of double entry book keeping system of debits and credits and Analysis of sales
and purchase transactions to compile trial balance:
Double entry book keeping system: As per this system of accounting transactions are recorded
in way that every entry affects two accounts simultaneously. Every organisation like Royale
Restaurant adopts double entry system to record their transactions and for better reporting. This
is a Trial balance based on double entry system:
Particulars Debit Credit
Cash in hand (Negative Figure) 10700
Petty cash expenses 750
Cash sales 3350
Credit card sales 14795
Free issues 575
New kitchen equipments 6540
Food purchase 7900
Beverage purchases 12970
Purchase return 200
Discount received 2300
Credit notes 190
Rent 2850
Utilities 475
Functions and events (Income) 5967

Wages 4590
Debtors 700
Till shortage 152
Total 37502 37502
Analysis of Sales and Purchase transactions to compile a Trial balance suing Double entry
system:
Sales: It refers to cash and credit figures related to items sold or services provided. In
Royale, sales includes incomings like wages and other monetary benefits related to core business
of entity.
Purchase: it refers to cash or credit figures related to items purchased by entity. In
Royale, purchase incudes Weekly food shopping, Clothes, Drinks, Lunch purchases etc.
Following is a trail balance based on Table 1 based on double entry bookkeeping system
to reflect all the incomings and outgoings for a particular month:
Particulars Debit Credit Transaction amount
Wages 16500 16500
Gifts 23000 23000
Benefits 24000 24000
Allowances 19200 19200
Weekly food shopping 25200 25200
Clothes 16820 16820
Gifts 14100 14100
Household utility bills 3900 3900
Drinks 9980 9980
Lunch purchases 12700 12700
Total 82700 82700 165400

3. Formulation of basic trial balance by applying balance off rule:
Balance off rule: This is basically a process by which amount remain in ledgers are
brought forward to next year to find the balance on each ledger account in order that a trial
balance can be extracted as part of the accounting cycle (Schwager, Decker and Kaltenegger,
2016). In Royale balance off all ledgers at year end is significant to identify any
misappropriation and preparation of financial statement.
Trial Balance
Particulars Debit Credit
Bank loan 12000
Cash in hand 11700
Capital 13000
Rates 1880
Trade creditors 11200
Purchases 12400
Sales 14600
Sundry creditors 1620
Debtors 12000
bank loan interest 1400
Other expenses 11020
Vehicles 2020
Total 52420 52420
The above trial balance describes that transactions are correctly recorded because account
balance are properly recorded in trial balance and tallied. Trail balance contains sum of different
expense and income account ledgers which are appropriately classified as per matching principle
of accounting. Also matching of trial balance exhibits that all other generally accepted
accounting principles are followed.
Steps involved in drawing up trial balance:

After summarising and posting, trial balance is prepared by business organisation. Main
motive of trial balance to identify arithmetical or other errors like omission, commission etc.
Following are the steps required to be followed by Royale to prepare trail balance, as follows:
1. Prepare a formate showing three columns: First is Particulars which contains account
titles, second is debit balance of different accounts and third is credit balance of all
accounts (Chung and Chung, 2018).
2. Fill all accounts names along with their amount of balances as per their nature in debit or
credit columns.
3. Then calculate sum of debit and credit columns.
4. Evaluate reason if there is any mismatch in amounts.
TASK 2
1. Reviewing the different stages of the HR life cycle applied to Royale Restaurant:

Importance of HR Life cycle in relation to strategic talent management and overcoming
issues of staff rotation:
In HR cycle strategic talent management is important in order to hire people, manage
them, develop their skills which are necessary for organisation, and retain most appropriate
qualified and expert employees in business organisation. Under HR cycle talent management
plays significant role in formulation of strategy because it helps to manages its key employees.
So organisation in hospitality industry like Royale should efforts to effectively manage
employees in order to develop their skills, efficiency and capabilities in order to retain them.
Following are the importance of HR Life cycle in relation to strategic talent management and
overcoming issues of staff rotation:
Assists in Increase of employee performance: Using talent management helps to
identify which employees are best and appropriate for respective job that results in decrease in
issues related to performance management and staff rotation. It also ensures that best talent
within organisation can be retain (Bowie et.al., 2016).
Employee motivation to attain goals: An organisation by strategic talent management
retain their employees by motivating them to achieve goals and provides reasons for them to stay
in organisation.
Retain top talent: Under strategic talent management a properly organised on-
boarding practices leads to favourable retention ratio that assist company to reduce its
recruitment and performance management cost in long term.
Continuous coverage of critical roles: Strategic talent management create a framework
for identify special skills to assign signifiant unique roles in workplace to its employees. This
simply implies that company can achieve steady flow of employees to fill critical roles to assist
organisation to run their functions smoothly and to avoid extra pressure.
Recommendation: From above analysis it is clear that HR process should be improved by
adopting new strategy and process to improve effective planing throughout the HR life cycle. By
improving skill of employees and performance HR process can be effective to improve
planning.

2. Development of performance management plan for Royale Restaurant:
Short role play Script on the topic “ An employee is always late for work”:
In management performance plan should be in planned while considering negative effects
of such plan after formulation of plan (Singh, 2015). Effective communication without any
inappropriate words can enhance the quality of plan. Following brief script would be helpful for
understanding such way of communication:
Script One:
Discussion should not be undertaken:
Manager: "Your work's been really sloppy lately."
Employee: Sir, due to adverse environment and excessive workload there is delay in
work.
Manager: You are not sincere regarding your work allotted.
Employee: Sir, I am sincere enough but I need some more time to complete work.
Script Second:
Discussion should be undertaken:
Manager: "Your last three reports have contained an unacceptable number of statistical
errors."
Employee: I made a mistake, for which I am sincerely sorry
Manager: Your performance is good but what is main cause which hinder your
performance.

Employee: Sir, this task is new and I am working upon it, in order to give my best
performance.
TASK 3
1. Identification of specific legislations that Royale has to comply and adhere to:
Following are the major legislations that business like Royale related to hospitality
industry has to comply, as follows:
 Employment Act 2002: This act governs working policy of employees and terms &
conditions of employment in hospitality sector. It helps to employment contact for while
describing any penalties in case of violation of contract.
 Food Safety Act 1990: This act requires business organisation to do not include or
remove anything from food or beverages in a way that means it would be hazard to health
of consumers. It also ensures that food served or sold is as per expectations of consumers
in term of nature, substance or quality (Moeti, 2016).
 Live Music Act 2012: The act describes that permission in form of licence is required for
a live music event or performance. However there is no restriction in case such live music
performance takes place during 8am and 11pm or it takes place at licensed premises or
workplace or audience is no more than 500 people.

2. The way in which company, employment and contract law has potential impact on business:
Various regulations, legislations and standards brings some adverse effects for business
organisation in hospitality industry. Changes in regulations or legislations requires change in
process and activities in business operations. Company should change their process as per
changes in regulations and also tracking of changes in these regulations helps to avoid any
difficulties in near future. Due to regulations of Live music act, Royale should manage their
music events as per these regulations or take a licence for such events. Following are the
example of companies prosecuted under above described acts and regulations:
1. Manager of Hamilton based Craig Services and Access Limited was was condemned
to a most extreme punishment of 2 year imprisonment for his disregard of well being and