Comprehensive Report: Financial Management, HR in Hospitality Business

This report provides a detailed analysis of financial management, human resource lifecycle, and legal considerations within the hospitality business, specifically focusing on a case scenario involving a business specializing in healthy salads, juices, and smoothies. The report begins with an introduction to the hospitality sector and its importance, followed by an in-depth examination of financial transactions, methods to manage and monitor financial performance using KPIs and ROI, and the principles of the double-entry bookkeeping system. It includes a trial balance and cost analysis, emphasizing the importance of accurate transaction recording. The report then transitions to the HR lifecycle, reviewing the stages of recruitment, selection, onboarding, retention, and exit, evaluating each stage's significance. The report identifies relevant legislation and its potential impact on the business, along with an ethical analysis of the regulations. The report includes a discussion of the financial impact of ethical considerations and concludes with a summary of key findings and recommendations for business growth and efficiency.

The Hospitality Business
Toolkit
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Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1...................................................................................................................................3
Introduction..................................................................................................................................3
Methods to manage and monitor financial performance within the enterprises..........................4
Principles of double entry bookkeeping system..........................................................................4
Trail balance................................................................................................................................5
Analysis type of cost and its management to impact the financial performance.........................6
Importance of accurate recording of transaction.........................................................................7
Conclusion...................................................................................................................................7
ACTIVITY 2...................................................................................................................................7
Review of different stages of the HR life cycle...........................................................................7
Evaluating each stage of HR life cycle and importance of HR...................................................8
Development of performance management plan.........................................................................9
Valid judgement and recommendation......................................................................................10
ACTIVITY 3.................................................................................................................................11
Identification of specific legislation..........................................................................................11
Company’s employment and contract law impact.....................................................................11
Potential implication of the regulation......................................................................................12
Reflect on the impact of ethical issues of regulation.................................................................12
ACTIVITY 4.................................................................................................................................13
Covered in PPT..........................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
This report is intended to deliver specific information about the hospitality business that
consists of lodging, food & drinks, event planning, entertainment and so on. In fact, this industry
is not just crucial to businesses, but also its customers, staffs and economies. However, it is
considered as major factors in the business trip as well as vacation (Xu and Gursoy, 2015).
Therefore, this project report throws highlights on the way finance and transaction can be
managed to minimize cost in the hospitality sectors. Apart from this, an assessment of the HR
lifecycle by HR strategy is also being discussed effectively. Furthermore, discussion regarding
all the potential impacts of legal and ethical considerations on the hospitality business is done
accordingly.
ACTIVITY 1
Introduction
According to the mentioned case scenario, it has been seen that the business is getting
more popularity because of its inventive, healthy salads that are served along with a range of
blended juices and smoothies. However, presently the main concern is to increase evening sales
so that maximum earning can be incurred. Therefore, it is important to have proper control over
the finance so that idea would not after their business growth. There are various types of
financial transactions that are required to be taken into account within the hospitality business.
Business transaction:
 Sales: Being a thriving enterprise, its maximum products like healthy salads, juices are
sold to customers for money and recorded as cash sales or credit in the sales account
books as a source of sales receipts.
 Purchase: All the items that are being purchased by its customers from this business are
being recorded into a purchase book. The source document used for recording
transactions into the purchase journal is invoice (Ramos and et.al., 2017).
 Receipts and payment: It is another important business transaction that is based on a
summary of actual cash receipts and payment. These are extracted from the cash book
over a specific period.
The IAS regulation is required to be consolidated financial statements of this enterprise.
However, FRC (Financial reporting council) is held responsible for setting the standard for
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reliable accounting standards so that chances of mistakes can be avoided while recording the
transactions.
Methods to manage and monitor financial performance within the enterprises
Financial performance within the hospitality business is an essential way to determine
their primary mode of business operation and manage accounting related issues. Moreover, it
further assists in evaluating the organization's overall financial health during a specific period. In
every business organization, financial measures are derived from several charts of accounts that
are established in a business profit and loss statement. There are various methods through which
financial performance can be managed such as:
 KPI: It is considered as one of the primarily used terms in the hospitality sectors. It
acts as a rule to determine the key financial drivers such as food & beverage and other
facilities. According to the case scenario, they can measure, evaluate and take
chances in their operations without restaurants to gain success.
 Cost-to-profit ratios: It is calculated by selling price charged as based time 100.
However, the percentage of total selling cost that is converted into profit is the
company target. It would assist the enterprise to earn a sufficient amount of profit by
selling healthy drinks to their consumers (Yoo and Bai, 2013).
 ROI (Return on investment): It happens to be one of the primary ratios that help to
measure the efficiency of an investment as well as analyze the effectiveness of the
value of several investments. Normally, it measures the value of return on a specific
investment.
Principles of double entry bookkeeping system
Double-entry bookkeeping: It is one of the effective systems of recording a financial
transaction that requires a corresponding entry to several accounts. It has two equal sides such as
debit and credit. The essential concept of the double-entry system is based on a key principle that
every debited there is having an opposite credit for an equal amount of money and vice-versa. In
the mentioned case scenario, they need to record their everyday financial transaction by using
this double-entry booking system. It will assist in the proper accuracy of the amount that is
posted into the account books. The basic principle is Assets = liabilities + Equity. Below
mentioned are certain accounts that are recorded in a double-entry book.
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Sale: As, it has been seen that every accounting transaction has equal as well as opposite
effects in at least two other accounts. Thus, credit sales are reported on both income statements
and balance sheet.
Debtor A/c…………. Dr
Receivable A/c………Dr
To sales A/c…….CR
Purchase: It can be made on either cash or on credit basis. Therefore, in case of cash
purchase
Purchase a/c………….DR
To Cash a/c……..CR
In case, of credit purchase the entry is same as in the respect to the cash purchase,
whereas the credit entry is made in the payable ledger instead of cash ledger.
Cash disbursement: In this account, other items like as cash purchase the debit amount
will have posted to the reliable purchase and expense accounts. All cash outflows are being
entered into the cash disbursement journal.
Cash receipts: It is important to post reference column that can be used to enter into the
account of subsidiary or general account book to which the entry is associated. In the hospitality
business, all cash received by them would be reported in the accounting records. A debit is being
posted to cash in the value of money received.
Trail balance
Trail balance
Particular Debt Credit
Cash 22500
Inventory 25000
Rent 1500
Wage expense 750
supplier expense 500
Long term liabilities 20000
Account payable 14500
Common stock 10000
Revenue 5750
50250 50250
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Steps of trail balance and purpose:
 Preparation of a workbook with three columns
 Put in all the account titles as well as record its balance in the reliable debit or credit side
 Add the debit and credit amount
 Compare the total at the end.
The main purpose of preparing trail balance is to make sure that all accounting entries made
into the general ledger are accurately balanced. It can assist the enterprise to rectify the entries by
passing a new journal entry giving the accurate debit and credit to the real accounts. It is
important to cancel the effect of wrong debit by reversing it (Altinay, Paraskevas and Jang,
2015).
Analysis type of cost and its management to impact the financial performance
Cost is an essential aspect of any business organization. It could assist in producing a large
number of products that can meet the demand of respective customers. However, during the
manufacturing process, the manager needs to go through different types of cost that are discussed
below:
 Income stream: It is known as an easy way of attaining a constant income such as salary,
but because super income streams are tax-free for the individuals who are above 60 years
of age.
 Fixed cost: These are basically considered those costs that do not change as a function of
operation of a business within a specific period. Like, rent, utility bills and insurance
(Wearne and Morrison, 2013).
 Variable cost: It is termed as those costs that alter with the change in the quantity of the
products that a business develops. Examples, raw material and packaging costs in the
hospitality sector.
A business owner used to make a comparison in the actual financial outcome with the
budgeted, but in the case, the actual value is higher than estimated; the management has to take
necessary action. It will directly affect the performance along with the overall profitability of an
organization.
Calculation of Profit margin
Particular Amount
Revenue 50000
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Cost of goods sold 29000
Gross profit 21000
Gross profit margin
21000/50000 0.42
Profit margin
0.42*100 42
Importance of accurate recording of transaction
The main objective of GAAP is to develop a uniform set of standards for financial
reporting. It should be followed by the investors in order to make a reliable decision as to where
make investments. It provides proper consistency in the recording of financial transactions that
can assist in evaluating a company’s financial statements. However, it will also develop ethical
standards so that business is less likely to mislead accounting data on financial reports.
Conclusion
After analyzing the business situation that is mentioned in the case scenario, it has been
seen that financial management assistance to develop the profitability position by using strong
financial control measures. Moreover, proper monitoring of financial performance tends to create
a more certain and reliable chance to take short as well as long term decisions (Adesina and
Ngozi, 2013). It has been suggested that with the help of effective monitoring techniques, it will
lead to a healthier business and faster growth for the company. Stocktaking is a physical
verification of the quantities of items that are held in an inventory. This will be done to deliver
an audit of current stock. Inventory costing is another important way to control the performance
of an organization because it allows a monetary value for the products that make up their stock.
ACTIVITY 2
Review of different stages of the HR life cycle
HR / Employee life cycle: It is considered as an essential matter in HR management that
provide information regarding the stages of an employee’s time by a given organization. In fact,
it is based on a specific sequence of the stages employees that go along with the role of the HR
manager. Every stage is having its challenges and opportunities for Marriott International. The
key stage of the HR life cycle is mentioned below:
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 Recruitment: This stage is all about finding capable employees for each position within
Marriott. With the help of effective recruitment, strategy organizations can easily be
monitored and leverage the employees as well as help them to deal with challenges to the
food industry.
 Selection: It is the second stage in the HR life cycle which is related to the selection of
the right candidate or employees from the pool of recruitment (Singal, 2014). In this
phase, the scrutiny of a candidate is done based on their talent and skills.
 Onboarding or orientation: It provides a great opportunity to immerse the fresh
employees in the Marriott culture. It has been analyzed that almost 50% of senior outside
hires fail within 1.6 years on the job. It is less biased because of newly selected
employees.
 Retention: It is a more crucial stage in the employee lifecycle model. It can cost more to
an organization like Marriott in terms of wages and additional advantages. It is important
to encourage open and reliable communication among employees as well as management.
By giving them training, pay an employee the market rate for the job can help in retaining
talent in the food & beverage industry.
 Exist: It happens to be the final stage in the HR life cycle when it comes as an employee
leaves the organization. It can be of any reason such as personal, retirement or offer of
new jobs. Thus, it is important to have flat and distressful separation.
Evaluating each stage of HR life cycle and importance of HR
The human resource life cycle is associated with the stage that an employee is involved
while working in an organization like Marriott. Every business is having its role, opportunity,
and limitation. Like for example, in the case business is moving with a high capacity, it means
attention would be provided to every stage of the motivation of the HR life cycle.
For every business organization, it is important to hire the right kind of people for the
right job so that the chance of getting more reliable outcomes in the food and beverage industry
can be maintained for a long time.
A well organizes staffing plan would be made that can be aimed at finding out the current
position that is vacant for the employees. The selection of an appropriate workforce could lead to
an increase in the performance of the Marriott hotel (Brotherton, 2012).
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At every stage, the performance of an employee could be measured by a supervisor. They can get
relevant feedback and give them to their leaders which would further be helpful to take the right
decision regarding employee selection or their retention purpose.
Talent management is an essential aspect for the employee to make them feel engaged,
skilled and motivated to work in the correct direction towards the goals.
Fig: (Important of talent management, 2018)
Performance management: TM can also help Marriott employees to feel engaged, skilled and
motivate them to work towards the objective of an organization. It will assist in increasing
customer satisfaction as well as the performance of the business.
Succession planning: It will enhance the availability of experienced as well as the capability of
employees that are developed to assume these roles as they offered. However, it is a plan that
motivates managers to implement, customize and follow to fulfill the requirement of the Marriott
organization (Ong, 2012).
Employee motivation to retain staff: It is important to have the right strategic talent
management that can assist Marriott organization to keep its employee motivated. It will create a
more specific reason for them to remain in the business and perform their role effectively.
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Development of performance management plan
Table of clarity
Results in
percentage
Job satisfaction (Role clarity, conflict and
content)
Role clarity 60.00
Conflict 52.00
Content 50.00
Performance feedback
Complexity 52.00
reversibility 20.00
Time of
communication 56.00
Employee perception on the basis of their
performance
Role play 20.00
Animation 20.00
It has been seen that yearly performance reviews for the employees of Marriott can
certainly be beneficial to improve their capabilities. The only evaluation staffs receives from
their leaders as well as their HR department. It will assist in improving communication by
regular check-ins from managers to share their goal freely.
Valid judgement and recommendation
In every business organization, it is important to have certain legal aspects that would
assist the department to manage its employee’s issues. Some of them are:
 Fair labor standard act 1938: It is an important legal act that protects the employees
from all kinds of workplace-related issues such as minimum pay and safety. The Marriott
hotel needs to govern significant aspects of staff of labor relations.
 Tribunal claims: It is a crucial claim submitted to reduce claimants who are currently
required to pay fees at the time of lodge. The receipt of a claim is still smaller for the
staffs dread by the costs, time and increasing morale (Köseoglu and et.al.,
 2016).
 Grievance issues: In the Marriott hotel, the employee would have to deal with a lot of
legal rights to increase grievance. However, it can range from employment terms to an
allegation of bullying and harassment.
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It has been recommended to the organization to follow an effective policy that can help their
employees to protect them from any kind of unethical obligations. Therefore, workplace safety,
child labor and overtime provision are required to be taken into account so that chances of
mistake can be avoided.
ACTIVITY 3
Identification of specific legislation
In food and beverage sector, food related a law tends to play an eminent role in
hospitality sectors as well as knowledge regarding clean, store food and hygiene drinks to their
customer. It will assist Marriot hotel to protect their business and avoid lawsuits as well as fine in
the future.
Regulation Legislation Standards
They are simply
enforcement by regulators
as well as head of state
government.
It is a directive placed by a
government body of a nation.
However, it acts as external
driver.
It makes things perform by
delivering specification for
items and services.
It is a specific need that can
take on different form like
industry laws that are
broader in scope.
Legislation always is made by
a head of state for a specific
purpose.
Sometimes, it takes the
reference documents that
provide specific information
regarding the criteria.
 Environmental legislation: In the food and beverage industry, there are certain issues
related to high level air, water and land pollution. They need to deal with these issues so
that less harm could make to the nature.
 Food and safety legislation: In hospitality industry, food law can be used to regulate the
overall production, trade and keeping the safety of food. Therefore, it covers the legal
aspects of food control and relevant factors of food trade.
Company’s employment and contract law impact
In the hospitality business, legal aspects would affect the relationship between employers
to employees. However, staff must obey government regulations concerning the way to threaten
its employees. Certain legislation that is required to be followed are mentioned below:
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 Data protection Act 2018: This legislation is made to protect individual or customer
data that are used by the organization. It will assist people as well as lays down-
regulation regarding how information regarding employees could be taken into account
(Leung and et.al., 2013).
 Confidentiality: It is important aspects for an organization to maintain dignity for those
using health and social services. Health records act 1990 provides specific rights of
access to the employee’s data that may have a claim arising out of their needs.
 Equal opportunity Act 1972: Following this act, it provides the right to the employee to
sue in federal courts in case it finds a logical source to believe that there has been
employment discrimination.
 Anti-discrimination: It refers to those legal laws that are designed to avoid
discrimination against a specific group. Workplace issues are more common in an
organization, thus this act provides a means to bring a complaint to deal with their
issues.
Potential implication of the regulation
The IT protection act needs that information brokers can ensure data accuracy and
prevent mitigate potential harm to the employees. In the hospitality sector, maximum work is
entirely based on an online network. They used to order food and another service by using a
digital network. Thus, the chance of hacking is high in these situations.
Cybersecurity laws: According to IT act 2000, it would provide data security of the
employees those are making payment by using credit cards or any other net sources for
purchasing the food items.
Reflect on the impact of ethical issues of regulation
Business ethics: It is known as a specific form of applied ethics that determine
principles, moral and ethical issues that occur in a business environment. It applies to every
aspect of business matte that is relevant to the conduct of an individual.
CSR: In this company tends to integrate social concern in their business regulation along
with the stakeholder integration. The primary role is to control cost, modify the brand and draw
the attention of skilled talent to attain overall success.
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Employment law: It is considered as a large area that consists of an employer or
employee relationship except for the negotiation. It covers the labor laws as well as collective
bargaining matters.
In the hospitality industry, there is the end number of issues like crime, theft, and fraud
are common. The hotel manager tends to deal with a lot of situations that create ethical
implications. Time management is one of the major features in a hotel that brings with their
turnover, lack of commitment and minimum literacy is need to be deal with the employee on a
regular basis.
Political and security issues, as well as a skilled labor shortage, are two major ethical
issues that are seen in the hospitality sector. It will lead to an impact on the overall growth of the
business. It has been suggested that to provide proper safety to their employees those are
working regularly within the hospitality sector. This would also motivate them to perform more
freely in the workplace.
ACTIVITY 4
Covered in PPT
CONCLUSION
From the above project report, it has been concluded that the hospitality business plays an
important role in the development of the society and economy. However, it is vital to have
proper use of accounting measures to avoid any kind of mistakes in the reporting system within
the hospitality sector. Moreover, assessment of the HR life cycle is also been an important aspect
of the concerned business. Further, analysis of the potential impact of legal and ethical
consideration that is faced by the hospitality industry is also required to be examining
effectively. It will provide a huge advantage to the organization to sustain in the market for a
longer period.
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REFERENCES
Books and Journals:
Adesina, K.I. and Ngozi, E., 2013. Hospitality Business Vs Environmental Sustainability: A
Study of Soarak Hotel and Casino Lagos.
Altinay, L., Paraskevas, A. and Jang, S.S., 2015. Planning research in hospitality and tourism.
Routledge.
Barrows, C.W., Powers, T. and Reynolds, D., 2012. Introduction to the hospitality industry (No.
Ed. 8). John Wiley & Sons, Inc.
Brotherton, B. ed., 2012. International hospitality industry. Routledge.
Harrington, R.J., Ottenbacher, M. and LöWENHAGEN, N.I.N.A., 2015. Are culinary and
hospitality service attributes key predictors of returning visits for culinary tourism
locations?. Journal of Gastronomy and Tourism. 1(1). pp.45-55.
Köseoglu, M.A., and et.al., 2016. The evolution of business ethics research in the realm of
tourism and hospitality. International Journal of Contemporary Hospitality
Management.
Leung, D and et.al., 2013. Social media in tourism and hospitality: A literature review. Journal
of travel & tourism marketing. 30(1-2). pp.3-22.
Ong, B.S., 2012. The perceived influence of user reviews in the hospitality industry. Journal of
Hospitality Marketing & Management. 21(5). pp.463-485.
Ramos, C.M., and et.al., 2017. Framework for a hospitality big data warehouse: The
implementation of an efficient hospitality business intelligence system. International
Journal of Information Systems in the Service Sector (IJISSS). 9(2). pp.27-45.
Singal, M., 2014. The business case for diversity management in the hospitality
industry. International Journal of Hospitality Management. 40. pp.10-19.
Wang, Y.F. and Tsai, C.T., 2014. Employability of hospitality graduates: Student and industry
perspectives. Journal of Hospitality & Tourism Education. 26(3). pp.125-135.
Wearne, N. and Morrison, A., 2013. Hospitality marketing. Routledge.
Xu, X. and Gursoy, D., 2015. A conceptual framework of sustainable hospitality supply chain
management. Journal of Hospitality Marketing & Management. 24(3). pp.229-259.
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Yoo, M. and Bai, B., 2013. Customer loyalty marketing research: A comparative approach
between hospitality and business journals. International Journal of Hospitality
Management. 33. pp.166-177.
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