Hospitality Business Toolkit: Financial Management and HR Strategies

This report provides a comprehensive analysis of the hospitality business, focusing on financial transactions, human resource management, and legal/ethical considerations. It begins by exploring financial transactions, source documents, double-entry bookkeeping, and the need for accou...Read More

HOSPITALITY BUSINESS
TOOLKIT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
LO 1.................................................................................................................................................1
Financial transaction to hospitality businesses with description to source documents and
recording processes.....................................................................................................................1
Principles of double entry bookkeeping systems of debits and credits.......................................2
Need for an accounting report and presentation of trail balance................................................3
Analysis of the type of costs.......................................................................................................4
Critical evaluation of role of financial management and monitoring ........................................5
TASK 2............................................................................................................................................6
LO 2.................................................................................................................................................6
Assessment to manage human resource life cycle within the context of HR strategy................6
LO 3.................................................................................................................................................8
Illustration of impact of legal and ethical considerations within hospitality businesses............8
TASK 3............................................................................................................................................9
LO 4.................................................................................................................................................9
Enclosed in PPT..........................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business within hospitality sector deal with various transactions and functions to
maintain its overall activities from providing services to dealing or managing departmental
functions (Bartram and Grinblatt, 2018). It will explain all given tasks in the context of Pan
Pacific hotel established in London.
This study will cover an analysis of different type of costs incurred within selected
industry. The report will cover some basic description to financial transaction persist within
hospitality context. It will include the principles of double entry systems within business
accounts. It will also assess the management related to human resources' life cycles and impact
of consideration of legislation and ethics within hospitality sector. It will also reflect the
importance of communication, coordination and monitoring within hospitality sector.
TASK 1
LO 1
Financial transaction to hospitality businesses with description to source documents and
recording processes
Financial transaction within hospitality sector varies different type of tenders, bills, cost
analysis, budgeting and many other financial statements (Armstrong and Matters, 2016). This
transaction can be done by different sources of written documents, briefs and others related
statements.
Source documents
These documents are the statements that has an original record of different transaction
take place within companies (Bakhtiar and et.al., 2018). Different type of source documents that
can be helpful in financial transactions are Cash memo, bills, Receipts, Pay slips, debit and credit
notes, cash vouchers etc. These documents are helpful in conducting financial transaction like
dealing with suppliers, selling property, taking loan from bank etc.
Recording processes
Recording processes are the systematic procedure of maintaining or developing all
sources documents persisting within any business. These process includes steps related to
adjustments ledger entries, assessing trail balances or correcting errors, closing entries etc.
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Principles of double entry bookkeeping systems of debits and credits
This record keeping process refers to dual entry of every transaction activities, there must
be the maintenance of two separate records for each of its financial exchanges.
For double entry bookkeeping system there are different principles applicable for debits
and credits. These principles are universal within any of the financial activities persisting within
businesses environment (Dimitrovska and Gjorgieva- Trajkovska, 2019). Double bookkeeping
system based on the principle of “duality” which refers to the maintenance of two type of
transactions simultaneously.
Another principle that is applicable on double entry bookkeeping system is that every
entity of business need to be treated separately. The owner and company cannot be treated as a
single component.
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Illustration 1: Steps of
recording process
(Source:Double-entry
Accounting System, 2018)

Along with it, there are certain considerations that need to be adhere within double entry
system is that the amount of assets must always be higher than that of liabilities. Businesses and
company must have the least number of liabilities to achieve high level of profit margins.
Need for an accounting report and presentation of trail balance
Accounting reports are some important elements of business environment that helps to
seek the standardized pathways to increase management services for any business (Armstrong
and Matters, 2016). These are generally the description of certain transactions that are
maintained by organization to specify clear expenditure, profits, losses that a company
experienced.
In terms of Pan Pacific hotel, its accounting reports are generated by its accounting
manager that includes number of calculative description to each of its business activities. These
accounting reports are necessary for hotel as it deliver various strategic information to its
executives for further development of business.
 Accounting report for hospitality industries, is necessary to present the financial
statements to employees to make them aware regarding present condition of company.
 It provides sufficient outlet to hotel's staff for further investment and availability of
resources for market penetration.
 Income statement of organization or selected hotel deliver it adequate data to analyze the
existing level of its sales, profit margins.
 Balance sheets that are being prepared after every type of transaction of hotel, drives its
approaches towards the assessments of its assets and recognizing or revising its liabilities. Cash flow statements for hotel give it a clear idea regarding the amount of capital
invested by it on a particular set of services or equipment or any business function.
TRIAL BALANCE SHEET
FOLIO DEBIT CREDIT
Hotel Equipment 100 12000
Debtors 101
Bank 102 14800
Capitals 300 15000
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Drawings 301 500
Loan 200 1000
Creditors 201
Service renders 400 15,500
salaries 500 4000
Telephone expenses 501 200
31,500 31,500
Trial balance is a form of standardized structure consists of specific calculations with respect to
debits and credits. It is an accounting document that is prepared by companies after preparing all
the ledgers, Journal entries. A disadvantage of Trail balance sheet is that it cannot detect the
errors within calculations.
Analysis of the type of costs
Based on the businesses' environment, the type of costs vary with material costs, labor
costs and other expenses. Hospitality industries undergo with range of costs depending upon its
business activities related to supply, manufacturing, delivering its services.
Fixed Cost
This type of cost do not change with time and remain stable for specific business activities. For
hotels salary of employees, bills of electricity, suppliers related to office, Insurances etc. are the
fixed costs that are paid by every service provider.
Variable Cost
This is the repair costs or any extra amount that need to be paid by hotels on fixed costs. Within
any business environment, this cost can be incurred specially at the times of delivering bonus,
gifts to employees. Accumulating raw materials for preparing food within hotels can be a part of
variable costs.
Semi variable Cost
This cost have tow sections, one is fixed and other is variable hence it is also known as the mixed
cost. For instance at Pan Pacific hotel, the wage of drivers can be said to be the semi variable
costs (Morales- Díaz and Zamora- Ramírez, 2018). Standard bills of electricity for its unused
area need to be paid which falls under the category of semi variable costs.
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Apart from the above mentioned costs, there are certain other significant costs incurred
within hospitality sector and other businesses as well.
Critical evaluation of role of financial management and monitoring
As per the view of Singh and Ogbeide, (2018), financial management within selected
service industry is important ton manage various financial functions of organizations. There are
variant of instances where hospitality industries need to take considerable actions in terms of
budget planning, cost management, seeking financial elements for businesses. For accomplishing
such tasks and to adhere with the financial needs of the company, hotels or other sectors of
industry need to manage its financial conditions.
According to Shara, Muda and Rujiman, (2019), “Profit maximization” is one of the role
of financial management within any hospitality sector. For Pan Pacific hotel, finance department
is responsible to conduct certain significant assessment to increase profit margins of the
company. It helps to evaluate the amount of capital required to conduct future business activities.
Pan Pacific hotel utilizes an effective financial management system with the help of advanced
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Illustration 2: Type of different costs
(Source: Manufacturing and Non manufacturing Costs, 2018)

tools and software. Allocation of funds and its control are being implemented by the hotel
through strategic management of capitals.
Furthermore, Mitchell, Font and Li (2015) included the fact that, there are number of
advantages of finance management in achieving desired business growth. Flow of finances and
capitals must be regularly monitored to stabilize fluctuation that may occur within business
environment. Pan Pacific hotel implement effective stock management functions to regulate the
tasks that require surplus amount of capital.
TASK 2
LO 2
Assessment to manage human resource life cycle within the context of HR strategy
Employee life cycle in businesses is the time frame of employee staying connected with
organization. Success of human resource life cycle within any business depends upon the
facilities given to him by particular business sector. Within any hospitality industry or in context
of “Pan Pacific” hotel, management team has laid utmost importance to task forces and to
nurture their life cycle till they leave the hotel (Shara, Muda and Rujiman, 2019). This life cycle
consists of certain significant elements that are being considered by hotel from its beginning till
its completion. HR team is responsible to prepare strategic plan managing employees' life cycle
of different department within hotel. Employees life cycle within selected hotel undergoes with
different stages and processes.
Interview
The hotel has a policy of undergoing for a more interactive session at the time of
interview. Interview process within hotel is being taken by panel of managers and executives to
select the most appropriate candidate for the job.
Induction program
Similarly, Induction program for newly joined employees within selected hotel is carried
out by panels of executives and management authorities specially for higher posts. This
programs include description to certain significant policies, achievements and future goals of
employees. It is based on a principle to reflect that employees have chosen the best place to
work.
Performance review
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It is carried out by different managers and assistance officers of hotels in a fixed time
interval to assess the growth and issues of employees (Lui and et.al., 2018). It is conducted in a
professionalized manner and is not biased or discriminating.
Learning and development
The hotel provides continuous learning methods for coordination in organization to its
employees for their growth and development. Pan Pacific hotel implement sufficient methods to
convert its employees into assets.
Promotion and succession planning
This is an important method where existing leaders identify the caliber of employees and
tend to deliver them a higher post based on their performance level (Oduwusi, 2018). This
method is important for any organization to increase motivation among employees and to
Exit
Employees may take exit from any organization or say the hotel due to different reasons.
There can be number of reasons of employees opting for leaving their job. It may be due to poor
set of facilities provided by organization. In case of Pan Pacific hotel of London, the employees
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Illustration 3: Elements of employees' life cycle
(Source: Human Resource Life cycle. 2017)

may their job due to issues related to long working hours. It can also be due to decreasing
customers' loyalty from past few months.
Exit Interview
This interview session is aimed to assess the employees' interests and their demands from
organizations. In case of Pan Pacific hotel, the interviewer may ask them questions related to
poor infrastructure of industry. He should ask the individual to present his view in respect of the
advantages and experiences he gained from company. There are some other questions too that
might be asked by management team or executives to retain talented employees (Bakhtiar and
et.al., 2018). The employer may ask to describe working culture of company. Management of
Pan Pacific hotel may ask for reasons why an individual is leaving a job or similar questions on
that they can be answerable for any of misconception felt by employee.
LO 3
Illustration of impact of legal and ethical considerations within hospitality businesses
Legal and ethical consideration within each of the business environment is an elementary
segment to implement. For hospitality industries, there are number of ethical and legal
considerations that need to be fulfilled by businesses (Armstrong and Matters, 2016). For hotels
like Pan Pacific, the management team need to pay attention towards the safety provision of its
customers and employees. Implementation or adoption of health and safety laws is mandatory
within the context of any hospitality industry.
Legal considerations refers to the inclusion of various laws applicable to the hotels or
selected service industries. The most significant impact of legal framework within hospitality
industries is highly visible within the interest of customers and job applicants (Lui and et.al.,
2018). A safe and secured environment in hotels will attract its guests and employees as well.
Proper adoption of safety policies within each of its departments will deliver a proper and
smooth functioning of the businesses or companies.
London Local Authority Act 2004
Health and Safety Act
Hotel Proprietors' Act 1956
Consumers Right
National Minimum Wage
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All the above mentioned laws must be adopted any hospitality industry or hotel. For Pan
Pacific hotel, it has adopted certain safety and security laws to ensure safety of its employees and
customers (Singh and Ogbeide, 2018). This adoption of legal laws within hotel affect the
decision making of hotel. For example, for compliance of National Minimum Wage Act, the
hotel need to deliver standardized amount of wage to its employees to reduce any kind of legal
complications.
Ethical considerations related to hospitality sector or selected hotel plays a vital role in
achieving desired goals, market image and customers' loyalty. Elements of ethics that have
positive impact on business are-
Compliance to Corporate Social Responsibility
This compliance related to societal concerns will deliver a responsive image to the
industry or organization. Pan Pacific Hotel is concentrating on the policies of its social
responsibilities to enrich its market image and sustainability within businesses environment.
Honesty
This is one of the important ethics that need to be compiled within each of the business
activities performed by employees or employers (Farmaki, 2018). In context of hotels like Pan
Pacific, this ethical consideration will help to deliver harmonious relations among employees as
well as visited customers. It will help to achieve a customers' interests and trusts for the provided
services.
Commitment
Commitment of staff members and executives for organization's service is a primary part
of ethical consideration that must be developed within team members (Shara, Muda and
Rujiman, 2019). Pan Pacific hotel's has high standards of commitment for its customers, it has
delivered it a high level of competitive advantages.
These ethical considerations affect the hotel's decision making process. Pan Pacific need
to comply all its designed CSR activities and policies at regular time interval. Apart from CSR,
ethical considerations like honesty, commitment, trustworthiness are the uncontrollable elements.
It can be promoted within organizations by increasing transparency, healthy communication and
continuously triggering responsibilities
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TASK 3
LO 4
Enclosed in PPT
CONCLUSION
The report has summarized that hospitality industry must have different legal and ethical
provisions to perform each of its services. The report has also focused on the importance of exist
and exist interview that must be adhere with significant questions to analyze weaknesses persists
within company. The study has focused upon a fact that inclusion of health and safety law is
highly important to deliver utmost sustainable environment to employees and customers. Apart
from this, the selected hotel may opt for centralized organization structure increasing level of
effective communication and coordination. It has further laid emphasis on regular auditing for
establishing secure value chain management.
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REFERENCES
Books and Journals
Armstrong, R. and Matters, R. T., 2016. Modern slavery: risks for the UK hospitality industry.
Progress in Responsible Tourism. 5(1). pp.67-78.
Bakhtiar, M. F. S. and et.al., 2018. HPWS Implementation in Five-star Hotels: Why Employees'
Perception Matter?.
Bartram, S. M. and Grinblatt, M., 2018. Agnostic fundamental analysis works. Journal of
Financial Economics. 128(1). pp.125-147.
Cheung, S. N., 2016. Economic organization and transaction costs. The new palgrave dictionary
of economics. pp.1-5.
Dimitrovska, A. and Gjorgieva- Trajkovska, O., 2019. Analysis of financial statements for credit
apprisal. Journal of Economics. 4(1). pp.9-17.
Farmaki, A., 2018. Corporate social responsibility in hotels: a stakeholder approach.
International Journal of Contemporary Hospitality Management.
Hasan, I. And et.al., 2018. Corporate social responsibility and firm financial performance: The
mediating role of productivity. Journal of Business Ethics. 149(3). pp.671-688.
Lui, T. W. and et.al., 2018. Online review response strategy and its effects on competitive
performance. Tourism Management. 67. pp.180-190.
Mitchell, J., Font, X. and Li, S., 2015. What is the impact of hotels on local economic
development? Applying value chain analysis to individual businesses. Anatolia. 26(3).
pp.347-358.
Morales- Díaz, J. and Zamora- Ramírez, C., 2018. The impact of IFRS 16 on key financial
ratios: a new methodological approach. Accounting in Europe. 15(1). pp.105-133.
Oduwusi, O. O., 2018. Succession Planning as a Key to Effective Managerial Transition Process
in Corporate Organizations. American Journal of Management Science and
Engineering. 3(1). pp.1-6.
Shara, Y., Muda, I. and Rujiman, R., 2019, January. Role of Organizational Commitment to the
Factor of Performance of Regional Financial Management. In 1st Aceh Global
Conference (AGC 2018). Atlantis Press.
Singh, N. and Ogbeide, G. C., 2018. Cost Benefit Analysis of Hotel Recycling Practices in India.
Events and Tourism Review. 1(1). pp.28-34.
Online
Human Resource Life cycle. 2017. [Online]. Available through:
<https://codeday.me/process/20171025/88048.html>.
Manufacturing and Non manufacturing Costs. 2018. [Online]. Available through:
<http://simplestudies.com/manufacturing-nonmanufacturing-costs.html>.
Double-entry Accounting System, 2018. [online]. Available through:
<http://simplestudies.com/double-entry-accounting-system.html/page/10>.
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