Financial, HR, Legal and Operational Analysis of Hospitality Business

This report delves into the multifaceted aspects of the hospitality business, focusing on financial management, human resources, and legal considerations. It begins with an introduction to accounting principles, including the double-entry system and cost classifications, essential for understanding financial performance. The report then examines the importance of the HR lifecycle, from recruitment and selection to separation and termination, highlighting the significance of each stage. A performance management plan is proposed to address communication and time management skill gaps within Intercontinental Hotels and Resorts. Recommendations are provided for improving the HR lifecycle and ensuring compliance with relevant legislation. The report emphasizes the role of financial management in accurate transaction recording and the impact of company employment and contract law on decision-making within the hospitality industry. The report concludes with an overview of the Intercontinental Hotels and Resorts business, emphasizing the importance of maximizing profit, effective resource utilization, and the role of financial management in achieving organizational objectives.

The Hospitality
Business-Toolkit

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Activity 1.....................................................................................................................................3
Source Documents .....................................................................................................................3
Principles of managing and monitoring financial performance .................................................4
Principles of Double entry system .............................................................................................5
Classification of cost ..................................................................................................................6
Activity 2.....................................................................................................................................7
Importance of HR life cycle .......................................................................................................8
Performance Management Plan .................................................................................................8
Recommendation on Human Resource Lifecycle ......................................................................9
Legislations of Hospitality Industry............................................................................................9
Effects of company employment and contract law which influences decision making ..........10
Implication of regulations ........................................................................................................11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Maximisation of profit is the core aim of every business organisation. It is needed to understand
every aspect of business organisation in order to remain competitive and attain organisational
objectives in a time frame period. Optimum utilisation and controlling all company's resources
helps in eliminating wasteful activities along with reduces cost. Business can enjoy higher profit
by maintaining and controlling expenditure in order to elevate profit margin. There are various
aspects of business and it is needed to understand so that it becomes easier to accomplish
objectives(Weygandt,et.al., 2019).This project report is based on Intercontinental Hotels and
Resorts, a British multinational hospitality company, headquartered in Denham, England. It will
cover various financial aspects of hospitality, human resources, laws and legislation and effective
communication importance. In addition to that, it will involve principles of double entry book
keeping system and types of cost which may influence financial performance. Further, it will
involve Human Resource Lifecycle along with its evaluation.
TASK
Activity 1
Accounting may be defined as the process of recording and analysing the financial and non
financial transactions in order to evaluate company's performance. It is important to measure
financial position so that corrective measures can be taken for betterment. Financial transations
may be referred as an agreement6 between a buyer and seller for exchange of goods and
services. Accounting plays crucial role in defining success of every business organisation as it
facilitates in tracking of income and expenses along with ensuring statutory compliance which
helps management of Intercontinental Hotels and Resorts in making decision.
Source Documents
 Bank Statement -It contains various number of adjustments of cmpany's book balance of
cash on hand and at bank. Company can bring alignment in its records and can maintain
liquidity and cash at bank.
 Credit card receipt -It can be used as evidence as disbursement of funds from petty cash.
Company can rotate its cash into various activities and manages cash at demand.
 Sales order - It can be used as an evidence of purchase of products and material for
company.

 Time card -It supports the issuance of paycheck to an employee. If the employee hours
are billed to customers, then it also helps in supporting in creation of customer invoices.
 Quotes -It is one of the report which company gives to nterested clients in order to outine
prices of products used in company.
 Receipts -It is important to record all receipts of customers who have visited Hotels in
order to provide better customer experience by getting insights.
Principles of managing and monitoring financial performance
 Consistency -All the transactions must be handled in a consistent manner as policies and
procedures must be established in order to address similar types of transactions in a
routine manner.
 Timeless -All the transactions must be handled within time frame period outlined. For an
accounting year, financial statements must be prepared within time(WarrenJonick and
Schneider,2020).
 Justification -It is needed to have valid reason which supports project's goals along with
adheres to guidelines.
 Documentation -It is important to have sufficient documents which helps in supporting
transactions. All the documentation must be retained and organised for audit purpose.
 Certification – All the certification are to be approved and carry out all signatures.


Principles of Double entry system
It is an accounting system which is used to record transactions having minimum two accounts. It
is based on dual aspect which is debit and credit. Following are three principles of double entry
system.
 Debit the receiver and credit the giver.
 Debit what comes in and credit what goes out.
 Debit all expenses and credit all income.
It is important to keep in mind all above three rules of double accounting. Whenever a
transaction takes place, accountant have to debit the receiver and credit the giver(Suk,
2018).Follwoing are some Journal entry of double entry transactions.
Salary Paid - Salary a/c Dr $5000
To Cash $5000
Electricity Bill paid - Electricity Bill a/C Dr $1000

To Cash $1000
Classification of cost
 Material cost -These are the cost material which can be used in production of goods. It is
divided in various categories such as spare part cost, cost of packaging and raw material
cost.
 Labour cost – It consist of wages and salaries paid to either temporary employees or to
permanent employees for manufacturing of products.
 Expenses -It involves all expenses which are associated with making and selling of
goods and services.
Classification by Functions
 Production Cost -These type of cost is concerned with manufacturing of goods.
 Commercial cost -It involves admin, selling and distribtion cost or all cost other than
manufacturing cost.
Classification by Traceability
 Direct Cost -It is the cost which is directly linked with production of goods and services.
It can be traced to cost object.
 Indirect cost – These cost are cost of running business and going to market with a
commodity. In simple words, it can be said that they are not directly linked to making of
product or service.
Classification by Normality
 Normal cost -It is a part of cost of production and of costing profit and loss. These are
cost which a company incurs at normal level of output in standard condition.
 Abnormal cost -These type of cost is not incurred normally at a certain level of output. It
is against charge of profit and loss and not considered as a part of cost of production.
Role of Financial Management and accurate recording of transactions
it plays an important role as it helps in reflecting actual financial position of company by using
various tools( Reid and Myddelton,2017). It is important to evaluate performance of company so
that corrective measures could be taken in order to attain organisational goals. Monitoring all
activities of management ensures that all the functions are carried out according to pre
determined plans or not. It makes business function smoother. In case of Intercontinental Hotels
and Resorts, It helps in tracking of cost and helps in allocating financial resources in such a

manner which yields higher profit. It is important to record accurate transactions so that correct
performance can be measured. Company have to record transactions with rules of accounting
principles.
Activity 2
The Human Resource Cycle may be considered as employee journey within company and starts
at very first day and ends at termination of employment. It helps in ensuring right candidate for
right job role. It bis needed to manage workforce effectively so that tehyc an contribute their
efforts in accomplishment of objectives. Following are the stages of Human Resource Life Cycle
.
 Attraction, recruitment and selection -Attraction starts before company is looking for
young talent. Brand Marketing and word of mouth plays an important role in shaping the
opinion of public. While on the other hand, recruiting encompasses with building good
candidate in order ensure that company have best potential candidates. It is important to
select best talent candidate which have ability to enhance performance of company and
makes it easier to attain objectives.
 Induction, orientation and onboarding -In this stage, employee and employer layout their
expectation and it is important to ensure new candidate is inspired for his role and feels
comfortable in new culture(Kadir, Yusof and Wahab, 2020).They are to be welcomed,
valued and equipped in order to do right job. By conducting induction, it will help new
employees in awaring about environment and culture of company.
 Career Planning and development -It is important to provide opportunities to employees
for their self development for their growth. It involves how to deal with performance
management. Employees must be rewarded for their accomplishment and for their
valuable contribution towards attainment of objectives. It will help in talent acquisition
and retaining existing employees so that work can be done in an effective and efficient
manner. There are numerous benefits of career planning and development as it facilitates
in boosting productivity and higher profit generation. In case of Food and Beverage
industry, It is important to retain existing employees as they are aware about company's
culture and understands customer needs and demand along with providing feasible
solution to their concerns.

 Retention -Company incurs lots of time and efforts in every stage of human resource
lifecycle and loosing an employee means it have to start again. So it is needed to retain
employees so that company can save additional expenses which will be incurred in
hiring new employee. Company have to focus on providing essential tools which can help
employee in self development and promotes career opportunities (Moskalenko, 2018). It
can be done by creating foster environment so that employees feel positive and
comfortable while working.
 Separation and Termination – It is needed to understand why people are leaving
organisation which helps in retaining other employees by taking corrective measures. By
having conversation with employees, it help in building positive atmosphere by leaving
door open for good employees to come.
Importance of HR life cycle
Human Resource Manager plays a vital role in making company more successful. Human
Resource lifecycle helps in motivating people by building foster environment so that employees
can work comfortably. It facilitates in improving productivity of employees by progression of
employee's ability and skill set by providing training sessions. Each stage of lifecycle is
important for company to be considered as it will help in elevating job satisfaction(Mone and
London). It also facilitates in employee engagement and they can contribute their valuable efforts
towards attainment of goals. It is needed to formulate strategies and policies in order to eliminate
obstacles of self development.
Performance Management Plan
Performance management plan may be defined as a systematic approach of planning and
formulating right approach in order to achieve desired objectives by individual or group of
individuals. It is important to assess performance of employees so that corrective measures could
be taken for betterment of company. The performance management plan involves all those
objectives which improvement is needed. It facilitates in providing clarity about company's
objectives and mission statements of company so that their efforts will meet goals. Following is
the formulation of performance management plan.
In case of Intercontinental Hotels and resorts, it is needed to identify the key areas in which
employees are lacking. After conducting a brief research, it was concluded that employees are

lacking in communication and time management skills which is important in hospitality industry.
So in order to eliminate this obstacle, it is important to conduct training sessions so that they can
effectively communicate with customers in order to provide better customer satisfaction. By
improving communication skills, employees can effectively address problems and concerns of
customers and takes immediate action on their issue (Cattermole, 2019).The other issue that
company is facing is time management skill which plays an important role in making company
successful. As in case of high demand, it may fail to provide better customer experience and did
not meet expectation of customers. It is needed to pre arrange all task prior to the arrival of
customer. It makes their journey convenient and smooth processing.
In order to eliminate obstacle company can manage time in an effective way so it would not face
any trouble at time of high demand. They can maintain time log so that it becomes easier to
manage their time across various activities.
Recommendation on Human Resource Lifecycle
On the above statements, it is needed to take corrective measures in steps of HR lifecycle.
Company should opt structured procedure of recruitment and selection so that they can hire right
candidate for right job position. By selecting right candidate, it will help in attaining
organisational goals before meeting deadlines. Company should formulate effective rules and
regulations so that employees can feel comfortable rather than frustrated. It will help company in
retaining existing employees along with attracting new candidates in company(Barth and
Barber,2017).By providing training sessions to employees, it can help employees in enhancing
their skills and making them more productive.
Legislations of Hospitality Industry
There are various rules and regulations which are formulated by UK government and compan y
have to comply with all laws and legislation in order to smooth functioning of business
organisation. Some of the legislations are discussed below.
 The Health and Safety at Work Act,1974 -This law lays down that there should be safe
working environment along with looking out for the welfare of employees. It involves
general duties of employer and employees for maintaining safety within organisation. In
case of Intercontinental Hotels and Resorts, it have all health and safety precautions
which is needed in their work. Emergency first aid kit is provided within premises so that
in case of mishappening, immediate remedies can be taken(Owen,2020).The management

of hotel regularly review performance and ensures all mandatory checks. As the
pandemic have affected whole hospitality industry and company have taken all
precautions related to sanitization and cleaning.
 The Adulteration of Food Act,1872 – Under this law, there are various tests which are
needed to be done of the food that company is providing to their customers. The main
reason of test is to ensure that whether company is using harmful substance or not or is
all claims are justified or not. It is done for the safety of customers and to minimise
exploitation of customers. For Intercontinental Hotels and Resorts, it is needed to comply
with all rules and regulations of this act. An inspection is conducted and by passing all
stages of test, company can be in safer side as in case of found harmful chemical used, it
may be penalised (Reese,2018).It will help company in maintaining quality of products
along with reputation in competitive market. The government body appoints team to
inspect their food and on successful completion, they can serve further to customers.
 Safety Regulation Act -It is important for company to have properly installed fire
extinguisher and gas pipelines in order to eliminate risk of accident. It will help in
preventing leakage and management of hotel regularly checks gas appliance and have all
necessary arrangements.
Effects of company employment and contract law which influences decision making
Whether a company is big or small, decision making is important and carries consequences. By
taking wrong decision, company can suffer loss and decline in profitability. It may affect
performance of company too. So it is important to comply with all laws and legislations of
company in order to smooth functioning of company. There are various legislations of
employment law which affects in making decision. It encompasses different aspects such as
opting channel for job vacancy, recruitment and selection process, onboarding process. The core
aim for this law is to prevent employees from malpractices and maltreatment. It also facilitates in
maintaining flexibility in employment as well as ensures high level safety of workers(Thakur,
et.al.,2019). Employers can sue to their employers for injustice and for unjustified deed. It helps
company in avoiding complexities and to formulate effective decision in order to operate
business in a smoother way. While on the other hand, contract law helps in delivering guarantee
by following a structured procedure along with providing clarity of employees requirement. By
following all clauses of contract helps company in achieving pre determined goals. Business

contracts are crucial as they provides legal protection to all parties which are involved in chain of
transactions. It ensures that manager is having all rights and obligations of agreement. The
management of Intercontinental Hotels and Resorts are having contract with their suppliers for
their business operations.
Implication of regulations
The hotel complies with all rules and regulations of Health and safety Act and Food Adulteration
Act. Its main aim is to provide better customer experience along with providing all precautions to
employees(Meghwal, et.al.,2022).It will help company in elevating reputation and increased
profitability. Company regularly checks and monitors all precautions. It uses quality products
and ingredients in their dishes.
CONCLUSION
From the above report, it was concluded that Human resource lifecycle plays an important role in
company as it facilitates in structuring framework for employees so that they can hire and retain
existing candidates for job position. Accounting is helpful as it helps in reflecting actual
performance of company so that corrective measures can be taken to improve profitability and
productivity of company. It is needed to comply with all laws and legislations of hospitality
industry formulated by government or it may be penalised for non compliance.

REFERENCES
Books and Journals
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industry. John Wiley & Sons.
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Kumar, N., Katariya, L., Meghwal, K. and Mahalakshmi, S., 2022. Food Adulteration: A
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Global.
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