University Hospitality Report: Cost Control and Financial Management

This report presents an analysis of cost control and financial management practices within the hospitality industry, specifically focusing on the Kokoro fast food outlet. The report is based on an interview with the CEO of the restaurant, exploring the management of front-of-house and back-of-house operations. It examines the cost control measures implemented in these areas, including the use of technology and automation to minimize expenses. The report also delves into the financial control methods employed in daily business operations, such as monitoring accounts, managing customer payments, and overseeing daily expenditures. The findings highlight the importance of maintaining a balance between operational efficiency and cost-effectiveness, emphasizing the significance of technology, supplier relationships, and meticulous financial tracking for ensuring the smooth and successful operation of a hospitality enterprise.

Running head: HOSPITALITY
Hospitality
Name of the Student
Name of the University
Author Note

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Evaluation of the interview findings
Type of hospitality enterprise managed
According to Pizam, Shapoval and Ellis (2016), the hospitality industry has five several
sectors under it. Among them the most crucial is the food and beverage sector. Located 10 km
away from the main city, in the suburb area of the Canberra, Kokoro fast food outlet is one of the
most popular restaurant that offers Japanese fast food. The two most important persons
associated with the foundation of the restaurant are the CEO, Mr. Park and the Chief Chef Akio
Ishito.
Cuisine offered by the restaurant and the reasonability of the cuisine
Situated in the Australian suburb area, the restaurant gives its customer the opportunity to
savor the authentic Japanese fast food according to the growing demand of Japanese food. It
caters the special Japanese dishes like Sushi not only to the Japanese people residing there but
also it satisfies the Australian people’s love for Japanese people. The restaurant mainly offers
Japanese fast food upgrade their menu in a frequent manner with an aim to attract new customers
to visit the restaurant.
Front of house operation
The operation of the front house refers to the activities of management and the
maintenance of each area within the restaurant premise. The areas under the maintenance of front
house operation include each place which are used and accessed by the customers. For example,
the dining space, restroom, washroom, and bar along with the front desk fall under the areas to
be maintained by the restaurant (Sachs et al. 2014). As customers have the access to use the

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areas, it is extremely crucial to manage the operation as well as the maintenance of these areas in
order to maintain precision there. The activities of front house operation mainly includes the
service providing to the customers, exceeding the satisfaction of the customers while recruiting
efficient staffs, training them as well as manage them (Günzel and Holm 2013). Apart from these
activities, there are several other activities under the front house operation such as interior
designing, creating an ambience and maintaining an ambience in order to attract and retain the
customers. Meanwhile, setting of promotional strategies as well as the keeping the record of the
account and the stocks also comes under the activities of operation management of front house
(Rowbotham, Azhashemi and Galloway 2012).
Cost control of front house
As per the script that has been enclosed in the appendix section, Kokoro restaurant have a
large variety of the front house operation which have been sometimes merged or undertaken
collectively so that the cost of front house operation management are minimized. Such as, the
cost of human resource is easily minimized by the implementation of self service and the
automation system (Walker and Walker 2016). All the more, the latest technology for the
activities like cleaning, maintain the decoration, billing and review generation from the
customers will be an effective way for managing the cost as well as reducing it.
Back of house operation
Like front house operation, the back of house operation involves the activities of
management of the operation in the kitchen (Sachs et al. 2014). As kitchen is most crucial place
of a restaurant where raw materials as well as the ingredients are transformed into the delicious
complete dishes and served to the customers by the efficient staffs, operations management
concerned this area is extremely important as well as equal to the front house operation. The

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activities of back house operation include the mainly the maintain ace of code of conduct so that
the quality food can be served to the customers in order to build the trust of the customer while
maintain the branding of the restaurant (DiPietro et al. 2012). The management of the supply
chain also falls under the activities of back house operation. Thus cost control of those above
mentioned activities important.
Cost control of back house operation
As per the script that is attached in the appendix section, it is seen that the cost control
management activities include primarily the efficient management of supply chain. The cost can
be reduced or minimize and managed by making a good relation with the suppliers so that the
raw materials or ingredients used in making a finished dish can be obtained at a lower price
(Ferguson and Souza 2016). By reducing the cost involved in supply chain management, the
restaurant can generate more profit as well. In addition to that, essential equipments and
machineries can obtained at lower from such suppliers on the basis of contract in order to control
the cost involved in the back house operation. In addition to that technology based gadgets must
be used in order to reduce the cost of human resource (Ma et al. 2012). The allocation of work
among the staffs of back house can be computerized so that time as well as cost can be saved.
Latest technology enabled infrastructure in the processing of the finished food with the aim of
reducing the cost.
Financial control measures in daily business operation
As per the statement of the CEO of Kokoro fast food outlet observes, the financial
activities on a daily basis should be monitored. Thus the monitoring will must include the
supervision of the many deposited in bank, the financial activities like bill payment from the
customers, daily expenditure in purchasing of the raw material front and so on (Melnick et al.

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2012). Computerized billing system in form of proper invoice and other technology based
financial tools must be used in order to ensure the efficient processing of financial activities
(Pizam 2012). Thus the restaurant must keep the track on the investment occurred on timely
manner in order to assure the cash flow.

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References
DiPietro, R.B., Crews, T.B., Gustafson, C. and Strick, S., 2012. The use of social networking
sites in the restaurant industry: Best practices. Journal of Foodservice Business Research, 15(3),
pp.265-284.
Ferguson, M.E. and Souza, G.C. eds., 2016. Closed-loop supply chains: new developments to
improve the sustainability of business practices. CRC Press.
Günzel, F. and Holm, A.B., 2013. One size does not fit all—understanding the front-end and
back-end of business model innovation. International Journal of Innovation
Management, 17(01), p.1340002.
Ma, J., Qin, J., Salsbury, T. and Xu, P., 2012. Demand reduction in building energy systems
based on economic model predictive control. Chemical Engineering Science, 67(1), pp.92-100.
Melnick, E.L., Nayyer, P.R., Pinedo, M.L. and Seshadri, S. eds., 2012. Creating value in
financial services: Strategies, operations and technologies. Springer Science & Business Media.
Pizam, A. ed., 2012. International Encyclopedia of Hospitality Management 2nd Edition.
Routledge.
Pizam, A., Shapoval, V. and Ellis, T., 2016. Customer satisfaction and its measurement in
hospitality enterprises: a revisit and update. International Journal of Contemporary Hospitality
Management, 28(1), pp.2-35.
Rowbotham, F., Azhashemi, M. and Galloway, L., 2012. Operations management in context.
Routledge.

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Sachs, C., Allen, P., Terman, A.R., Hayden, J. and Hatcher, C., 2014. Front and back of the
house: Socio-spatial inequalities in food work. Agriculture and Human Values, 31(1), pp.3-17.
Walker, J.R. and Walker, J.T., 2016. Introduction to hospitality management. Prentice Hall.

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Appendix
The Script –
Interviewer – Kokoro has been operating for quite some time now. How do you ensure the
smooth and efficient running of the restaurant?
Mr. Park - As the Chief Executive Manger of this and many other outlets, I think it is very
important to keep a good balance in between the operations on the front and back office as well
as the variety of food and quality of food offered to the customers.
Interviewer- What is the most important aspect of controlling the costs of the front house
operations as per your discretion?
Mr. Park - The most important aspect of running the front and back office operations involve
activities that help reduce the costs of operations and help in financial analysis so that the
objectives are regularly reached based on the business plans in place. I think that for both front
and back office operations it is very important to apply the usage of the most up to date
technology and automation so that a lot of work can be completed in a comparatively shorter
span of time and with less cost incurrence. Further in the context of back of the house operations,
it is important to note that the relations maintained with the suppliers and the cost of the raw
materials used from the supply chain, should be maintained in order to keep the costs under
check.
Interviewer – Apart from these what are the other activities that are important to be monitored on
a daily basis in order to ensure smooth financial functioning of your restaurant?

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Mr. Park - I think keeping a check of the accounts, especially the stocks and the payments from
the customers maintaining the customer accounts accurately and also keeping a check on the
daily costs is very important.