Financial Management and HR in Hospitality: Smoke & Salt Report

This report analyzes the hospitality business, focusing on financial management, human resources, and performance strategies. It begins with an introduction to the hospitality industry and examines Smoke & Salt's financial performance, including income statements, balance sheets, and financial ratios. The report also covers double-entry bookkeeping, trial balances, and cost accounting methods. Furthermore, it explores the HR life cycle, specifically recruitment, onboarding, and employee development for a bartender role, emphasizing talent retention. Finally, it proposes a performance management plan, including techniques to address negative staff behavior and resolve conflicts within the workplace. The report provides valuable insights into the operational and strategic aspects of running a successful hospitality business, offering tools and techniques for financial control, employee management, and overall business growth.

The Hospitality
Business Toolkit

Introduction
In today's world, the Hospitality industry is unitary of the fastest growing business
enterprise in the current scenario. Hospitality is one of the work branches which is having the
longest life in the environment. The hospitality industry is a group of business which focus on
providing the services to the customer all over the world.(owie, Buttle and Mariussen, 2016)
Under this report, discussion will be in the context of smoke& salt, located at Brixton offering
the food and beverages for its target customer is planing to expand its business at the
international path-form by managing the financial requirements and evaluating the needs to
manlike assets life cycle in the operation location. further their will be discussion of the
consequence of lawful and right consideration on the business organization.
LO1
P1 Investigate the principles of the managing and monitoring financial performance.
The business transaction carried out between two parties engaged in business for mutual
benefit in the present as well as in the long run. Their are different business transaction such as
purchase of raw material, sales of product and services, paying the wages and salaries to the staff
and raising the finance for operating day to day activities and movement of the cash in the bank
account. With the reference of Smoke&salt, uses financial statements to measure the
performance of their business from time to time. Management team of smoke&salt use different
techniques to determine the company financial such as financial gain statement, equilibrium
sheet and statement of currency flow and financial ratio to measure the performance :
Income statement : According to Generally accepted accounting principles, company
has to records its revenues and expense in the income statements and the recording of sales and
expenses on the accrual basis. (Altinay, Paraskevas and Jang, 2015)
Balance sheet: In this statement, companies possession and liabilities and shareholder
assets are stated for the specific time period. Assets are to be equal to the sum of the companies
debts and its shareholders equity.
Statement of cash flow: This statements shows the cash inflows ans outflows concluded
a period of time. This supply profits margins of the company for specific period of time. This
statements reveals whether the company have a positive or negative cash flow in the company.

Financial ratios: This ratios provide a way to measure the performance of the company
over the period if time. The financial ratios are used to evaluate the company liquidity in the
company, profitability of the activities, financial leverage in the company.
Net profit margin: It is common used for measuring the profitability of the company.
Net profit is a amount left over after paying all the expense and overhead including interest and
taxes.
Operating profit margin: This ratio is used to measure the efficiency of the operations
in the company. This also helps in calculating the liquidity of the company. Liquidity is very
important for paying of bills.
Current ratio: This ratio helps in showing that how much of assets is required to pay off
its liabilities. In the other words, it show how much assets should company have to repay the
liabilities.( HButed, Felicen and Manzano 2014).
Return of investment(ROI): This ratio show how much company earn return in respect
of its investment. This show the effectivenesses of the investment and compare the efficiency of
a various investment and select the investment which have a high ROI.
P2 Apply the double entry book-keeping system of debits and credits to record sales and
purchase transaction in a general ledger.
In the double-entry method, transaction are taped in status of debits and credits in the
general ledger. It is fundamental concept that states that every transaction has equivalent and
alternate effects in at most two contrary accounts and the sum of all the debits must be equal to
the amount of all the credits. With the reference of Smoke&salt, the accountant has to make use
of bookkeeping to record the transaction. Book-keeping is a way of measure, recording and
communication a firms financial information. Their are various different business transaction
which can be categorized under the possession, liabilities, stake, income, cost and gain&losses. It
is a are essential for the double-entry system, debits mention to the left side of ledger and credit
refers to the right side of the account. The balance is having debits equal to credit. It is book-
keeping is a concept that all affects two accounts in the financial accounting. In the general
ledger , there is recording of the two side of each transaction. The double entry in the purchase,
sale account, any sale in the outlet lead to increase in revenue of the organisation. The double-
entry makes a balance sheet made up of asset, liabilities and equity. The balance sheet is

equal because of its assets which will equal to the liabilities plus equity. Assets include all the
items such as inventory at outlets, cash and machinery at the resultant. Liabilities include
company owes to someone else. (Filimonau and Delysia, 2019)Each entry has a debit side and
credit side in the respected ledger. In the others worlds, asset account will increase debited and
will decrease when credited . It is maintain by recording the dealing in the software where
transactions are records automatic in the respected accounts, and another ways is to records the
activity in the manual in books. The manual methods are out dated as operation activities are
enhancing at the various stages which makes it difficult to record each and every transaction in
the books. The transaction are listed in the chronological order, by the amount value, and the
account affected, depending on the size and complexity of the business operations .
Inventory Book-keeping Debit Credit
inventory stock $100.0
payable account $100.0
Work in process stock $100.0
Raw material inventory $100.0
Finished good
work in process inventory
$100.0
$100.0
P3 Produce a basic trial balance applying the use of the balance off rule to compete the ledger.
A trial balance is a worksheet which include balance of all ledgers of the company to
see the whether they are mathematically accurate. It is listing of the accounts in the general
ledger with the debit and credit column and the amount of both the column should be equal. The
trail balance helps in identification the error happens in the making entry in the particular
account and keep the all the account have a proper and accurate balance and are posted to
respected account. The basic trail balance which shows the summarisation and categorised the

journal into respected ledgers. For the sample of trail balance, following is a sample of the trail
balance.
The budgetary control refers to method which is used by the manager to control the cost
and operations at the different levels. It is process which helps manager to set financial and
performance goals with the particular budget and compare the actual results and make best
decision for the organisation.(Harringto Chathoth and Altinay, 2014)
Their are various kind of cost connected with the production activities of the
organisation. Cost accounting is a procedure that measures the cost required in manufacture and
undertaking. Some of the types of cost are as follows:
Direct cost: it is basic to producing of goods and service such as raw material, labour,
overhead expense.
Indirect cost: It is cost which is unsuited to the production of products and service for
example, the electricity bill is indirect cost associated with the operations activity of the
company.
Fixed cost: it is a cost which is not vary with the different levels of activity in the
production process. This are the cost which remain constant in the activity such as rent expenses,
salary of worker are some of the example which remain same in respect of their activity levels.
Variable costs: It is cost which vary with the production activity , as it also increase with
the production activities. It can also decrease with the decrease in the production activity.
The different type of budget is prepared to forecast the performance of different activity at the
workplace. (Hassanie and Dale, 2019)
Cash budget is prepared to analyse the cash which is required in the completing the
given task. In the context of smoke&salt, the manager make cash budget to find out how much
cash is required to produced the product and service.
Master budget is prepared to measure the performance of overall business for the
specific period of time. It helps in anticipated performance of present as well as of coming years.

This budget helps in forecasting the performance of different department and focus on
improving the profits at different levels.
Pricing a product is a very important strategies and some of them which can be used by
Smoke&salt is as follows:(Ivasciuc, 2014)
cost-plus pricing: include cost and mark-up profit.
Competitive pricing: price is based on the competitive in the market.
Value -based pricing: price is based on how customer feel its worth.
Price-skimming: setting a high price and then lower it as a market changes.
Further there is control over inventory so that goods are available on time in the effective ways.
Their is physical verification to check the proper stock is maintain in the outlet
LO 2
P4 Review the different stages of the HR life cycle applied to a specific hospitality job role and
their important for retaining and developing talent.
In context, Smoke &salt, the HR manager are planning to hire bartender for the international
outlets. The company is growing at the different levels by following the recruitment process in
the different outlets. The HR manager follows the different stages in the hiring bartender in the
company.(Jones, Hillier and Comfort,2016)
Recruitment and selection: Under this process, the applicant applies to the vacant
position of bartender in the company. After that some of the application are shortlisted on the
ground of past experience, and knowledge regarding various different drinks. Some of the
selected applicant moves further in the selection process where there is face to face interview
with the HR manger, manager evaluate the applicant on the skills about the various beverages,
like how to make good quality of drink for the different customer having different taste and
preferences. Manager interact with the applicant for know more about their personality and see
if there is any issue in this stage of hiring. The issue can be that applicant can hind their past
risks at the bar while serving the customer or their will not have a good experience in this filed
which will further lead to issue in retaining the applicant in the organisation for the longer period
of time. But if they are provide with proper training in the company, then such applicant have a
long career in the Smoke&salt. (Kandampully, Zhang and Jaakkola, 2018)

On boarding and orientation: Under this stages, employees are providing on the job
training so that they can enhance their productivity at the workplace and learn new way to serve
its international customer. While there is also a orientation program to make employees familiar
with the policies of the organisation. The issue can be that employees already have some
experience in this field which lead to rigid behaviour of the employees and difficult to change in
such environment. This issue can be dissolve by having more interaction among the employees
as well as to the employers at the workplace.(Kim, Lee and Fairhurst,2017)
Exit and transition: Under this stage, employees are provided with the proper training
and development programs which makes employees ready for the serving the customer in the
most qualified way. The employees who complete the development programs are more likely to
hold in the organisation for the longer period. Employees are a part of the company as there are
aware about the organisation.
P5 Develop a performance management plan for a specific hospitality job role applying
techniques to resolve negative behaviour of staff.
The different presentation direction plan for different type organisation to solve conflict among
employees & with the employers. This plan include training and development, succession
planning which helps in retaining the staff for longer period. The succession planning helps in
dissolving the issue among the employees and with the employers. This plan helps in making
good working environment for the employees and helping them to understand the work policies
at the workplace. The HR manger make sure that there is multicultural and international team for
having mix working environment for the employees which further lead to retain-ion of the
employees in the organisation. To retain the employees the manager promote equality and
diversity at the workplace, everyone is treated equally at the work. The manager make use of
Human resource legislation to retain the employee in the organisation. (Lugosi,2014)
Equality law: According to this law, every employees of the organisation are treated
equal at the workplace. The employees belong to different culture and having different belief
system which can lead to conflict if not dissolved at the right time.
Working hours: According to this act , employees are required to work not more then
working hours for 8 hours and if work more then they should be paid their overtime.

Health and safety: The UK government has various different laws on the heath and
safety of the employees at the work place. Which make then a part of the organisation for the
long run.
Equal pay: according to this act, employees are giving equal pay for same position in the
organisation. Male and females are paid equal in accordance of their roles and duties at the
workplace.
LO 3
P6 Identify specific legislation that a hospitality organisation has to comply and adhere to.
With the context of Smoke and salt, the company make sure that there is a proper
relationship between the regulation, legislation and the standards in its management so that every
is aware about their roles and responsibilities so no dispute can arise in the company for the
present as well as the long term. ( Mariani Baggio and Höepken, 2018)
The environment legislation: In the context of Smoke&salt, the HR manager are
looking foe new bartender in their different location. Their is different working environment for
different location which are stated by the UK government so that work can be performed in
accordance of such laws. It is a accumulation of Laws and regulation concern to air prime, water
quality. This law covers many different regulation which makes them to work together towards
common goal and also include interaction between man and natural world.
Food safety legislation: According to food safety rules, company make sure that they
offers good quality of food to its customer which are approved by the investigator at the stores.
Their are different laws for UK market and the international market which are to be followed by
the company to give safe foods to its employee and for its customer to make good image at the
international market. (Nsabimana, Kabera and Namahoro, 2017)
Alcohol licensing: In the UK market, the licensing law restrict the sale of alcohol to
people aged 18 and below. but the company have a different laws to purchase alcohol and
having different variety of alcohol in their bar section. Some of the good quality of alcohol are
available only after fulling the required legalisation.

Consumer legalisation: under this act, consumer have a right to get food and beverages
at the companies outlet and have a right to pay fair terms for the product and service they
consume in the company.
The are various legalisation which are given to protect the data of the company like licence of
different food and beverages. Such rule and regulation should be confidentiality in the top -levels
of management team
P7 Illustrate how company, employment and contract law has a impact upon the business
decision-making in the hospitality industry.
The company law has a huge effect on the decision-making of the hospitality industry such laws
are ethical consideration at workplace.
Business ethics is a law that stated how company should behave at the organisation. It show a
way how employees and employers will behave in the company and have to follow the rules and
regulation.(Peters and Kallmuenzer, 2018)
Corporate social responsibilities: under this law,every company have a some responsibilities
towards its society as they make use of raw material available in the society. Such activities can
be planting in the parks, donating the food material to local people.
Further there are various employment law which help in making work environment a better
place for the organisation. These law has a impact on the decision-making regarding to working
condition and getting the set target on time in the effective ways.
The breaches of contact means dissolving the contact by any of the party of the contact on either
completion of the task or not performing according to term and condition.
The hospitality industry have a huge impact of legalisation in terms of company laws,
employment law. These laws effect the performance of decision making of top-level of the
organisation.(Singal, 2014)
L0 4
P8 Explore how different functional roles within the hospitality industry interrelate.
Their are various different structural department in the hospitality industry and have a
interrelation among these function. Some of the function are stated as follows:

Marketing function : marketing function is about the knowing the needs and wants of
the customer at different levels in the hospitality.
HR function: Under this function, the acquiring talent is very important for the
organisation as most suitable applicant is chosen for the company.
Finance department: Under this department, various financial statements are prepare,
cost controls are look after by making the budgeting and budgetary control.
These function are interrelated to each other have a impact on each other function which
influence the work environment of the organisation. (Sungkhamanee, 2014)
P9 Explain the different methods of communication, coordination applied within a specific
department of a hospitality organisation to strengthen the value chain.
Communication is the exchange of information between the people which helps in understanding
the needs of the customer and that of the owner of the company.
Communication with the customers: The hospitality industry is know for the service industry,
which needs to have a communication with the service staff so that they can provide good
service to its customer at larger scale.
Communication with the co-workers: The hospitality industry have a effective communication
with the staff and management so they can add value to service they provide to their target
segment. Their is proper coordination among different department of the hospitality industry and
they have a proper authorises to perform their duties and responsibilities which is associated
with the designation given to them. Their is effective partnerships with the vendors and
distribution channel so that value chain can be perform better in their function.
CONCLUSION
As per above discussion, it can be conducted that hospitality industry has a good market
in the merging market. This industry has to look after financial preparation of the accounts to
have a proper functioning in the organisation. Further their should be good HR life cycles in the
work environment to have effective services can be provided to its customer. Various legal laws
are to be followed to have a proper function in the company.

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