ABC Catering: Financial Management, HR, and Legal Aspects Report

This report analyzes the financial performance and HR practices of ABC Catering, a hospitality business. It includes an introduction to the hospitality industry, followed by a task-based analysis. Task 1 focuses on the principles of managing financial performance, including timelines, consistency, coordinating finance, and understanding risk, along with an application of the double-entry system, and preparation of ledger and trial balance. Task 2 covers the application of the HR lifecycle and development of a performance management plan. Task 3 examines legislation related to hospitality organizations and the influence of employment and contract law on company decision-making. Task 4 explores various functional roles and their interrelationships, and different ways of communication within an organization. The report concludes with a summary of findings and a list of references.

Hospitality Business
Toolkit

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Principles of managing financial performance .....................................................................1
P2 Application of double entry system.......................................................................................2
P3 Prepare trial balance ..............................................................................................................9
TASK 2..........................................................................................................................................10
P4 Application of HR Life cycle ..............................................................................................10
P5 Develop performance management plan.............................................................................11
TASK 3..........................................................................................................................................13
P6 Legislation related to hospitality organisation ....................................................................13
P7 Influence of employment and contract law upon decision making of company ................14
TASK 4..........................................................................................................................................14
P8 Various functional role and its interrelationship .................................................................14
P9 Different ways of communication within an organisation ..................................................15
CONCLUSION .............................................................................................................................17
REFERENCES .............................................................................................................................18
.......................................................................................................................................................18

INTRODUCTION
Hospitality is the process of maintaining or building relationship between guest and a
host, wherein their core function is to bring high level of satisfaction to customer by providing
best quality of product. It is broad category of fields within service industry which involves
accommodation, restaurants or bars, event planning, theme park, transportation, cruise line and
additional fields within the travel and tourism sector. Along with this associated with different
skill and departments to fulfil the customer or guests demand in order to achieve success within
competitive service industry (Bergene, Boluk and Buckley, 2014). IN regard of this report, ABC
catering is considered which is well known for events like birthday parties, weddings and family
gathering. This study includes preparing of journal, trial balance and ledger to ascertain financial
performance of company, developing a HR life cycle as well as performance management plan.
Moreover, laws related to hospitality sector and its impact over firm decision making capability.
Finally, interrelationship between several business function of an organisation is also discuss in
this report.
TASK 1
P1 Principles of managing financial performance
It is one of the essential attribute of an organisation as it helps them to implement
decision towards maximization of value of firm. However, it is the procedure of planning,
organising, directing, controlling in order to accomplish company goal or objective in an
appropriate way. However, monitoring and governing the financial performance of company
help them to analyse its overall position among competitive marketplace. However, some of the
principles which ABC Catering applies to manage its financial performance are as follows:
Timelines: This is concern with providing relevant information to client or users at the
time of requirements so that it help them to make best strategic decision as well as it protects
their data safely. Thus, ABC Catering should apply the same in order to maintain its relevancy
and accuracy among employees and stakeholders for attaining high productivity.
Consistency: Under this, it encouraged ABC Catering to record its transaction on daily
basis so that they can control over confusions or disputes within business premises. Moreover,
they should monitor their financial performance and based on that make corrective course of
action in favour of firm's proficiency.
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Coordinate finance: In this, ABC Catering should take initiative to track its sources of
finance like credit cards, bank accounts, retirement loans in order to maximise wealth and profit
in a better manner. Moreover, they can also adapt budgeting software which makes firm work
more easier and they can easily track all accounts and settle all payments on time without any
delay.
Understand risk: It is one of the common factor in every organisation which lead them to
enrich their profitability ratio. Thus, ABC Catering should take step ahead to examine all
challenges and develop productive strategies in order to tackle it and obtain increased level of
profit margin (Cooper and et. al., 2019).
P2 Application of double entry system
It is very productive tool to ascertain financial performance of ABC Catering as it contain
two entries i.e. debit and credit transaction. Thus, firm evaluates its total funds by applying
several tool of accounts that is mentioned below:
Ledger
Accounts
Cash Account
Date Particulars £ Date Particulars £
01/05/19 To Capital 30000 02/05/19 By Store Rent 1000
03/05/19 By Purchase A/c 10000
04/05/19
By Accident
insurance policy
account 1200
06/05/19 By Laundry Fees 200
07/05/19
By Telephone and
Internet expenses 2220
08/05/19
By Rates, water
and refuse a/c 950
09/05/19 By Wages and 1740
2

salaries
31/05/19 By Balance c/d 12690
Total 30000 Total 30000
Purchase Account
Date Particulars £ Date Particulars £
03/05/19 To Cash 10000
03/05/19 To Account Payable 15000
05/05/19 To WH Adams Ltd 15000
31/05/19 By Balance c/d 40000
Total 40000 Total 40000
Capital Account
Date Particulars £ Date Particulars £
31/05/19 To balance c/d 30000 01/05/19 By Cash 30000
Total 30000 Total 30000
Store Rent Account
Date Particulars £ Date Particulars £
02/05/19 To Cash 1000 31/05/19 By Balance c/d 1000
Total 1000 Total 1000
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Accident insurance
policy Account
Date Particulars £ Date Particulars £
04/05/19 To Cash 1200 31/05/19 By Balance c/d 1200
Total 1200 Total 1200
Laundry fees Account
Date Particulars £ Date Particulars £
06/05/19 To Cash 200 31/05/19 By Balance c/d 200
Total 200 Total 200
telephone and internet
Account
Date Particulars £ Date Particulars £
07/05/19 To Cash 2220 31/05/19 By Balance c/d 2220
Total 2220 Total 2220
Rates, water charges
and refuse Account
Date Particulars £ Date Particulars £
08/05/19 To Cash 950 31/05/19 By Balance c/d 950
Total 950 Total 950
Wages and salaries
Account
Date Particulars £ Date Particulars £
09/05/19 To Cash 1740 31/05/19 By Balance c/d 1740
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Total 1740 Total 1740
WH Adams Ltd
Date Particulars £ Date Particulars £
31/05/19 To balance c/d 15000 05/05/19 By purchase 15000
Total 15000 Total 15000
Beverage Account
Date Particulars £ Date Particulars £
11/05/19 To sale 13000 31/05/19 By Balance c/d 13000
Total 13000 Total 13000
Food Account
Date Particulars £ Date Particulars £
10/05/19 To sale 20000 31/05/19 By Balance c/d 20000
Total 20000 Total 20000
Sales Account
Date Particulars £ Date Particulars £
01/05/19 To balance c/f 33000 10/05/19 By Beverage 20000
11/05/19 By Food 13000
Total 33000 Total 33000
Journal Entries
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Date Particulars Debit Credit
01/05/19
Cash a/c Dr
To Capital a/c 30000 30000
02/05/19
Store Rent a/c Dr
To cash a/c 1000 1000
03/05/19
Purchase a/c Dr
To Cash a/c 10000 10000
03/05/19
Purchase a/c Dr
To Account Payable a/c 15000 15000
04/05/19
Accident insurance policy a/c Dr
To Cash a/c 1200 1200
05/05/19
Purchase (food supplies)a/c Dr
To WH Adams Ltd a/c 8000 8000
05/05/19
Purchase (Beverages) a/c Dr
To WH Adams Ltd a/c 7000 7000
06/05/19
Laundry fees a/c Dr
To Cash a/c 200 200
07/05/19
telephone and internet a/c Dr
To Cash a/c 2220 2220
08/05/19
Rates, water charges and refuse a/c Dr
To Cash a/c 950 950
09/05/19
Wages and salaries a/c Dr
To Cash a/c 1740 1740
10/05/19
Food a/c Dr
To Sales a/c 20000 20000
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11/05/19
Beverage a/c Dr
To Sales a/c 13000 13000
Profit and Loss Account
Under
marginal
costing
Cost per
unit
Direst Material ($7*5) 35
Direst Labour ($8*4) 32
Variable O/H 5
Marginal cost per unit 72
Selling price 100
-Marginal cost per unit -72
-variable selling price -4
Contribution per unit 24
January
Sales (10000*100) 1000000
Cost of sales:
Opening inventory 0
Material (14000*35) 490000
Labour (14000*32) 448000
Variable o/h (14000*5) 70000
1008000
-Closing inventory (4000*72) 288000
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720000
280000
-Variable selling cost (10000*4) -40000
Contribution 240000
-Fixed costs -24000
-Fixed selling expenses -3000
Actual Net profit/(Net Loss) 213000
February
Sales (12500*100) 1250000
Cost of sales:
Opening inventory (4000*72) 288000
Material (10500*35) 367500
Labour (10500*32) 336000
Variable o/h (10500*5) 52500
900000
-Closing inventory 144000
756000
494000
-Variable selling cost (12500*4) -50000
Contribution 544000
-Fixed costs -24000
-Fixed selling expenses -3000
Actual Net profit/(Net Loss) 571000
Accounts for BluSky Ltd (Extracts) 2017 2016
£’000 £’000
Turnover 2500 2200
Cost of sales 1250 1040
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Gross profit 1250 1160
Distribution costs 40 148
Administration costs 668 595
Operating profit 542 417
Interest payable 20 19
Profit on ordinary activities before taxation 522 398
Tax on profit on ordinary activities 0 10
Profit/(loss) for the financial year 522 388
Statement of Financial Position 2017 2016
£’000 £’000
Non-Current assets
Tangible assets
800
781
Current Assets
Inventories 345 139
Trade Receivables 355 295
Cash 45 114
Total Current Assets 745 548
Current Liabilities
Trade payables 375 300
Bank overdraft 170 40
Total Current liabilities 545 340
Non-Current Liabilities
Long term loans 200 211
Net Assets 800 778
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