LO1: Investigate how to manage finance and record transactions to minimise costs responsibly within the hospitality sector

The Hospitality Business Toolkit (Unit 4)

Introduction

Everyone needs to understand the business – not just their own part of it but how all the different aspects link together. The actions of a hospitality manager can have an impact on other areas, and their actions can affect interrelationships with those departments, so students will need to understand all this and be able to take effective, informed decisions.

 

Many hospitality managers are at ease with the customer service side of the hospitality business, but are less comfortable diving into the financial side of things.  Yet to be a successful hospitality manager, you must know how to control your department or property’s finances responsibly and effectively.

 

Every business requires its future leaders to have a level of understanding of key factors to drive both profitability and brand success. Using tools such as human capital, planning to recruit and retain the best staff, to interpreting and applying financial key indicators to drive profitability or gain market share. 

 

This unit is designed to provide students with key skills for becoming competent managers in a hospitality environment; this will allow them to understand key principles with regard to key performance indicators both financial and non-financial. 

 

This unit aims to give students the opportunity to develop their business acumen, covering a number of different business activities applied within the hospitality industry context. These include forecasting and budgeting, interpreting financial statements, recruitment and retention of staff, effective communication and dealing with legislation and regulation.

 

The assessment will be undertaken drawing on learners’ different skills to include both written and practical activities; the work will be undertaken both individually and in groups.

 

By the end of the assessment, students will have demonstrated an understanding of key business principles and practices, including:

• Financial aspects of hospitality
• Human Resources
• Legislation and the law

Effective communications

Task  1:  Report

Unit Learning Outcome:   LO1: Investigate how to manage finance and record transactions to minimise costs responsibly within the hospitality sector

Scenario and Activity:

 

You have opened your own business, which is turning into a thriving enterprise at Bishops gate in London EC2N.  Your specialism is inventive, healthy salads, which you are serving with a range of blended juices and smoothies.

You are delighted to find that a gymnasium has opened next to you, which is bringing in additional trade.

You are also fortunate that you have a business mentor, who is available to provide business advice to help your business grow.  The mentor also helps by testing your knowledge through a series of regular questions and challenges that they set you.

Currently you are exploring with your mentor ways to increase evening sales.  One of your ideas is to take your range of juices and smoothies, and blend these with alcoholic spirits to create a healthy alternative to the nearby wine bar.  Your mentor thinks this is an excellent idea, but starts by challenging some of your financial controls.

 

In producing the report you will :

• Provide an introduction to the financial transactions of your hospitality business by identifying the types of source documents and the recording processes you  follow.
• Explain the principles of double entry bookkeeping system of debits and credits, using your personal income and expenditure for a month as an example.
• Demonstrate the need for an accounting report  and present a Trial balance using a sample data, stating the steps used  and purpose of  the Trial Balance, using examples throughout.
• Analyse types of Cost  and , say how they can be managed to influence the financial performance of your business and evaluate the importance of accurate recording  of transactions in line with accepted accounting principles .

Include a conclusion that critically evaluates the role of financial management and monitoring  in achieving positive growth in your business; include your own recommendations.