The Hospitality Business Toolkit

Managing hospitality organisations

Table of Contents

Introduction 3

LO1 Investigate how to manage finance and record transactions to minimise costs responsibly
within the hospitality sector 4

LO2 Manage the Human Resource (HR) life cycle within the context of HR strategy 10

LO3 Potential impact of the legal and ethical considerations on a hospitality organisation
11

LO4 Importance of coordinating and integrating various functions of departments within the
hospitality sector 13

Conclusion 15

Bibliography 16

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Introduction

Hospitality organization earns its profits by providing service towards the customer. This
industry plays a great role in the country's economy. In the United Kingdom, hospitality
organization is one of the biggest industry and this industry contributes to the whole country's
economy. Many visitors have come to the United Kingdom for their profession of others reason
and hospitality industry provide service themselves and also provide resident and different types
of product.
In this assignment, several types of rules and regulations of hospitality organization and
also discuss the managing and financial performance and discuss the process of the double-entry
system and also discuss the chain of a business organization and different functional role of the
hospitality sector.

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

Company Transaction Details:

01/04/2016 (1) Set up the business by introducing ₤180,000 cash

10/05/2016 (2) Purchase property costing ₤130,000 paid in cash

15/06/2016 (3) Purchase goods costing ₤6,000 paid cash

01/07/2016 (4) Sold goods for ₤8,000 all-cash sales

01/08/2016 (5) Purchase goods costing ₤9,000 paid in cash

01/09/2016 (6) Pay a sundry expense of ₤200, by cheque

01/10/2016 (7) Sold goods for ₤17,000. All-cash sales

01/11/2016 (8) Paid wages of ₤2,100 to an employee

01/12/2016 (9) Pay postage costs of ₤300, by cheque

1. Journal entries

Date Description Debit Credit

01/04/2016 Cash ₤180.000

To Capital ₤180.000
[Start the business]
10/05/2016 Property ₤130.000
To cash ₤130.000
[Purchase property for cash]
15/06/2016 Purchase ₤6.000
To cash ₤6.000
[Purchase goods for cash]
01/07/2016 ₤8.000
Cash ₤8.000
To sale
01/08/2016 [Sold goods for cash] ₤9.000
Purchase ₤9.000
To cash
01/09/2016 [Purchase goods for cash] ₤200

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 Sundry expense ₤200
To Bank
[Pay a sundry expense by cheque]
01/10/2016 Cash ₤17.000
To sale ₤17.000
[Sold goods for cash]
01/11/2016 Wages
₤2.100
To cash
₤2.100
01/12/2016 [Paid wages to an employee]
Postage ₤300
To Bank ₤300
[Pay postage by cheque]

2. Prepare ledger accounts for entries:

Capital Account
To cash 180.000
To balance b(d) By balance c(d)
180.000 180.000

Cash Account
To sale 8.000 By property 130.000
To sale 17.000 By goods 6.000
To capital By goods 9.000
180.000 Wages 2.100
205.000 57.900
To balance b(d) By balance c(d) 57.900
57.900

Property Account
To cash 130.000
To balance b(d) By balance c(d)
130.000 130.000

Sales Account
By cash 8.000
By cash 17.000
By balance c(d) To balance b(d)
25.000 25.000

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 Purchase Account
To cash 6.000
To cash 9.000
To balance b(d) By balance c(d)
15.000 15.000

Sundry expense Account

By Bank 200
To balance b(d) By balance c(d)
200 200

Wages Account
To cash 2.100
To balance b(d) By balance c(d)
2.100 2.100

Bank Account
By sundry expense 200
By postage 300
By balance To balance b(d) 500
c(d)
500

Postage Account
By Bank 300
To balance b(d) By balance c(d)
300 300

3. Trial balance

No Name of the account Debit Credit

1 Capital Account - 180.000
2 Property Account 130.000 -

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3 Cash Account 57.900 -
4 Sales Account - 25.000
5 Sundry expense Account 200 -
6 Wages Account 2.100 -
7 Postage Account 300 -
8 Bank Account - 500
9 Purchase Account 15.000 -
Total 205.500 205.500

Derby Enterprises Ltd

Income statements for the year ended 30 November

2014 2015
₤0000 ₤0000
Revenue 9.482 11.365
Operating profit 914 1.042
Interest charges 22 81
Profit before taxation 892 961
Taxation 358 386
Profit for the year 534 575

The balance sheet as of 30 November

2014 2015
₤0000 ₤0000

Noncurrent assets
Premises 5.240 7.360
Plant and equipment 2.375 4.057
7.615 11.417
Current assets
Inventories 2.386 3.420
Trade receivables 2.540 4.280
4.926 7.700
12.541 19.117
Total assets
Equity
Share capital 2.000 2.000
Reserves 7.813 8.268
9.813 10.268
Noncurrent liabilities
Borrowing – loans 1.220 3.675
Current liabilities

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Trade payables 1.157 2.245
Taxation 179 193
Short-term borrowings/overdraft 172 2.736
1.508 5.174
Total equity and liabilities 12.541 19.117

Dividends of ₤120.000 were paid on ordinary shares in each of the two years.

Calculate for each year, the following ratios:

1. Operating profit margin

Operating profit
Operating profit margin =
Total revenue

914
Operating profit margin (2014) = = 1.01%
9.482

1.042
Operating profit margin (2015) = = 0.091%
11.365

Operating profit margin measures the profitability of Derby Enterprises Ltd. The result
indicates a decrease in sales, which means the company is losing money.

2. Return on capital employed

Net Operating Profit

ROCE% =
Total Assets−Current Liabilities

914
ROCE (2014) = x100 = 11
9.813−1.508

1.042
ROCE (2015) = x100 = 20.45
10.268−5.174

Return on Capital Employed or ROCE is a financial ratio that determines Derby

Enterprises Ltd profitability and the efficiency of the capital is applied. A higher ROCE, which
was in 2015 (20.45) implies a more economical use of capital.

3. Current ratio

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 Current assets
Current ratio =
Current liabilities

12.541
Current ratio (2014) = = 8.32:1
1.508

19.117
Current ratio (2015) = = 3.69:1
5.174

The current ratio measures Derby Enterprises Ltd liquidity or the ability to pay off short-
term debts. In 2014 the company was more able to pay their assets instead of 2015.

4. Day’s trade receivables

Net Sales(Total revenue)

One day’s sales =
365 days

9.482
One day’s sales (2014) = = 26 per day (rounded)
365 days

11.365
One day’s sales (2015) = = 31 per day (rounded)
365 days

Derby Enterprises Ltd collects its receivables 26 times on average per the year 2014, and
31 times in 2015.

5. Sales revenue to capital employed

Sales revenue
Sales revenue to capital employed =
Total asset −Current liabilities

9.482
Sales revenue to capital employed (2014) = = 1.14 times
9.813−1.508

11.365
Sales revenue to capital employed (2015) = = 2.23 times
10.268−5.174

A higher asset turnover ratio is preferred to a lower one, it indicates that the assets are
being used more effectively and productively to generate revenue. Derby Enterprises Ltd
increase is an activity in 2015.

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LO2 Assess how to manage the Human Resources lifecycle within the context of HR strategy

Review the different stages of the HR life cycle applied to the Front Desk job role of
Lancaster London Hotel and their importance for retaining and developing talent

There are five different stages of the human resources life cycle. Those are:
1) Recruitment
2) Onboarding
3) Development
4) Retention
5) Exist
Recruitment onboarding: this is the most important stage of the employee life cycle.
First of all, identify the departmental requisition and then offer the specific department. A group
of people or candidates are applying for the post and then maintain different processes an
employee is selected. With the help of the onboarding organization going on smooth (Quicken,
2016).
Development: employee development is a very important stage of the employee life
cycle. To make work more confidently and increase employee development is needed. And also
doing new types of activities and make them loyal and trustworthy this stage is so important. To
attractive challenges and doing the work employee development so very much important.
Retention: this stage is so critical in the employee life cycle. Every organization is hiring
the right person for their organization. When the organization recruitment the employee then
mostly concerned with their need if the employee is fulfilling those expectations those
employees are hired by the organization, but face the organizational activities and environment
an employee takes new decision to remain in this organization or not. If the organizational

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environment and other facilities are better then the employee is remaining in this organization.
And so, the organization mostly concentrate their employee for retaining theirs.
Exist: this is the final stage of an employee in the organization. In this stage, the
employee leaves for his reason and time of retirement, or retirement of a new job. Whenever the
employee left the organization then it exists (Quicken, 2016).

Develop a performance management plan for a specific hospitality job role applying techniques
to resolve both negative behaviour and overcome issues of staff retention

Performance management
 Plan: To achieve the organizational goal and also evaluate the employee’s performance
there needs to go a process and that way plan is so important. The plan clarifies the whole
structure of the organization.
 Monitor: organizational success depends upon proper monitoring. If the monitoring
performance is better then organizational success does not come. With the help of the
proper monitoring of employee and machinery, performance is evaluated.
 Review: after executing the plan organization measure the actual outcome and also
compares the actual and expected outcomes if the outcomes are better than the
expectation then the plan is also executed and if the outcomes are not better then the plan
also changes (Harold, 2016)

Employees Retention
The employee is the most concerning issue of any kind of organization. The skilful
employee is the assets of the organization. So, to make a good result of the organization you
much have to retain the employee. Some activities of retaining the employees in the organization
are:
1) Providing better compensation towards the employee
2) Importance of the employee
3) Different program arrange to betterment the employee
4) Take the employee idea

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 5) Increasing participation of employee decision making

LO3 Illustrate the potential impact of legal and ethical considerations on a hospitality
business
Identify specific legislation that hospitality organisations have to comply and adhere to, in the
daily transaction of business using examples to explain where they are applicable
There have been different types of laws that have been implementing in a hospitality
organization. Day by day hospitality organization is increasing and there rules and regulation is
also increase. Those laws are describing the company’s rules and regulations. Some rules and
regulation are:
 Hotel association incorporation act 1991
 Foods safety act 2002/ food act 2014
 Alcohol sale and supply act of 2012
 Long service leave act 1976
 A guide of food act 2014
 Human right act2004

Using specific examples illustrate how the company, employment, and contract law has a
potential impact on business decision making in the hospitality industry
Company law impact on business
Company law is the legal entity of an organization. All rules regulation and operating
systems have been describing in the company’s law. A company cannot be doing any work
outside of company law (Harold, 2016). Companies write employees write, anything related to
the company is clearly described in company law and this law greatly impacts the business
organization.
Employee law impact on the business
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 The employee is the most important part of a business organization. No business
organization cannot be doing any work without an employee. So, for the betterment of the
employee law plays a great role. Employee law describes all types of the facility of the
employee. Working time, working conditions, overtime, minimum salary, etc. so, employee law
plays a great impact on the business organization.
Contract law impact on the business
There have been needed different types of contracts for operating business organizations.
If the contract law is not implemented then the organization cannot prosper. Different types of
the contract have been different law that contract condition is different. Contract law has
separated those types of different contact.

LO4 Explain the importance of coordinating and integrating various functions of departments
within the hospitality sector
How different functional roles within the hospitality sector interrelate
In the hospitality sector, there have been remaining different sector, and that sector plays
a great role. Properly maintain in hospitality organization there have been needed different
functional activities, those are front desk, foods, and beverage, the room service division, and
also the sales and marketing sector. Those are described below:
Front desk
The organization controller room is called is front desk office. The front office manager
identifies and selected what types of work are doing and what types of work are avoiding. To
satisfy the customer by providing the service there have been must require the front office. The
customer told their problem and demand in the front office and to fulfil those demands and
solved those problems front office managers are setting their employees (Workfront, 2019)
By the side of fulfilling customer needs and satisfaction front office managers control the
whole organization. Under the front office manager there are working the four departments those
are:
Guest service agent

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 They received the guests, and welcome them. They also provide and knowing them to the
rules and regulations of this organization. They also check in the gusts when they enter the
hospitality organization and also check out them when they outside the organization. They also
provide the room key to the guests.
Night audit
They are very important to any kind of organization they always ready to solve the
customer problem when it arises from 11 pm to 7 am.
Cleaning division
They always keep the organization neat and clean. If the organization does not remain
neat and clean the customer does not like the organization. They clean the hotel area, washroom,
and kitchen, floor, etc.
Uniformed service
Uniformed service plays a great role in an organization. There are doing different kinds
of activities that are security guard, liftman, waiter, cook, room cleaner, etc.
Foods and beverage department
The food and beverage department is knowing the customer's needs and want and which
reason for the reason have they come and they also try to provide the customer with their
religious foods. Foods and beverage departments are most concerned about the quality and
hygiene of the food (Workfront, 2019). They provide different food items at different times.
Sales and marketing department
Now a day’s sales and marketing department demand so increase because without help
the marketing department no organization can prosper their business organization. This
department is spread the organization name and organization quality. To achieve the
organizational goal sales or marketing department is so much important without helps from this
department no organization can achieve its goal.

Explain the different methods of communication, coordination, and monitoring applied within a
specific department of a hospitality organization to strengthen the value chain

Communication method

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 Internal communication: there have been different departments that have been
remaining in a business organization, and those departments have been a lot of employees. To
controlling those departments and employees there needed to communication. This
communication is internal. Through internal communication, an employee is knowing the
organizational rules and regulations and also knowing the organizational goal.
External communication: for achieving the organizational goal an organization needed
to communicate outside of the organization. This communication is external. The front desk
office manager is maintaining external communication.
Upward communication: to making a decision when the manager needed to
communicate with the organizational director or high-level authority then the communication
system is upward communication. This communication is always going too high.
Downward communication: when the companies’ directors or high-level authority try to
communicate to the department manager for the betterment of the organization, this is a
downward communication. This communication is always going down.
Horizontal communication: when the marketing manager communicates to the financial
manager then the communication system is horizontal communication.
Coordination method
Sound planning: to make a task efficient and effectiveness sound planning plays a great
role. When planning time management coordination the resources then this planning is so
effective and also the employee feels better to work.
Sound organizing: a sound full environment enhance the working activities. The sound
organization may be set the equipment and people in the right place so, everyone feels
comfortable and they are satisfied with their activities so, the output is increased.
Chain of command: a hospitality organization strongly maintain the chain of command.
Chain of command means to follow or maintain the higher command. Higher-level management
provides the order and advice towards the lower level manager.
Sound leadership: a leader maintains the whole organization. Any kind of decision
making is controlled by the leadership. If the leadership is not good at then the whole
organization is affected one the other hand sound leadership is key to success (Starmeup, 2017)

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 Monitoring method
Business process monitoring: a business organization going through a process. There
have been maintaining some rules. So, sometimes monitoring business organization process and
also evaluating them. This monitoring increases the productivities level and as well as smooth
operation.
Functional monitoring: different functions have been following different methods. So,
those functions should be proper monitoring to get a better result.
Technical monitoring: different techniques have been using in an organization. If the
technique is proper monitoring then the technology does not provide a better result.

Conclusion

Employees always try their best for the betterment of the organization. Employee
retention is so important to any kind of organization. So, the organization should have provided
some service to the employee so that they will happy and satisfied. For development the
organization employee always ready by the side of the organization should have maintained
some facility to benefits the employees.

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 Bibliography

Greenberg, Andrew, 2015. contractrecruiter. [Online] Available at:

https://www.contractrecruiter.com/onboarding-process/ [Accessed 26 03 2021].
Harold, 2016. accountingcoach. [Online] Available at:
https://www.accountingcoach.com/bookkeeping/explanation/4 [Accessed 25 03 2021].
Invensis, 2015. 10 Ways to Monitor Financial Performance for Your Business. [Online] Available at:
https://www.invensis.net/blog/finance-and-accounting/ways-to-monitor-financialperformance-
for-your-business/ [Accessed 22 03 2021].
Invensis, 2015. ways-to-monitor-financial-performance-for-your-business. [Online] Available at:
https://www.invensis.net/blog/finance-and-accounting/ways-to-monitor-financialperformance-
for-your-business/ [Accessed 26 03 2021].
Quicken, 2016. 10 basic principles of financial management. [Online] Available at:
https://www.quicken.com/10-basic-principles-financial-management [Accessed 26 03 2021].
Starmeup, 2017. organizational culture, employee life cycle. [Online] Available at:
https://www.starmeup.com/blog/en/organizational-culture/employee-lifecycle/ [Accessed 26 03
2021].
Workfront, 2019. Performance management: plan, monitor, review. [Online] Available at
https://www.workfront.com/blog/performance-management-plan-monitor-review
[Accessed 26 03 2021].

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