An important issue for a Hotel Manager is controlling the income and expenditure of the Hotel. Income is the money which enters the Hotel. Expenditure is money the Hotel spends (carry on reading or watch the post).
A Hotel Manager might not directly have these skills; so in order to control the income and expenditure, it is best to directly involve the people in charge of controlling a Hotel’s finances. Sometime these people are called Financial Managers and sometimes Accountants.
Recording income and expenditures can be done manually or electronically. Recording has to be done instantly and on a daily basis.
All the accounts related to income and expenditure, any income that is due in, any payments that were received and receipts and invoices issued need to be recorded clearly with their date and purpose. Even the smallest of income and expenditure must be recorded.
Recording income is a way of helping to determine whether the Hotel is making profit or not.
If every Hotel Manager minimises costs in their own area of responsibility, it will altogether add up to huge savings for the Hotel. One needs to know to make right choices when it comes to spending money on specific areas within the Hotel.
Hotels should only buy the necessary stationary, equipment, furniture and software necessary for the running of the Hotel. We should cut down on any other unwanted Hotel expenses. Buy energy efficient machines and use energy bulbs so that you can save on energy bills. Use proper insulated doors and windows whenever possible.
While cutting Hotel costs, it is wise to cut them in the right areas as cutting costs in the wrong areas can have a disastrous or negative effect. Always look for good value for money and this can be achieved by maintaining good relationship with Hotel suppliers and partnership organisations.
Most individuals in the Hotel, apart from Senior Hotel Managers, are not allowed to spend money on behalf of the Hotel, so that responsible spending is always achieved within the Hotel business. Authority to spend does not mean that one can simply spend the money on anything; it means money needs to be spent responsibly and wisely.
A Hotel uses many advanced technologies to ensure that it saves time and money in its accurate Financial Control; this work used to be carried out manually, however it is all far more likely to be carried out electronically today.
Could you imagine a Hotel without computers during a busy check-out period? Do you remember when Credit cards were operated using a paper based system? I do.
Corrective actions are required in Hotel Departments that do not conform with the Hotel’s policies, procedures or processes. The reasons for these non-conformities need to be identified and preventive measures need to be taken from these occurring in the future and this is called corrective action.
Controlling Income and Expenditure is not about just keeping the finance numbers right in the Hotel, it is also about managing the people involved. One needs to possess good Hotel Management skills to manage budgets and authorise expenses.
Hotel Managers must take Controlling Income and Expenditure seriously as they can get into trouble if there are failures in money management. While managing the Hotel’s money, the Hotel Manager has to keep in mind the aims and objectives of the Hotel and the legal regulations in the country where they are working.
Hotel Managers should monitor, control and record income and expenditures. Create documents that outline the performance of the organisation against the plans (the budget) and keep all records up to date and accurate.