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7/31/2019 Finance Department Dept.
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The FINANCE
DEPARTMENT
................is the backbone of
hotel operations.
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It handles the inflow and
outflow of funds andrecords all transactions.
Its broad functions are tosafeguard the interests of the
company (owners) and the cash.
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Organizational Chart of the Finance Department
PRESIDENT
FINANCIALCONTROLLER
PURCHASINGMANGER
F&BCA
PAYMSTR
CORPORATEAUDITORCHIEFACCONTANT GENERALCASHIER
ACNTRCVB
ACNTPAY
INCMADTR
F&BCASH
FOCASH
PROPCSTD
PURCOFCR
STRMCLRK
SRAUDIT
NITEAUDIT
F&BAUDIT
SHIFT
ADTR AUDASST
JRADTR
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The FinancialController
He/She is a key department head and a
member of both the Management team andExecutive Committee of a hotel. The FinancialController has administrative and functionalresponsibilities geared towards helping thehotel achieve its business plan objectives inRooms and F&B, while maintaining internal
controls and accounting procedures at a highlevel.
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Financial Controllersadministrative responsibilities are
to:1. Provide management with accounting information.2. Coordinate the preparation of hotels annual business plan.3. Provide budget information, which helps determine operational
targets and decisions.4. Act as a financial consultant and assist hotel management with
the proper computation and periodic forecasts.5. Initiative investigations in all aspects of hotel operations in the
interest of maximizing profits and improving internal control.
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6. Analyze hotel performance versus budget/ forecast and givecounsel to management.
7. Monitor operational and capital expenditures in conjunctionwith approved budget.
8. Monitor hotels insurance policies and ensures that therequired coverage's are in effect.9. Monitor hotels necessary licences and renewals in accordance
with local laws.10. Review and recommend all legal contracts and attend to all
legal matters in the hotels operations.
Financial Controllersadministrative responsibilities are
to:
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The AccountingDepartment records
and maintain insafekeeping thedocumentsevidencing all
transactions of thehotel which affect itsassets, liabilities andfinancial position.
Accounting
Department
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DepartmentThe department usesstandard accounting
practice and thenomenclatureprescribed by the Hoteland Restaurant
Association of thePhilippines (HRAP), theDepartment of Tourism(DOT) and the Bureau of
Internal Revenue (BIR).It maintains the proper
journals, ledgers andother books of accountand records of the
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Accounting Department
From these records, the departmentprepares the balance sheet and theprofit and loss statements. It alsogenerates a report on the hotelscash position and other reports thatreflect hotel operations and its
financial situation.
With the assistance of the profit and
cost centers of the hotel, the
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ChiefAccountant
The Chief Accountant
should be a graduate ofAccounting, preferably aCPA with a least fiveyears experience in
operations accountingand financial accounting.Some experience in
auditing would be ideal.
The Accounting
Staff
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For operationalaccounting, he or she
must know the ins andouts of transactionsinvolving day-to-day
operations of a hotel. He orshe should be able tofollow each transactionfrom start to finish, and
must keep accuraterecords of each steptransaction.
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For auditing, heor she must have aworking knowledge
of hotel operationsand a thoroughgrounding in
financialdocumentation to beable to check andverify the figures.
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While a Chief FinancialController has to be able to
see the big picture in order toset directions for theAccounting Department, theChief Accountant that must be
very keen on details. It mustbe second nature for ChiefAccountant to check figures.
He or she must be able tocheck the small items on
invoices, should know when to
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The Income Auditoraudits allinvoices for the day anddetermines whether the chargesto the customers were correct
and whether all payments wereposted correctly and properlyrecorder. The Income Auditorlooks into room billings and F&B
billings, paying particularattention to high folio balances.
Income Auditor
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He or she also checks whether there were
any deviations from standard policies andprocedures and reports any discrepanciesin room rates and room sold to the ChiefAccountant or Financial Controller.
Additionally, the Income Auditor verifies the accuracy, proprietyand completeness of the reports produced by the Micros FidelioSystem before these are forwarded to the Back Office.
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Account Payable Clerk
The Account PayableClerks ensures propercontrol of all payments
transactions and maintainsledgers for accountspayable trade and other
related liabilities. He or sheis in charge of preparingpayment checks andreleasing the checks to thesuppliers. He or she
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Accounts Receivable
ClerksThe Accounts Receivable
Clerks is in charge of
preparing accountsreceivables for billing, followup collections, prepares theaging of accounts
receivable, process creditlines and may act as thehotels representative in
credit meetings. He or she
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Paymaster
The Paymasterhandles timekeeping,payroll, withholding
taxes, SSS and Pag-ibigdeductions and timelysubmission of all
reporting requirementsto governmentagencies. ThePaymaster reports tothe Chief Accountant
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F&B Chief
AccountantBecause F&B
operations have a
faster turnover thanthe Rooms Division,some hotels haveseparate accountingunits for their F&Bactivities. The F&BChief Accountant
reports to Chief
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Internal Control
The Accounting Departmentimplements internal controls to put alid on costs to help ensure the
profitability of the hotel. Thus,everything that goes in and out of thehotel has to accounted for.
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CASH DEPARTMENT
The Cash Department handles allcash disbursements and alltransactions involving payments at
the Front Desk, the F&B Departmentand other revenue outlets of thehotel. These Transactions include
receiving guests payments on theiraccounts, changing foreign currencyto pesos, making change for largedominations, making cashdisbursement against petty cash
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The department alsoupdates the bill ofeach guest with
signing privileges. Itmaintains up-to-daterecords of the
accountabilities ofeach hotel, restaurantand bar guest.
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Thus, the department hasresponsibility of recording by
means of Micros FidelioSystem the cash receipts andreceivables from operations ofthe hotel . In maintaining an
up-to-date Folio, thedepartment relies oninformation from the Front
Desk, Housekeeping and theF&B Department of chargesincurred by the guest. The
Cash Department also checksth nt h t t
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Cash Department Staff
General Cashier
The General Cashier isresponsible for cashfunds, petty cashdisbursement, Cashiersremittances and
collections. He or shereports to President andFinancial Controller.
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Front Office Cashier
The Front OfficeCashier deals with allmanner of payments andforeign exchangetransactions at the Front
Desk. He or she alsoupdates all guestcharges and prepares
necessary daily reports.
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F&B Cashier
Handles alltransactions in theF&B outlet to which heor she is assigned
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Purchasing Department
The Purchasing Departmentprocures the supply items, equipmentand services required for the efficient
operations of the hotel. In carrying outits procurement functions, thedepartment endeavors to make
purchases of the best quality, of theright quantity, at the right time andthe right price.
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In its inventory controlfunction, the departmentmaintains such policies andprocedures that ensure theproper receipts, storage,issuances and record keeping of
supply items kept in stock.Between these two functions,the department oversees the
process involved from the timean item is requested to the timeit is ultimately used. Thedepartment is responsible for
ensuring that shortage of supply
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PurchasingManager
The PurchasingManager is in charge ofgeneral stores
procurement and directissue procurement andoversees the operations
of the Storeroom.
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Purchasing Managersduties are to:
1. Ensure the availability instock of items needed forthe hotels operations.
2. Receive approvedrequisition.
3. Canvass suppliers for thebest quality at the bestprice in the quantityneeded and on the date
required.
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4. Prepare a PurchaseOrder Forms forapproval.
5. When approval isreceived, purchasethe items needed.
6. Oversees thereceiving andchecking of
supplies delivery.
Purchasing Managersduties are to:
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7. Negotiate for terms(30,60 or 90 days)with the approved
suppliers andmaintain goodrelations with them.
8. Ensures that theitems are storedproperly.
Purchasing Managersduties are to:
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9. Inform thedepartments that therequisitioned items has
been delivered10. Maintain records of
purchases, deliveries,
stocks and release.11. Establish minimum
stock levels and
economical order
Purchasing Managersduties are to:
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F&B Purchaser
In some establishments withseveral F&B outlets, the task ofpurchasing, receiving and storing
of food items and F&B suppliesmay b assigned to an F&BPurchaser, who would do for the
F&B Department what thePurchasing Manager does for therest of the hotel.
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The F&B Purchaser is a key person ina successful F&B operations becausehe or she is responsible for ensuring
that quality products are purchased atthe right amount and the right placeall-year round.
F&B Purchaser
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The job entails more than grocerylist shopping for meat, fish, poultry,dairy products, dry goods, and
beverages and vegetable. The F&BPurchaser has to know whatsavailable, what's cheap and in season,
how much it costs at various times ofthe year, how long it takes to transportthe goods and what also the shelf lifeof each item is.
F&B Purchaser
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He or she must know suppliers, mustbe able to lock in the prices and mustalso obtain credit lines for the hotel.
Additionally, he or she must ensure theavailability of the products withoutoverstocking.
F&B Purchaser
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Establishing par stock is not enough;knowing what products are moving isessential.
Therefore, the F&B Purchaser has towork closely with Executive Chef.
In smaller hotels, the F&BPurchasing Officer is also the F&BReceiving Clerk and is often an
Accountant as well. This person is
F&B Purchaser
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Storeroom Clerk
The Storeroom Clerk is responsiblefor receiving, storing and issuingstockroom items needed for the
operations of the hotel. He or she isresponsible for maintaining accuraterecords of these items and for keeping
the Storeroom clean and free of pestsand vermin.
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Property Custodian
The Property Custodian isresponsible and accountable for allproperties of the hotel and the
restaurants, including all types ofequipment, furniture, fixtures, kitchenand restaurant operations equipment,
and other fixed assets. The PropertyCustodian will receive, classify,inspect, store, account for, and issueall these properties. He or she shall
also maintain and restore all properties
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The Auditing Department
The Auditing Department checksand varies the correctness ofaccounting records and reports, as well
as the companys system of internalcontrol. It uses standard and generallyaccepted auditing, and accounting
procedures including those prescribedby the HRAP, the DOT and the BIR. Thedepartment also implements thenecessary procedures in uncovering
and investigating fraud.
Th A diti
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The department alsoverifies the hotels dailycash transactions, takes
physically inventory andappraises the hotelsassets, and examines the
reports on the condemnedmaterials. In addition,Auditing Department maybe engaged in the hotels
cost control operations.
The AuditingDepartment
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As has often been
said, accounting ishistory. Accountants andauditors are like forensicexperts unravelling a
mystery. A paper trailhelps them to see whattranspired with every
transaction that wasrecorded.
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Corporate Audit,however, is not onlymeans of ensuring
compliance. It is also amanagement tool whichsupplies management
personnel at all levelswith information tocontrol the operations forwhich they are
responsible.
The Auditing Department
The Auditing
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Corporate
AuditorThe Corporate Auditorualities the examinationnd evaluation of the
dequacy and effectivenessf the hotels system of
nternal control, and the
uality of performance inarrying out assignedesponsibilities. Theorporate Auditor reports to
he company President and
The AuditingStaff
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Senior Auditor
The Senior Auditorprepares workingpapers and documents to examine andevaluate the adequacy and
effectiveness of the hotels system ofinternal control, and the quality ofperformance in carrying out assigned
responsibilities through financial,operations, compliance andperformance audit engagements. Heor she reports to Corporate Auditor
and supervises the Junior Auditor, the
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Night Auditor
The Night Auditoris responsible forposting all guest
charges andbalancingdepartmental
charges and guestbills. SometimesNight Auditor alsoact as a Cashier.
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Shift Auditor
Like Senior Auditor, the Shift Auditorprepares working papers anddocuments to examine and evaluate
the adequacy and effectiveness of thehotels system of internal control, andthe quality of performance in carrying
out assigned responsibilities throughfinancial, operations, compliance andperformance audit engagements.
Junior Audit and Audit
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Junior Audit and AuditAssistant
The Junior Audit andAudit Assistant preparethe papers anddocuments that facilities
the examination andevaluate of the hotelssystem of internal
control. They also checkcompliance with policies,plans, procedures, etc.
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F&B Auditor
The F&B Auditortracks F&Btransactions and
verifies that all thesales were postedproperly. From time to
time, he or sheconducts audit andreconciles purchasesand sales.
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Three Types of Audit
1. Financial Audit
. Involves the evaluation ofeffectiveness of internal controlsand reliability of accounting recordsto identify control problems thataffect the accuracy and reliability of
the Financial Statement.
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2. Operations Audit
.
Involves the study ofaccounting/financial, marketing,purchasing and other operations toidentify problems in performance of
management functions in planning,organizing, directing, and controllingoperations; identify opportunities for
improving performance in all areas;and make recommendations tosolve problems or make use ofopportunities.
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3. Compliance Audit
. Involves evaluatingaccounting operations andfinancial aspects of otheroperations to identify
control problems thatweaken the protection ofassets and reduce
compliance withprescribed policies andprocedures.
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Budgeting andForecasting:
Current Practice in theLodging Industry
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Budgets are usually prepared on anannual basis then divided into semi-annual, quarterly, and/or monthly
plans. The main reason for that is togive management more check-pointsto stop at, compare the actual with the
planned figures and take necessaryactions when needed which mightmean even revising the budget.
B d t l i t t ith th
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Budget planning starts with theestablishment of budget cycle, which
can be the calendar year or financialyear. Normally, the budget planningstarts from the top managementoutlining the general expense categories
and rough estimates that themanagement wishes to allocate for eachcategory. When the top management
produces a detailed cost estimates forevery expense items and passes on toline-management for verification andconfirmation, the process becomes the
-
Item budgeting is
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Item budgeting isanother importantactivity in operations
budgeting. Every costitem needs to beidentified and the cost
needs to be estimated.This is particularlyimportant whenbudgeting for theoperating expenses suchas wage, linen, frills, andother materials used in
the production of good
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Capital budgeting is also animportant activity but carried by the
finance manager. Purchase of newequipment, restoration or extension offacilities requires capital budgeting,
which is often accompanied by afeasibility study. The following exerciseprovides an opportunity to understandthe simple budgeting process usingpercentage change in the historicexpenses. Interestingly, thepercentage expenses (as a percentage
of revenue) are considered to be
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Forecasting
Forecasting is a technique toestimate, based on historical figures,expectations, trends, and/or
experience, a certain value of anuncontrollable variable for a certainfuture period of time.
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Forecasting
Moreover, forecasting cannot be assimple as coming up with a figure,solely by considering only historicaldata, without adjusting to othervariables like competition, image and
risk of the country, interest rates,inflation, exchange rates, and othereconomical factors! Therefore, a