finance department dept

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.



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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.



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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



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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

finance department dept

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