Hotel

Industry An Overview

Complied By CA Brijesh Vithalani

Technical Aspects of Hotels

Rooms Food & Beverages Foreign Exchange Compliance Marketing Department Technological Change
Decision

regarding adoption of recent Technologies and Facilities and Infrastructure of the Hotel
Complied By CA Brijesh Vithalani 2

Technical Aspects.. ROOMS

Front Office Bell Desk House Keeping General Administration

Complied By CA Brijesh Vithalani

Technical Aspects.. ROOMS

Front Office
Responsible for making advance booking & reservation They prepare booking list for next day, Room rent to be charged after discount, Airport pick-up status Fill up registration card at front office House keeping department prepare a guest count report and send to front office and reconcile e.g. Extra bed requisition Sending of list of check outs to all department Allowances (discount)
Complied By CA Brijesh Vithalani 4

Technical Aspects.. ROOMS

Bell Desk
Bell Captain Bell Boy Small Baggage

Complied By CA Brijesh Vithalani

Technical Aspects.. ROOMS

House Keeping
Supervise cleaning of guest rooms etc. Inventory in the house keeping linen in four set

(1)Room (2)Laundry (3)House keeping Store (4)Main Store

Complied By CA Brijesh Vithalani 6

Technical Aspects.. ROOMS

General Administration
Pricing of Rooms
Revenue can be maximise by optimising Average Room Rent and Average Occupancy

Where, Average Room Rent = Total Room Rent No. of Night Sold Average Occupancy = Total No. of Night Sold Total No. of Night Available

Complied By CA Brijesh Vithalani

Technical Aspects.. ROOMS

General Administration
Night Audit
Night auditor confined merely to ascertain that all charges appearing in departmental sales summary have been correctly charged to customer folio

Cash Float
Each cashier hold minimum cash balance, Largest cash held by general accountant in account department and next by front office

Paid Outs
Payment on behalf of guest
Complied By CA Brijesh Vithalani 8

Technical Aspects FOOD & BEVERAGES

Kitchen Banqueting Restaurant Bars Room Service Stewarding Stores

Complied By CA Brijesh Vithalani

Technical Aspects FOOD & BEVERAGES

Kitchen
Components of Food Preparation Control Over Raw Materials Cost Food Preparation and Serving of Food

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Kitchen
Components of Food Preparation
Perishables Provisions

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Kitchen
Control Over Raw Materials Cost
Purchase of Raw materials
Annual Fixed Price Contracts Rate fixed by purchase committee comprising the representative of the purchase department accounts department and administration department

Ordering for Perishables and Provisions

Generally ordered on afternoon of previous day

Basis of Ordering
Requisition from the head chef.

Receipts, Storage and Issue of a Raw Materials

Rejection if any are usually made immediately Daily Receipts Register is to be maintained

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Kitchen
Food Preparation and Serving of Food
Standard Recipes
Helps in balancing Taste and Cost

Portion Control
Standard quantity to be served per dish

Menu Costing
Like price fixing

Wastage Report
Food could not serve next day Wastage should be reported - It is an indicator of an efficiency
Complied By CA Brijesh Vithalani 13

Technical Aspects FOOD & BEVERAGES

Banqueting
The major source of revenue is considered to be sale of Food and Beverages Plate Count is crucial aspect

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Restaurant
Pricing of Off-Menu Items Cancellation of bills is require to approve by Restaurant Manager and duly defaced on bill book

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Bars
While Wine and Beers are sold in bottles, spirits are also sold in pegs Excise Record Mixing of Drinks for Cocktails Physical Verification at the Bar

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Room Service
Obtaining guest signature on the bill

Complied By CA Brijesh Vithalani

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Technical Aspects FOOD & BEVERAGES

Stewarding
Responsible for maintaining stocks of cutlery and crockery Physical Verification

Complied By CA Brijesh Vithalani

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Technical Aspects . FOREIGN EXCHANGE COMPLIANCE

Issue encashment certificate to travelers regarding travelers cheque and foreign currency Submit a report to RBI

Complied By CA Brijesh Vithalani

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Technical Aspects . MARKETING DEPARTMENT

Take strategic decision regarding
Brand Image Devising off season Packages Holiday Food Festival Sponsoring social event etc.

Complied By CA Brijesh Vithalani

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Accounting and Control Aspects

Books Normally Maintained Peculiar to Hotel Industry

Complied By CA Brijesh Vithalani

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Books Normally Maintained

General Ledger Cash Book, Bank Book, Purchase and Expenses Register Journal Debtors Ledger, Creditors Ledger Stock Ledger Payroll Summaries Fixed Assets Register
Complied By CA Brijesh Vithalani

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Peculiar to Hotel Industry

Sales summaries of various operating department

Restaurant Health Club

Allowance Register

Complied By CA Brijesh Vithalani

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Recognition of Revenue

Room Revenue Accrual Basis Classification of Fixed Assets e.g. Bath room fittings are plant and machinery Cutlery and Crockery Cutlery and Crockery changed to revenue account when issued for stewarding department Allowances Allowances arise due to an error in billing or due to guest complaint should not be included Bills on Holds Either in case of Late charges or Skipping . Provisions for doubtful debts at the end of year Bar Inventory Daily Basis, Destroying empty bottles immediately

Complied By CA Brijesh Vithalani

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Internal Control System

System is designed in such a way that No person in the organisation is able to control activity from beginning to end The work of one employee is made complementary to that of another in a way that work of one gets verified automatically There are four main parts of Internal Control System (1)Sales (2)Purchase (3)Cash (4)Debtors
Complied By CA Brijesh Vithalani 25

Internal Control. SALES

Granting Discount
Approved By Management

Complimentary Room
Should be given in exceptional circumstances

Permitting occupancy of a room beyond the normal hours

Should have clear-cut guideline of waiver

Granting Allowances
Approved Appropriately
Complied By CA Brijesh Vithalani 26

Internal Control. SALES

Guest Billing
Charges are billed at counter of outlet providing services

Restaurant and Bar

Rotation of duty of stewards and cashier Copy of the Kitchen Order Ticket (KOT) match with F&B ledger

Banqueting
Collection of advance Rates and granting discount Plate Counting
Complied By CA Brijesh Vithalani 27

Internal Control. PURCHASE

Annual Rate Contracts
Formal documentation Award contract to lowest quotation List of approved supplier to be maintained Numbering of Purchase Order

Formalised Indenting (requisition) System

Authority for indenting (requisition) Proper control Complied over By CA Brijesh serial Vithalani number of indents
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Internal Control. PURCHASE

Monitoring Stock
Re-order level, Order Quantity, Maximum and minimum stock Stock records should be maintain on regular basis

Receipt of materials
Proper inspection at the time of receipt Proper control on number of preparation of Goods Received Note and serial number
Complied By CA Brijesh Vithalani

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Internal Control. CASH

Its further divided into three parts
(1)Receipts (2)Payments (3)Cash and Bank balance

Complied By CA Brijesh Vithalani

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Internal Control. CASH

Receipts
At the end of the shift cashier should be required to submit report of cash receipts Cash counted by both the cashier at the time of shift change Person responsible for maintaining books should not allowed to handle cash Duty of cashier should rotated regularly Chief accountant should receive summary report for cash receipt made 31 during the Complied day By CA Brijesh Vithalani

Internal Control. CASH

Payments
Vouchers are preprinted and serial number control should be maintain over these vouchers Payments made against only authorised voucher Level for authorising various payments should be clearly defined

Complied By CA Brijesh Vithalani

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Internal Control. CASH

Cash and Bank balance
Department wise collection of each day must be fully deposited in the bank account Cash for the expense must be issued separately Reconcile with balance as per book Cash of all department should produced at same place at same time Bank balance reconciliation must be Complied By CA Brijesh Vithalani 33 made

Internal Control. DEBTORS

Credit limits should be reviewed at regular time intervals

Complied By CA Brijesh Vithalani

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TAX APPLICABILITY

Complied By CA Brijesh Vithalani

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TAX APPLICABILITY
Luxury Tax
Levied on the basis of Room Rent

Value Added Tax

Levied on the basis of Sale of any Food Item

Service Tax
Levied on the Service other than Room rent

Provident Fund, ESI, Professional Tax

Tax related to Employee

Tax Deducted at Source

Deductible on various kind of Payment like Contract, Salary, Rent, Commission, Interest, Professional Service etc.

Fringe Benefit Tax

Payable on the basis of value of Fringe Benefit

Complied By CA Brijesh Vithalani

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