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Throughout the world people travel with
different objectives such as business, conventions,
participation in sports, recreation,
relaxation—both at plains as well as in mountain
resorts—or may be in night clubs, or to get to know
different cultures, art, folklore, architecture, painting
and religion. The two basic needs for a traveler all
the time are shelter and food—which brings the Hotel
industry to this front.
Hospitality management is the academic study of
the running of hotels, restaurants, and travel and
tourism-related business. The hotel industry, which
is an integral part of the tourism sector, provides a
large percentage of the total employment in the
tourism industry. A hotel needs the services of trained
staff to provide professional services to national and
international clients. The hotel and catering industry
has been one of the fastest growing industries in the
world in past 50 years. India’s hotel industry is
thriving due to an increase in business opportunities
and foreign and domestic tourism.
Hotel business provides lodging, food, protection
of luggage, different types of comforts and luxuries,
services and facilities of entertainment to their clients
under one roof. A hotel business can either be in the
form of One Star to Five Star with deluxe amenities.
Not only this, it can be either in the form of sole
proprietorship or a partnership or a private limited
or a public limited company.
Like other business and industrial establishments,
hotels too are commercial entities. A number of
financial transactions take place :
● from purchase of raw materials to conversion
it into finished product for sale;
● purchases of finished goods for sale in their
original forms;
● purchases of consumable articles; and
● purchases of capital items from the suppliers,
and sell of accommodations, meals, drinks and
services to its clients.
It is not possible that the owner or the employees
remember all such transactions. So it is essential to keep
a written record of all the transactions in appropriate
books and records which may help in calculating the
profit earned or the loss incurred during a particular
CMAs in Hospitality Management
Vinay Tandon*
the establishment. It employs Managers, House
Assistants, Receptionists, Stewards, Labours, Clerks
and other staff to whom salary is to be paid. Having
regard to their nature of business, there are certain
accounting aspects which are tailor-made to this
industry.
Hotels maintain a number of registers, summary
sheets and accounting books (vary according to the
size and requirement of the hotel) for the purpose of
providing a complete picture of the financial
transactions. Hotels maintain their accounts in
columnar to tabular form. Data of each head of
income, expenditure, purchase and sales of each day
are analysed for costing, control, forecasting and other
managerial work by a CMA and it forms an integral
part in hospitality management.
Income Accounting
In hotel industry two types of business—namely
manufacturer and retailer—take place and products
pass through many hands. Therefore, the problem of
controlling is very vital. The accounts department is
generally headed by a Financial Controller who may
be assisted by an Assistant Financial Controller
(depends on the hotels) who is/are supported by
Credit Manager-cum-Income Accountant, Food &
Beverages Controller, Head Cashier and Accountant
for general accounting functions. In hotels the credit
is allowed to all clients except a few who appear to be
of doubtful nature and bring no luggage with them.
Personal accounts of clients are opened immediately
as soon as they arrive and occupy rooms in the hotel
because their departure is always uncertain. A hotel
has many departments—so cash is collected and credit
is allowed at many points.
The Credit Manager-cum-Income Accountant is
responsible for proper recording of all income
transactions into City Ledger such as Ledger of
Individuals, Ledger for Offenders, Ledger for Credit
Card Holders, Ledger for Travel Agencies, Ledger
for Government Departments, etc.
The Food & Beverages department deals with
costing of daily consumption, preparation of monthly
Food & Beverages reports, recommending selling
prices of various items at Food & Beverages outlets,
maintenance of a proper stores kardex/ledger for
period of time and disclosing the financial position of * B.SC, PGDCA, PGDBA, FICWA, MIIA (USA)
The Management Accountant |September 2011 757