This Issue - Icwai

COVER COVER ARTICLE
ARTICLE
amount to be transferred to the City Ledger and
amount yet to be transferred to the City Ledger. The
figure of Room revenue comes from Night Clerk’s
Report and that of Food & Beverages income comes
from White Report of the Night Clerk, and that
relating to miscellaneous income from summary
sheets of Miscellaneous Income.
Management of credit transactions
Proper accounting of all credit sales along with
proper monitoring is the part of credit management.
As far as in-house guests are concerned, their folio is
transferred to Credit department for entry in City
Ledger only when they have checked out. The amount
due from such guests usually appears in Green Report
of Night Clerk. At the end of the month, amount due
from in-house guest who are yet to check out would
be incorporated in the General Ledger on the basis of
the Green Report of the last day of the previous month
and its details be prepared by the Front Office/Night
Clerk. Since different folios are maintained for various
types of customers such as Credit Card Agencies,
Travel Agencies, Airlines, Corporate Clients, Staff and
others, there is a master folio which is also prepared
—it is simply a summary of all the folios taken
together and is prepared on daily basis.
Management of cash transactions
Cash at restaurants and bars is collected by the
cashiers deputed at those outlets. The amount so
collected is reported as cash sales in the Cashier
summary sheets which comes to the Night Clerk who
checks and total the same. Apart from this, cash is
also collected at the front office from the guests of the
hotel for which an imprest is maintained at the front
office to meet such requirements of the foreign guests.
Front office Cash Report is also prepared on a daily
basis, and the cash so collected, along with the said
report, comes to the back office on a daily basis. The
money so collected in the form of Foreign Exchange
cannot be utilized in any way and are to be deposited
by an authorized person by the Reserve Bank of India.
Consumption Analysis
Consumption analysis is carried out of Food &
Beverages department. As the inventory records of
Food & Beverages are maintained by this department,
every Food & Beverage material requisition comes to
this department. The material requisition slip bears
the name of the outlet to which materials are to be
issued. Thus the inventory records are updated
automatically. For costing purposes, there are separate
cost centres. Total food consumption as well as
beverage consumption for all outlets are computed
separately. Thereafter, food cost percentage and
beverage cost percentage are computed as :
Food cost % = (Food consumption *100)/Food sales
Beverage cost % = (Beverage consumption *100)/
Beverage sales.
These percentages are then compared with
standard food and beverage cost percentage. The days
when food cost percentage and beverage cost
percentage are high are analyzed and reasons sorted
out for the same. Similarly at the end of the month,
food cost percentage and beverage cost percentage
are computed. For the monthly figures, due account
is taken of inventory in kitchen/bars & restaurants,
both at the beginning as well at the end of the month,
by the process of physical verification of various items.
Likewise, another important cost control technique
is determination of actual consumption of food and
beverages and its comparison with that of the
standard consumption determined earlier. For any
abnormal variations, reasons are to be sorted out and
necessary steps to be taken so that the same can be
avoided, as far as possible, in future.
Since all the items which are served in the
restaurants have got standard recipes, the computer
can be programmed in such a way that at the end of
the day it can give details of physical quantity sold
for all the items forming part of the menu. On the
basis of the quantity sold and standard menus,
standard quantity of raw materials consumed can be
evaluated which should be compared with actual
consumption of raw materials. If this difference is
abnormal, reasons for the same must be sorted out.
CMAs are better placed compared to other
professionals in hospitality management.
CMAs can play vital role to
● Act as chief financial controller of the institution;
● To get the records maintained as desired by the
industry;
● Employ proper administrative and accounting
controls to limit the revenue leakage;
● Establish cost guidelines and benchmarks to
assist in analyzing variances at different levels;
● Make most efficient use of all the available
information for revenue budget and monitoring;
● Develop tools for analysis and decision making
at every stage of operation;
● Constantly improve the process to monitor time
spent on non-value added tasks;
● Act as a guide to all those involved in the
process at every stage of operation;
● Assess cost-benefit analysis at various time
intervals;
As discussed earlier, CMAs play a crucial role at
each stage in the institution to ensure the long term
viability and constant profitability of the business. ❐
The Management Accountant |September 2011 759