Unit 2: Finance in the Hospitality Industry

Stock control. The stock control section assists the accountable officer in maintaining accountability for the stock record account. Stock control personnel manage inventory levels to avoid creation of excess. Stock control personnel perform data entry, unit of issue conversion, input and output

F. Controls over cash and credit: a. Individual accountability for cash stocks. This meant that most personnel who dealt directly with cash were held individually accountable for a specific sum of money that was charged out to them. This control was designed to address the problem that these personnel will make mistakes to create any large shortages or persistent patterns of shortages.

The control of cash at Sands is further subdivided into accountability, standard operating procedures during filling and security at the countroom. Firstly, individuals are held accountable for the cash charged out to them and large shortages were grounds for dismissal. Secondly, formal procedures have been put in place for the transfer of chips. These procedures include filling the opener

Every business needs to have controls in place to remain competitive and survive in business. Without controls, the company would operate in chaos for a short period before the business collapses. When operating a business, a

16. Which of the following is not a procedure for the control of cash receipts? A. B. C. D. Immediate preparation of records of all cash receipts. Giving customers written receipts for all monies paid. Using prenumbered checks. Depositing cash in the bank frequently.

Each Friday, the cash clerk records the amount of cash receive and deposit the money in the bank account. Each quarter, the controller requests information from the bank necessary to prepare bank reconciliation.

2. Train every staff member who handles the cash, how to use the register correctly.

Financial controls are the means by which an organization’s resources are directed, monitored, and measured.

Carefully management of cash can allow a company to have enough cash to pay for obligations. Another way of protecting cash includes, appropriately investing idle cash. Cash must also be controlled by merchants, this may involve limiting access to employees and issuing a bank reconciliations. Merchants can compare the cash amounts from bank statements to the general ledger. These two but equal one another. Petty cash must be administered correctly and a proper petty system must be used by merchants. Disbursements can also be used to mange and protect cash.

One control activity in LJB that needs to be addressed is the establishment of responsibility. According to Kimmel (2011), “Control is most effective when only one person is responsible for a given task” (p. 338). Petty cash responsibility needs to be assigned to one custodian to be most effective, and that employee should keep it under lock and key as well as keep a detailed journal of use; this practice also goes along with physical control activities. Each transaction of petty cash needs to be documented on pre-numbered receipts, as well as signed by the custodian and the person receiving the payment. Doing so will allow audits to verify the amount in the account and the payments and be able to track if there is money missing at any given time. Another area that needs to establish responsibility is implementing personal passwords to access the company’s network. Using unique passwords will help identify a fraud or company violation should one occur. Using unique passwords also allows only those employees who are authorized and/or qualified to carry out specific tasks.

Recommendation is to record all the cash transaction as revenue upon receipt of the cash and ring it thru to get a firm record.

The Control Matrix A tool designed to assist in analyzing the effectiveness of controls, PCAOB Auditing Standard Number 5 – “Effectiveness of Control Design” Establishes the criteria to be used in evaluating the controls in a particular business process Steps in Preparing a Control Matrix STEP I: Specify control goals 1. Identify the Operations Process Control Goals -Effectiveness goals -Efficiency goals -Security goals 2. Identify Information Process Control Goals -Input Goals -Update Goals Operations Process Goals: For cash receipts process, two examples are: A:Timely deposit of checks B:Comply with compensating balance agreements with the depository bank -Other possible goals of a cash receipts would be shown as goals C, D, etc. and

Developing a business plan for an existing business or conducting a feasibility study for a new venture requires a thorough analysis of market conditions. Market conditions in your area have a significant impact on the profitability of your hotel or motel. The strength of the local lodging market affects how many rooms you can sell and the rates that you can charge. This guidebook will help you analyze your market so that you can gauge the potential of your operation and make more informed operating and investment decisions. On the pages that follow are a series of checklists to help you collect and analyze information as part of a hotel/motel market analysis. The checklists, tailored to the hotel/motel

Good cash flow is essential to every organization, including hospitals, where quality care of every patient is essential. A steady and consistent cash flow can help improve the hospitals borrowing power, which will increase and maintain the income level.

thus minimizing the amount of currency that the Company has on hand at any point in time during the week. Additionally, the use of the bank on the daily basis facilitates the control of cash because it creates a double record of all bank transactions - one by the Company and one by the bank. Also we recommend that all receipts be deposited in the