INTRODUCTIONPertemuan 1-2

Matakuliah : A1042/Accounting Software Package for Services

Tahun : 2010

Hospitality IndustryHospitality Industry:• Hotel• Restaurant• Club• Resort• Casion• Cruise ship• Theme parks• Recreation• others

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The Purpose of Accounting in the Hospitality Industry• Simple and important question for hospitality managers:

– What was the total sales level achieved by our business last month?

– What was our most popular menu item?– What was our least popular one?– What was the average selling price of our hotel rooms last week?

Was that higher or lower than our competitors?– Are we more or lest profitable this month than last month?– What is our company realistically worth if we wer to sell it today?

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• The questions that connot be best answered by using accounting information alone:– Our hotel swimming pool currently closes at 10:00 p.m.

Would we sell more guest rooms if the pool were to remain open 24 hours per day instead? How many?

– Should I select Jackie or Samuel as the person assign to train our new dining room wait staff?

– Should the size of the fish portion used to make our signature “Blackened Trout” be 8 ounces or 11 ounces?

– Would our country club members prefer to have an increse in the number of inexpensive, or of higher quality (but more costly) wines, when we create the club’s new wine list?

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• Accounting alone could not make the decisions called for in the questions above, when properly used, it can help you make better decisions about these types of issues than those that would be made by managers who do not understand how accounting could help them.

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Why Hospitality Managers use Managerial Accounting

• Hospitality accounting is not a separate branch of accounting, but it is a very specialized are that focuses on those accounting techniques and practices used in restaurants, hotels, clubs, and other hospitality businesses.

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Uniform System of Accounts for Hospitality

• Uniform system of accounts for the lodging industry

• Uniform system of accounts for restaurants• Uniform system of financial reporting for clubs

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Uniform System of Accounts for Hospitality

• Uniform system of accounts for the lodging industry (USALI)– USALI was developed in New York in 1925 by members

of the Hotel Association of New York City Inc. – The USALI developed Hospitality Financial and

Technology Professionals (HFTP) and the Educational Institute (EI) of the American Hotel & Lodging Association (AH&LA).

– www.ei-ahla.org

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Uniform System of Accounts for Hospitality

• Uniform system of accounts for restaurants (USAR)– Prepared for the National Restaurant Association (NRA) by

Deloitte and Touche LLP, assits restaurant operators by suggesting a common language for the industry and by giving them an opportunity to compare the results of one restaurant to another and one accounting period to another. In addition, it allow those managers using it to compare the financial results of their own operation to industry norms.

– www.restaurant.org

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Uniform System of Accounts for Hospitality

• Uniform system of financial reporting for clubs (USFRC)– Club management is another example of an industry segment

that requires specialized knowledge and thus, its own uniform system of accounts.

– The USFRC is a club accounting resource for club managers, officers, and controllers.

– It is produced through the joint efforts of Hospitality Financial and Technology Professional (HFTP) and the Club Managers Association of America (CMAA). The USFRC is a financial reporting system geared specifically to member-owned, not for profit city and country clubs.

– www.cmaa.org

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Hospitality Accounting Overview• Hospitality business operations cycles:

– Daily operating cycle that applies particularly to restaurant operations where daily sales revenue typcially depends on meal period.

– Weekly cycle, business travelers normally use hotels, motels, and other hospitality operations during the week and generally provide little weekend hospitality business.

– Seasonal cylce, that depends on vacationers to provide revenue for hospitality operations during vacation months.

– Generalized business cycle, will exist during a recession cycle and hospitality operations typically experience a major decline in sales revenue.

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• Accounting cycles, encountered in hospitality operations create unique difficulties in forecasting revenue and operating costs. – since hospitality operations are people-oriented and

people driven, it is more difficult to effectively automate and control hospitality costs than it is in other nonhospitality business sectors.

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11 of the most critical GAAP• Distinct business entity principle• Going concern principle• Monetary unit principle• Time period principle• Cost principle• Consistency principle• Matching principle• Materiality principle• Objective principle

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Hospitality Business Case

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Cash ReservesRaw Materials

and Labor

Account Receivable or

Cash

Finished Products

Used to Purchase

Generates

SuppliesProfits Produces

• The raw materials are processed (meals are produced, and guest rooms are prepared) by workers who create finished products. The money resulting from these sales is then used to buy additional products or, if profits are generated, some of it may be retained by the business. Professional accounting records the movement of funds during this business flow or cycle. In each section of the flow chart, transactions are made and recorded.

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For example, when a restaurant uses its cas reserves to buy steaks for esale to guest, an accurate record is made of the product purchased and the amount paid for it. Because the double entry accounting method is always used, a record would be made in at least two different restaurant accounts. In this steak example, upon their delivery, there would be an increase in the value of the restaurant’s food inventory and a corresponding decrease in the restaurant’s cash account (if the restaurant paid cash for the steaks) or an increase

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in its account payable total (if the steaks were purchased on credit). Purchase orders and vendors’ invoices make up a large part of the accounting documentation that will be analyzed by hospitality managers.

when the steaks are received, stored properly, and eventually prepared, money will be spen on payroll as well as the other ingredients required to sell the steaks. As a result, payroll records and records releted to purchases of equipment, supplies, and other food,

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In addition to the non-food items needed to operate the restaurant, are important documents in this segment of the hospitality business cycle.

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• In the hospitality industry, records related to various guest payment forms such as credit, debit, entertainment cards, cash, and checks are important to maintain.

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