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ACCOUNTING RECORD AND INTERNAL
CONTROL
Prior to opening your new hotel, you must establish anaccounting system. It is in your own best interest toinstitute and maintain a complete record of your entire
hotel financing transactions.
The law requires that you keep certain a accounting
records for income tax purposes, and the better kept
these recodes are the easier it will be to complete yourhotel
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will be to complete your hotelYear-end tax saving possibilities like depreciation on furniture,
fixers, equipment, and your buildingWell-documented accounting records will support the accuracyof your tax return. If your records are incomplete and. do notallow you, for example, to calculation that require you to paymore tax than you would if you kept proper records.
The actual books or records you keep will depend on the size,nature, and scope of your hotelt. Unless you have a back ground in accounting system, you willprobably want your accountant to set up an accounting system
for you. However, the more daily routine record keeping your dofor yourself, leaving only the month-end work for youraccountant, the lees your accountants cost will be.
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In addition, you would probably wiseto have your accountant prepareyour tax return since he or she will be
up to date on the most recent taxregulations and can help reduce theamount of tax your hotel has to pay.
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ABASIC
ACCOUNTING
INFORMATIONSome of the basic
information that anyhotel business needshave to a record of
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(A) Sales (sometimes called
revenue)
By the day, week and month, and
further broken down into cash or credit
(by type of credit card if necessary),
and by department(food &room
. Credit records are necessary to
determine the amount of account
receivable (money owed to you) at any
particular time. Electronic registers can
readily provide much of the detail
concerning sales without expensive5
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Operating expenses by type (for example, purchase, supplies, rent) in total bysales period, and even by department. In addition, uripaid expenses at sandytime need to be known since this form your accounts payable.
Payroll is a major expense for most hotels. Legal requirements determine the
detail that you just record. In particular, payroll in holdings for various level ofgovernment must be properly documented.
Inventory should be taken at least monthly &annually end, in certainHotel
, as frequently as monthly. Inventory must be separated bytype (food and beverage& room).POS& POM
can often to be used record reductions in inventory as a result of saleFor all sales and expenses it is important that you keep all documents supporting anytransactions.
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These documents include sales checks
and register tapes; purchase invoices
and /or receiving reports; ports;
canceled checks for both operating
expenses and payroll; and receipts or
memos for cash pay outs not otherwise
support by an invoice or check.
If you do wish to set up your own
accounting records with minimal help
from and our side accountant,
Understanding and managing financial
information, two other title in the self7
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ACASH RECEIPTSYour accounting system should be established so that it
gives you good control over cash receipts.
Good cash handling and internal control proceduresare not only important to the hotels owner or manger,
but also to the employees involved since a good
system
Will show that employees have handled their
responsibilities correctly and honestly.
All cash receipts should be deposited intact day in
the bank. A deposit slip stamped by the bank should
be kept as your receipt. if all cash received each day
is deposited daily. No one who handles it will be
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CASH RECEIPTS
It also ensures that no payment s ismade in cash on invoice. If this were
allowed, a dishonest employee could
make out a false invoice and collect
cash for it.
Employees who handle cash (and
other assets such as inventories)
should be bonded. In this way, losesare less likely to occur since the
employee knows he or she will have to
answer to the insurance company if 9
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CASH DISBRSEMNTS
For minor disbursements that have to be handled bycash, establish a petty cash fund. You should putenough cash into this fund to take care of about onemonths
Transactions. The fund should be the responsibility ofone person only; payments out of it must be supportedby a receipt, voucher, or the disbursement.
When the cash fund is almost used up, thesupporting receipts, vouchers, and memoranda can be
turned in and will be your authority to replenish the funwith cash up to the original amount. Receipts,vouchers, or memoranda turned in should be stampedpaid, or canceled in some similar way, so that theycannot be reused.
All other disbursements should d be made check and
supported by and approved10
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CASH DISBRSEMNTS
invoice. All checks should be numbered in
sequenced. Checks should be prepared b you
or a responsible person, but that other personshould gave no signing authority.
As checks are prepared, the related invoices
should be voided in some way so that they
cannot be reused. Be canceled in some wayso they cannot be reused.
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BANK RECONCILATION
One control that is necessary in a goodinternal control system is monthly bankreconciliation. At each months end, obtain astatement from your bank showing each dailydeposit, the amount each check paid, and
other items added to or subtracted from theband balanced. The canceled (paid) checksshould accompany this statement. Youshould ensure, through the reconciliation,
that your figure agrees with the banks figure. To ensure control, the bank reconciliation
should not be carried out by the person whorecords cash receipts or disbursements;
otherwise the reconciliation could be faked to12
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CREDIT
Most credit that your restaurant is likely to beinvolved with will be from national or international credit cards. Before accepting
any of these credit cards, you makenecessary arrangements with the credit cardissuer.
The most popular credit cards are visa,MasterCard, American Express, Diners,
Club, and Carte CARDS, YOU AREASSURED OF FULL COLLEFTION OFTHOE SGLES(ASSUMING THE CREDITCARD HAS NOT BEENBLACKLISTED),LESS THE CREDIT
card company charge.13
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CREDIT
Visa and caster card are bank credit cards, and salesslips made out using those cards and be depositedjust like cash the next day in the bank. With nonbankcredit cards you might not collect the cash for two orthree weeks even if you send in the credit card sales
slips promptly. Therefore, your bank credit cardsrather than the others if a customer has both.
Sales commission paid by you the credit card issuercan be as high as 6% of to the volume of sales. Most
recusants pay the higher rates, although you shouldrealize that, since the various credit card companiesare in completion, the rates may be negotiable to adegree.
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