Application of Management Accounting in Modern Hotel Management

After entering the new period, the hotel industry has achieved rapid development, but it is also facing challenges in all aspects. Based on this, many hotels have begun to consciously introduce management accounting in the process of operation and management, to stimulate management vitality and creativity, strengthen hotel budget management, data analysis, performance appraisal, evaluation methods, etc., so that hotels can avoid business risks to the greatest extent, show greater competitiveness, and provide customers with better hotel services and products while creating greater economic and social benefits for hotels. 

This article discusses and analyzes the feasibility and methods of the application of management accounting in modern hotel management. Management accounting is important content and branch of accounting. It is mainly used in the internal management of enterprise production and operation. With the help of the effective application of various information, it integrates business and financial activities and plays an important role in enterprise business planning, control, decision-making, evaluation, and many other aspects. 

Hotel management is a service-oriented industry. Facing a relatively complex and changeable market environment, most hotel management processes show rising costs and declining benefits. In this environment, it is imperative to realize the application of management accounting to enhance profitability. 

 

Feasibility of application of management accounting in modern hotel management

 

The feasibility of the application of management accounting can be analyzed and discussed from the following three aspects. 

 

(1) The responsibilities and functions of each branch of the hotel are clear

 

In the course of operation, the hotel provides customers with leisure, conference services, catering, accommodation, and many other services. The administrative department supports the business department in terms of logistics security and financial resources. The functions and responsibilities of each branch are relatively clear. In terms of organizational structure, it has the basic prototype of a responsibility center, which has a positive effect on the future development of hotel management. 

 

(2) The information management system is relatively complete

 

At present, hotels mostly use a PropertyManagementSystem in their operation and management, that is, hotel operation and management systems, such as international brand software Oprah and Fidelio, while there are also relatively complete software systems such as Lvyun and Xisoft in China. No matter what kind of software it is, the hotel management system has great advantages in a series of data mining, collation, classification, integration, and statistics. It can provide management accounting with relatively complete and real-time data information so that it can complete data analysis from multiple levels, multiple angles, and multiple dimensions. 

 

(3) Financial accounting and accounting have completed the informatization construction

 

Modern hotel financial management has popularized computerized accounting, which has greatly improved the quality and efficiency of the hotel's accounting. The effective application of management accounting requires the application of the more advanced information equipment and methods on the market at the current stage to gradually integrate the hotel series of business and accounting operations, to avoid the more serious information silos in information management. 

 

The necessity of the application of management accounting in modern hotel management

 

After entering the new period, modern hotel management has entered a new chapter, especially after the reform and opening up, various hotel types have emerged, such as budget hotels, bed and breakfast hotels, theme hotels, etc. Although this has promoted the prosperity of the hotel industry, it has also brought greater competitive pressure, and with the rapid rise in labor costs and material costs, hotels are facing the dual pressure of rising costs and declining performance. 

According to relevant statistics, before 2010, the profit of four-star hotels and above could reach up to 35%, but at the current stage, there are already a handful of hotels with gross profit of more than 20%. Because of this situation, hotels need to “open source” and “throttle” in parallel. While exploring the market, they need to strengthen internal management. As the core content of internal management, financial accounting management needs to be paid enough attention. However, at the current stage, some hotels are still stagnant at the financial management level. 

Accounting level, no professional, systematic, and advanced financial management model has been formed. Cost management is approximately equal to post-mortem accounting, resulting in the functional role of management accounting itself not being played. In this case, it is imperative to introduce management accounting and optimize the hotel's current operation and management methods and internal management methods. This is directly related to the long-term development of the hotel. 

 

The application of management accounting in modern hotel management

 

The full application of management accounting in modern hotel management needs to be carried out in the following ways. 

 

(1) Clarify branch management responsibilities

 

At the same time as the rapid socio-economic development, broader requirements have been put forward for hotel management. In this context, most hotels will have more branches to meet the specific needs of customers, and the functions and responsibilities of each branch are quite different, the source of customers is also relatively different, and the corresponding services and products are also one-to-one. 

To effectively improve the effectiveness and efficiency of operation and management, and strengthen the accuracy of service, it is necessary to clarify the management responsibilities of each branch of the hotel enterprise by the hotel structure and operating status quo, to steadily promote performance measurement →synthesis → analysis → assessment and evaluation. According to the size of the responsibility interval and the characteristics of the responsibility object, the cost center and profit center of the responsibility center can be subdivided. 

Some hotels with diversified businesses and large scale can set up investment centers on demand to meet the management and accounting needs of enterprises. Generally speaking, the operating income-generating department will be used as the hotel profit center and the administrative function department as the cost center. Among them, the profit center assumes responsibility for the operation. The main business responsible is to expand revenue and create greater economic benefits for the enterprise, while the cost center is to control capital expenditures and save costs. Both are building blocks for hotel operation and management. 

 

(2) Income refinement for market segmentation

 

Hotels are a very comprehensive service-oriented industry, which brings together entertainment, conference services, catering, accommodation, and much other content, which to a certain extent determines the diversification of its revenue sources. In addition, because it is greatly affected by marketing capabilities, natural and man-made disasters, and off-season and peak seasons, it is difficult to accurately estimate the number of team types of business it can undertake. 

In the operation and management process of many hotels, the daily income, monthly income, quarterly income, and annual income of the hotel are simply counted, but the income is not refined and classified. In the increasingly competitive hotel industry, to effectively improve economic efficiency, it is necessary to conduct a detailed analysis of various types of customer income, and to do a good job in revenue accounting and cost accounting, to clarify the profits that the corresponding customer types can bring to the hotel, and to effectively compare the series of data and information so that enterprises can make choices based on the application of their resources, and provide customers with corresponding products and services within the customer's consumption capacity, which is the best choice for both hotels and customers. 

 

(3) Building a comprehensive budget system

 

After entering the new period, the hotel industry has achieved relatively rapid development. At the same time, it is also facing a gradually complex and changeable market environment. At the macro level, hotel management is closely related to national policies and the market environment, while at the micro level, hotels will serve customers of different levels and qualities when operating, and customer needs show greater differences due to their differences. 

If there is a lack of a certain forward-looking and relatively perfect budget system, the hotel can only passively cater to customer needs, market changes, and policy changes, resulting in no rules and regulations for overall operation and management, and all management personnel is also struggling to cope, embarrassed, and waste resources and funds in vain, and it is difficult to produce an ideal operating effect. 

The construction of a comprehensive budget system can ensure that the hotel's operation and management are carried out on a stable and reliable track, and the overall management personnel can also work in an orderly manner by the corresponding systems, regulations, norms, processes, goals, etc., so that the overall operating state of the hotel is in an active advantage, even if there are various irresistible factors such as natural and man-made disasters, equipment and facility failures, and policy changes. Targeted corrections can also be made to the overall budget of the hotel so that the hotel is always on the correct track. 

The construction of a comprehensive budget system requires a good atmosphere and basic environment as support, and the following items can be focused on. 

1. First, all hotel staff is required to give them the correct understanding, including hotel leaders, management, front-line employees, etc., emphasizing full participation, to be able to maximize the effectiveness of the comprehensive budget, so that all hotel personnel can participate in related work towards a core goal.
2. Second, hotel leaders and management are required to give them sufficient support and attention. Because comprehensive budget management involves comprehensive, systematic, and global hotel management activities, it will not only involve the overall strategic goals of the hotel but also be inseparable from the daily management of hotel operations. Therefore, after receiving the full attention and support of leaders and management, comprehensive budget management can fundamentally promote the improvement of the level of hotel operation and management, so that it is in an advantageous position in the industry competition. 
3. Third, all the staff of the hotel responsibility center is required to participate in the overall staff, and the comprehensive budget is linked to all positions of the responsibility center, and the budget preparation is completed with the cooperation of all the staff, to improve the operability and quality of the budget preparation content so that it can effectively carry out specific guidance on the hotel's management and accounting. 
4. Fourth, the necessary assessments and evaluations need to be carried out regularly. Scientific, reasonable, advanced, and perfect performance appraisal can positively test the science and effectiveness of the hotel's comprehensive budget and use the evaluation results to determine the salary, bonus, punishment, and promotion of employees, to stimulate the enthusiasm and initiative of employees to a certain extent, so that they can invest more time and energy to complete the job tasks at the same time, to create a greater degree of cost savings and economic benefits for the hotel, which is of positive significance for the common development of employees and hotels. In this process, it is necessary to pay attention to the comprehensiveness and rationality of the assessment and evaluation. While paying attention to the results, it is possible to consider the enthusiasm of employees to complete budget management tasks, synergy, degree of improvement, and the significance of promoting the long-term benefits of the hotel. 
5. Fifth, the hotel finance department is required to be able to solve the many requirements and exposed problems in management accounting in a targeted manner, and as the leader, build, train, guide, and gradually implement a comprehensive budget system. And in the process of building a budget system, it is required to cover the following items: profit center and cost center expenses at all stages of the process, operating business, fixed asset purchase, replacement or renovation of parts and components, operating results, financing needs, financial status, cash income, and expenditure and other budgets. 
6. It is required that the overall cost and business budget can be prepared by fixed processes and norms, and then the financial department will conduct the overall review and summary to make it more feasible; the financial budget, financing budget, and investment budget are prepared by professional financial personnel and passed after the audit and review by the budget management department. 

Budgeting currently includes many forms of methods. For example, incremental budgets, rolling budgets, flexible budgets, regular budgets, zero-based budgets, etc. If the hotel's historical operating data is well preserved and the data are accurate, you can choose an incremental budget. The financial data or average business of the previous year or previous years of operation and management is the research object, and the possible changes in the current and future operating environment are analyzed, and the budget data is compiled in the relative proportion of increase or decrease. This method is simple and easy to operate, and the data collection is extremely convenient, which has a great effect on hotel operation and management. 

 

(4) Target cost method

 

Catering and guest rooms are the main units in the operation process of most hotels, but the effective control of catering costs has always been a difficult point for hotels to carry out cost control. The general control method usually selects the standard cost method, and the raw materials are calculated according to the standard formula to directly generate costs, and then the sales price is estimated in a fixed proportion based on its previous experience. After the completion of the sales business, the actual picking is carried out to calculate the cost of catering, and the difference between the standard cost and the actual cost is clarified. 

The standard cost will focus on the series of production after the product is put into production. The cost level is the result of the event, and it will not cause too much interference and impact the subsequent business operations. Therefore, the hotel management has not achieved the best cost control purpose. Compared with the standard cost method, the target cost method is mainly oriented to the customer and market demand, comprehensively analyzes customer demand, recognized functions, and prices, and starts to think comprehensively in the early stages of food planning and design, using value engineering to analyze functional costs, to achieve the goal of reducing costs and enhancing competitiveness. 

This kind of cost management method is based on the real competitive price of the product market, and the highest expected cost of services and products carried out under the condition that the hotel obtains the maximum profit from the product operation. Price-ledCosting is the cost calculation method determined by the market price, which is more in line with the concept of “customer-oriented” in modern hotel management. While cost control is carried out in the overall hotel operation process to achieve management goals, it is also of positive significance for the hotel to create greater economic and social benefits and promote the long-term development of the hotel. 

 

(5) Bonded and accounting processing of pre-deposit items after the "camp reform and increase”

 

Generally speaking, hotels cannot be invoiced when they receive the corresponding pre-deposit but there is no economic transaction between the two parties. However, if the enterprise has signed a property service agreement, it can issue a value-added tax invoice at the corresponding tax rate, and as far as corporate finance is concerned, it is generally based on service facts to confirm business income. As far as taxation is concerned, there is an obligation to pay taxes after the invoice is issued, but the hotel does not account for the relevant taxes and fees when the income is still undetermined, which will cause the hotel to file taxes and pay taxes. 

There are certain differences. In this case, you can choose to adjust the bookkeeping method according to the actual operating conditions of the hotel. After the corresponding pre-deposit has been collected and the invoice has been issued, this part of the payment can be included in the pre-received accounts, and then the pre-deposit will be transferred out when the business sales tax is calculated so that when the income is confirmed, the pre-deposit is added to the income and there is no need to calculate the tax amount so that it can be more convenient for subsequent pre-deposit statistics, and always maintain the consistency of tax returns and tax deductions. 

After the "business reform and increase”, a series of businesses such as hotel operating income tax have been greatly affected, and the tax filing system has been gradually refined and strict. Therefore, it is required that hotels fully consider relevant factors when calculating the corresponding taxable income in their operations. For example, when the cross-month business has been invoiced, the confirmed income of the current month needs to be subtracted from the pre-deposit income that has completed the tax payment and the invoicing of the previous month is the income from a cross-month business, so that the accurate taxable income can be calculated. 

 

(6) Marketing optimization

 

In the traditional form of hotel management, finance and marketing belong to different departments, and the finance department will supervise and audit the key businesses of the marketing department in addition to the necessary financial management, but this kind of post-mortem supervision model has caused the marketing department to conflict with the relevant management work of the financial department to a certain extent. 

Based on this, the financial department is required to be able to comprehensively consider the source of marketing business under the concept of industry-financial integration accounting, and provide financial support at all stages such as business negotiation→ contract signing → business processing →fund recovery, to assist the hotel in avoiding risks while realizing pre-event→in-event→ post-event control and supervision management. 

During business negotiations, the financial department is required to intervene in management and select a value evaluation model for benefit evaluation according to customer needs; when clarifying the sales price, in addition to the comprehensive operating cost, it is necessary to consider factors such as suppliers and opportunity costs, which can make the intervention process more accurate and scientific; when signing a contract, in addition to elaborating the obligations, rights, and responsibilities of both parties in detail, tax risks, payment methods, etc. should also be considered, to provide corresponding space for risk control, tax planning, and cash flow management; 

During business processing, the intervention and support of the financial department can assist it in obtaining corresponding cost data, and to a certain extent ensure the smooth advancement of cost management. ; And in the handling of business, give full play to the supervision role of the financial part, so that hotel operations can realize the integration of invoice flow, capital flow, and contract flow, and avoid most tax risks; when recovering funds, the business department, and the finance department need to coordinate and cooperate to carry out corresponding collection work so that the business department can complete the return rate assessment index on time. 

 

(7) Financial management and internal control

 

1. Money management and inspection. 

The safety of funds and the efficiency of their use directly reflect the level of operation and management of modern hotels. Therefore, it is necessary to strengthen the risk grasp in the management and accounting process and focus on improving the efficiency of the use of various parts of the funds. The following points need to be grasped: 

1. first, is the authenticity review of the recorded funds. For example, you can compare and analyze the number of rooms rented and cleaned on the day of the hotel, the number of accounts, and the number of invoices, verify the sales pricing and prices, and then combine the hotel's own operating characteristics and current situation to clarify the risk points and formulate targeted written audit reports; for the problems that arise in the audit process at each stage, build a rating coordination mechanism, a three-level feedback mechanism, a manager coordination mechanism, etc., to adjust the deviation of funds in and out of each process stage promptly, and avoid the risks that may arise in the flow of funds. 
2. Second, strengthen the review of hotel cash collection and payment, reserve funds, and other funds; implement two-line management of fund collection and disbursement, conduct on-site inspections of various cash points of the hotel from time to time, and issue well-organized written confirmation reports; strengthen inspections of advanced revenue points where there is a vacuum, such as the down payment in the lobby and the night chess and card room. Professionals can be arranged to inspect the number of people, time, production, and other income elements on site to ensure their authenticity. 
3. Third, integrate resources. Realize the coordinated and unified dispatching and management of the centralized hotel funds, arrange payment plans at all stages, maximize the stock of funds, ensure the safety of funds, and actively promote the efficiency-enhancing income management of various types of funds. 
4. Fourth, credit account management, according to the customer's consumption situation and debt repayment ability, combined with the hotel's operating status, formulates different credit rating authority, for customers with accounts, the salesperson should be urged to follow up, combined with the collection assessment, according to the collection situation to confirm the final collection level, get a collection confirmation letter, and if necessary, legal means can be introduced to minimize the problem of bad debts. 

2. Asset management. 

The management of various types of hotel assets is a long process of mobilizing all staff. The following points need to be grasped: 

1. First, it is necessary to clarify the types of hotel assets, such as kitchen utensils, knitwear, low-value consumables, fixed assets, etc., according to the ease of management of the assets themselves, an asset management ledger can be established, and a top-down management mechanism and feedback mechanism can be constructed. 
2. Second, because of the difficult issues in asset management, such as kitchen tableware management, because many tableware purchases do not match the physical objects, there will be abnormal losses due to more external factors, so it is more difficult to manage. Because of this situation, the operation process of taking pictures, labeling, and retaining samples can be established and improved, to pass the inventory again and again, so that managers can better understand the physical objects and avoid damage to assets caused by human factors. 
3. Third, build an asset management center and implement it layer by layer. For example, when the equipment is in use, build an equipment use and maintenance manual, which requires equipment users to be able to use the equipment by the prescribed process, and to be able to send it to the maintenance department in time according to the instructions for use; when reporting losses, managers are required to pay attention to the engineering identification of the damaged equipment and enhance the residual value recovery value of the equipment; during the inventory of funds, it is necessary to pay attention to whether the funds are in a static state, and check them one by one using a physical comparison table; during the asset assessment, it is necessary to list the true profit and loss amount other than the reported loss rate, and implement the responsibilities to specific departments, Specific positions, implement corresponding commercial law measures. 

 

(8) Management of accounting personnel

 

1. Combing work. 

It is required to take regular and irregular combing work every year to build management accounting standards that keep pace with the times, clarify job standards, work processes, series of operations, etc. at all stages, and formulate standardized work schedules so that employees in all positions can know what they should do in each period and how to do it. 

2. Build a financial work plan and clarify the time node. 

The construction of a work plan should include the basic work for the entire year, supplementary and upgrading work for the hotel's weaknesses, group activities, special training, etc. so that the management accounting work can not only revolve around the hotel's operation and management, but also the hotel's shortcomings, the improvement of various businesses, the enhancement of departmental cohesion, and the operation of talent reserves, to achieve better management results. 

3. Build and improve the degree of internal control. 

First, implement a full-staff assessment system and formulate quantitative and qualitative assessment indicators, and the assessment at all stages should not only stay in subjective evaluation but also ensure its visualization and quantification. Second, to achieve the continuous adjustment and improvement of the internal control degree, and to optimize the internal control degree according to the changes in the hotel's business goals and business philosophy, so that it can always play a role in promoting the development of the hotel. 

 

(9) Build a performance evaluation system

 

In the process of hotel operation and management, the application of a series of goals, systems, and methods, as well as the judgment of whether they can achieve the expected goals, all require objective performance evaluation. The main task of hotel performance evaluation is to measure the achievement effect of each goal and the outstanding contributions of each position. 

Generally speaking, when hotels conduct performance evaluations, they will focus on financial indicators, such as whether the revenue indicators are completed, the profit indicators are completed, and whether the cost control meets the hotel's standards. But in fact, the real operating status of the hotel and the performance of the responsibility center are not only reflected in financial indicators, but other factors also are equally important, and hotel management pays special attention to the communication between hotel managers and customers, and the user's sense of experience has largely demonstrated the value of services and products. 

Based on this, it is necessary to build a relatively advanced performance evaluation system, such as a balanced scorecard, which can meet the performance evaluation of various departments and levels of the hotel to a certain extent. The balanced scorecard can evaluate the performance of all levels of the hotel from multiple levels, angles, and dimensions, following multiple national and industry standards, and requires hotel managers to be able to reflect on whether the performance meets the requirements of hotel management from the following aspects: 

1. First, at the customer level, reflect on whether customers are satisfied with the hotel's services and products. 
2. Second, at the financial level, observe and organize the overall status of financial indicators to judge the satisfaction of each owner and customer. 
3. Third, at the business process level, reflect on the benefits of the service process and product sales, and judge whether it can be further optimized to enhance the core benefits of the hotel. 
4. Fourth, at the level of learning and growth, allocate more time, energy, and funds to the training and education of managers and front-line employees at all levels, and use a balanced scorecard to optimize the operation and management of the hotel at all levels to varying degrees, which is conducive to the long-term development of the hotel. 

 

Conclusion

 

In summary, this article discusses and analyzes the application of management accounting in modern hotel management, emphasizes the importance and necessity of the application of management accounting for hotel management, and requires hotel leaders and management at all levels to pay sufficient attention to it, in all aspects of hotel management, to achieve the effective integration of management accounting, and play its main position to create greater economic benefits for enterprises. It is also necessary to rationally adjust and optimize the application of management accounting to the real operating conditions of the hotel, effectively improve the level of hotel management, and provide customers with better services and products.

Keywords: Management accounting; Modern hotel management; application.