Archive for the ‘club controller’ Category

What I Expect from My Club Controller

Monday, November 16th, 2015

The controller fills an extremely important role in any hospitality operation’s management hierarchy.  In addition to performing financial accounting, management, and reporting functions, he or she is the subject matter expert for the owner(s) and general manager on all matters relating to sound fiscal policy.  As such the position of controller has specific responsibilities and requirements relating to every area of the operation and provides key information to decision-makers.  Here is a summary of my requirements for the position:

1.  Written standards, policies, and procedures (SPPs) for all aspects of the accounting function.  Not only is this important for consistency sake, but also to make all managers and supervisors aware of their responsibilities.

2.  A written internal control plan that stipulates key fiscal practices, identifies areas of potential problems, and specifies necessary separation of duties.

3.  Coordinate and supervise the annual budgeting process.  This requires establishing the necessary timeline and deliverables in the budgeting sequence.

4.  Implement Zero-Based Budgeting throughout the club.

5.  Establish a system of real-time accounting club-wide.  The Tools to Beat Budget program is an excellent example of how this can be done in all departments.

6.  Assist department heads in implementing departmental benchmarking.  Prepare the Executive Metrics Report and include it with the monthly financial statement.

7.  Coordinate and attend the monthly review of operating statements with each department head and the general manager.

8.  Conduct a review and analysis of one major cost category each month with the aim of constantly reviewing the enterprise’s cost structure and taking steps to reduce costs when opportunities present themselves.  Report findings to general manager.

9.  Routinely prepare the following reports:

  • Weekly Revenue Report for the general manager and heads of profit centers.
  • Pay Period Summary Report for the general manager and all department heads each pay period.
  • Monthly Aged Accounts Receivable Report for the general manager.
  • Updated cash flow projection on a monthly basis for the general manager.

10.  Training of managers and supervisors in all fiscal responsibilities and requirements, including:

11.  An outreach program whereby the controller visits each department head on a monthly basis to discuss needs and issues.

12.  In private clubs, serve as the club’s representative on the finance committees, attending meetings, providing information as requested, making professional recommendations regarding fiscal issues, and keeping the general manager fully informed on all significant matters addressed by the committee.

A smooth accounting function requires that all members of the management team understand and meet their responsibilities in a timely and accurate manner.  It is essential therefore that the controller engage with the full management team to ensure this happens.  The benefits to the operation include greater real time knowledge of the enterprise’s financial performance, more timely information to support decision-making, and the full confidence of the owner(s) or board that their significant capital investment is in good hands.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

 

Seven Things I Want My Controller To Do

Monday, June 1st, 2015

As a hospitality General Manager, there are seven things I want the Controller to do beyond the normal bookkeeping, accounting, and financial reporting responsibilities.

  1. Develop written Accounting Standards, Policies and Procedures.  Fiscal responsibilities are too important to leave to chance or oral history.  Every aspect of budgeting, accounting, financial reporting, inventory, payroll, member billing, expense coding, accounts payable, etc., should be detailed in written form.
  2. Develop a written Internal Control Plan spelling out the separation of key duties, creating pre-numbered accounting forms, and creating a clear audit trail for all aspects of accounting processes.
  3. Train all department heads and managers, who play any role in the accounting processes of the operation, to ensure a common understanding of their fiscal responsibilities.  Accounting on the Go is a great tool to do this!
  4. Ensure all areas of the operation are benchmarked in detail with departmental benchmarks being reported to the Controller for inclusion in the Executive Metrics Report as part of the monthly financial reporting package.
  5. Institute the Tools to Beat Budget program whereby all managers with bottom line responsibility track their revenues and/or expenses in real time, thereby exercising greater control over their budget and financial performance.
  6. Establish a clear process for departmental budgeting and monthly review of financial performance.  Such focus on the numbers will make performance and accountability a routine discipline at the establishment.
  7. Establish a robust outreach program whereby the Controller visits each department head on a monthly basis to discuss challenges, work through issues such as late accounting submissions, and offer guidance and help.  Such ongoing collaboration builds teamwork and breaks down departmental silos and barriers to efficiency.

This array of initiatives when fully implemented and faithfully supported by the General Manager will bring the operation to a high state of efficiency and performance.  None of these initiatives are difficult in and of themselves, but they do require discipline and the necessary will to make them happen.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Performance Leadership and the Internal Consultant

Monday, May 18th, 2015

The term leadership is most often thought of in conjunction with leading people, but given the underlying definition that leadership is influence, there are other types of leadership such as “thought leadership,” “management leadership,” “best practice leadership,” and ultimately, “performance leadership.”  While most club controllers supervise (or lead) but a handful of people, it is in the later types of leadership where they have the opportunity to influence a large number of club employees as well as the success of the club.

As we discussed in last week’s email – GM’s Job One – the club’s general manager, in addition to the all-important strategic requirements of the position, has his or her hands full with the many aspects of member relations.  This, then, necessitates a strong #2 who can promote, implement, and watch over the many management disciplines and best practices that are at the heart of a well-run club.

Often clubs have an assistant manager or clubhouse manager who serves as the second in command, but this position is primarily to ensure the smooth daily functioning of club operations with a heavy focus on food and beverage, as well as activities and events.  Seldom does this person have the time or focus to press forward with organizational issues and disciplines that cross departmental lines.

So who on the club’s staff is most likely to have the necessary knowledge and experience to formulate and implement club-wide performance initiatives?

In most cases the logical choice would be the club controller, particularly if you understand that the responsibilities of this position go well beyond accounting and financial reporting.  Of all club department heads, the controller should have the greatest understanding of the disciplines that underlie business success.  Also, a controller by career choice is a “numbers” person and has daily intimate contact with the measures of financial performance.  Last, but certainly not least, the controller in most cases has the greatest in-depth knowledge and familiarity with spreadsheet software – the instrumental tool of financial analysis.

For all these reason then, the controller is the ideal person to take the lead in enhancing the club’s performance.  But how to go about it and where to start?

As with any sort of leadership, the prime actor must have the knowledge; a plan of action and priorities; the skill set to effectively communicate with, instruct, and mentor followers; various teaching aids and tools; and most importantly the authority to direct implementation – either delegated from or with the explicit support of the GM or club board.

While every club will need to establish its own plan and priorities depending on its unique circumstances, my list of requirements would include:

  • Written Accounting AND Personnel Standards, Policies, and Procedures.
  • Written Internal Control Plan, recognizing that such a plan is not a separate, specialized system within the club.  Rather, it is an integral part of each department and the club as a whole; as such, internal controls are management controls.
  • Detailed budgeting guidance and timeline to improve the accuracy and ease of budget development.
  • A Linked Policies Database on the club’s server to provide easy access to key organizational and training material for the entire management team.  Such a database also makes it far easier to keep material up to date and to notify managers of changes to policy and procedures.
  • The discipline of Monthly Review of Financial Statements with individual department heads.
  • Tools to Beat Budget or some similar method of real-time tracking of revenues and expenses.
  • In depth Benchmarking of operations by all department heads.
  • Enhanced financial reporting package to include some form of Executive Metrics Report.
  • Training of department heads in all the requirements of their fiscal responsibilities using Management Disciplines on the Go, Accounting on the Go, 101 Tips to Improve Your Club Operations,  or other similar tools and resources (not only does this improve the club’s performance, but it enhances the skill set and career prospects of department heads).
  • Ongoing outreach by the controller to department heads for the purpose of problem discovery and performance enhancement (by doing this the controller, in effect, becomes an internal business coach or consultant assisting department heads in continual improvement of their department’s organizational efficiency and performance).

Some may object to this expansion of the controller’s duties, and no doubt such a program of performance leadership will require extra effort, but after initial implementation, the improvements in organizational efficiency club-wide will reduce some aspects of the accounting office’s workload.  Not every controller will possess the skills to be an internal consultant, but others may relish the challenge and opportunity to think and work “outside the box.”

In embracing the concept of the internal consultant understand that everything does not have to be done at once.  Carefully tailored pilot programs prioritized by the Pareto Principle, taking advantage of the enthusiasm of early adopters, and utilizing the discipline of incremental progress, will get you to the ultimate goal, as Jim Collins say in Good to Great, “turn by turn of the flywheel.”

Lastly, there is also the great personal satisfaction to be gained in the role of leadership, instructing, mentoring, and “consulting” with department heads to improve their operations and performance.  Various authors have long advocated that the basis for any act of leadership is service to others.  The service of performance leadership is its own reward – for the club, its member, the management team and employees, and not least of all – the club controller.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Adding Value – The Club Controller

Monday, May 10th, 2010

The Club Controller is an important member of the club management team.  There are a number of constituencies that rely on the expertise and efforts of the Controller, including the General Manager, the club’s Board or ownership, the department heads with bottom line responsibility, and, of course, the employees who jobs depend upon the solvency of the club.

The Controller’s role is more than that of an accountant who, according to accounting definitions, records and reports financial transactions.  In addition to maintaining the General Ledger, Accounts Payable, Member Billing and Accounts Receivable, Payroll, and Financial Reporting, the Controller plays a vital role by assisting managers in maintaining the profitability of the club.

The functions of the Controller tend to fall into a routine of monitoring daily activity, processing bi-weekly payroll, ongoing processing and payment of invoices, monthly member billing, and end of month closing and financial reporting.  Once a year, the Controller has a central role in the annual budgeting process for the club.

But the Controller also provides guidance and assistance to the General Manager and department heads in meeting their fiscal responsibilities to the club and its members.  These managers have a broad range of detail- and labor-intensive requirements and must deal with the daily challenges that arise in a high quality service environment.  By keeping in mind the underlying principle of service-based leadership – of providing the necessary tools, training, resources, and support to key constituents – Controllers should offer targeted outreach assistance to managers; particularly to department heads – those key individuals with bottom line responsibilities.

Outreach services include:

Ensuring that department heads have clear accounting guidance:  Written accounting standards, policies, and procedures should be available to all managers.  While Club Resources International has produced and offers a great many of these, detailed procedural guidance should be prepared and implemented at the club level.

Assisting department heads with club-required programs:  Department heads may need assistance with benchmarking spreadsheets, Tools to Beat Budget, Annual Budgeting, and preparing for monthly meetings to review financial performance.

Providing timely operating data:  Those with bottom line responsibility have need for timely information about their operations.  The two most important are Weekly Revenue Reports and Pay Period Summary Reports that allow managers to monitor their revenues and their single largest expense – payroll.

Ongoing training on accounting issues:  In any complex operation there is the need for ongoing refresher training on key matters.  Staff turnover and the constant focus on daily operations sometimes make it difficult for managers to keep accounting issues foremost in mind.  Controllers should monitor departmental compliance with accounting policies and provide refresher training for arising issues and ongoing problems.

Making periodic visits to department heads:  These visits, based on the premise of  “How can I help you,” “Is there anything the Accounting Department can do to assist,” or “Your department seems to struggle with timely inventories.  Is there anything we can do to help?”  When coupled with a service-based attitude, such visits will go a long way in improving accounting processes while building a positive team spirit among managers.

Conducting an accounting audit of each department:  This annual check-up should be conducted with an attitude of helping department heads.  A simple checklist of important accounting considerations will provide both the department head and the Controller with a guide to identify and address areas needing improvement.  After the audit is completed, the Controller should work with the department head to draw up a plan of action to address any issues or concerns.

While the foregoing may sound like a lot of additional effort for the Controller, a club with a smooth functioning accounting process will usually perform better.  Additionally, many of the continuing irritations for the accounting staff arise from operating departments failing to meet accounting requirements in a timely and accurate manner.  These two benefits alone will make the Controller’s extra efforts well worthwhile.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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