Archive for the ‘meeting budgets’ Category

Monthly Review of Financial Statements

Monday, May 5th, 2014

General Managers should conduct monthly reviews of Operating Statements with department heads.

In order to ensure that the operation meets the financial objectives of its annual operating budget, it is imperative that all department heads monitor their monthly performance closely and be prepared to answer questions about their department’s performance and give reasons for any significant variance from budgeted amounts.

On a monthly basis after the final statement is prepared and distributed, the Controller will set up a schedule of meetings for department heads to meet with the General Manager and Controller to review their department’s performance.

  • Department heads will bring their individual copies of the Tools to Beat Budget binder to the meetings, as well as their departmental benchmarks.
  • Department heads must also be prepared to present plans to remedy significant or ongoing shortfalls in revenue or overages in expense categories.
  • Managers can best prepare for their monthly meeting by ensuring that their Tools to Beat Budget binder is accurate and up-to-date.
  • They must also review their financial statements in detail, noting any under budget revenue and over budget expense categories.  Items with significant deviations from budget must be investigated so that these anomalies can be explained to the General Manager.

Significant shortfalls in revenue should be analyzed and a plan drawn up to address the shortages.  Such a plan would normally include marketing efforts to increase customer traffic, special events or sales to increase revenues, or price increases to generate more revenue from the same volume of business (though managers must always keep in mind that volume may decrease with any price increase).

Often a particular expense category will be over budget due to timing issues – this happens when a budgeted expense is incurred earlier in the fiscal year than originally anticipated.  Such an “over budget” occurrence will come back in line with budget in future months at the time when the expenditure was actually planned.  Sometimes, the increased expenses may be the result of an unanticipated event, such as equipment breakdown and repair or an arising opportunity necessitating the purchase of new equipment or materials.

In any case the department head must be prepared to explain discrepancies and answer the General Manager’s questions about budget variances and what actions will be taken to remedy the situation.

Ed Rehkopf, Excerpted from Basic Accounting and Financial Management for Managers, Hospitality Resources International

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!

 

Two Initiatives to Improve Your Club’s Performance

Monday, November 30th, 2009

In these difficult times Club Managers are anxious to find ways to improve their club’s performance.  While there is no magic pill to enhance service and the bottom line, there is the discipline of two time-tested ways that will make a huge difference in how your club performs.

1.  Work Planning for Club Department Heads

The job of General Manager is challenging, requiring a broad-ranging skill set covering a variety of management disciplines and operational experience to do well.  Yet, too often General Managers get overly involved in day-to-day operations and fail to meet their strategic responsibilities.  When this happens, the club limps along, reacting to the crisis-of-the-day instead of proactively addressing issues through long-range planning.

In some cases the underlying cause of this involvement is weak leadership and managerial development among subordinate managers.  The best way to overcome this weakness is to develop subordinate leaders through training, mentoring, and establishing “stretch” work plans.  Though it is initially time-consuming to do so, developing club department heads into strong leaders and managers will allow the club to routinely function at high levels and the General Manager to focus on long-range matters and strategic issues.

While ongoing training of subordinate managers will improve their skill set, they must also develop the essential discipline of establishing and meeting goals to improve their operations.  The General Manager can foster this discipline by doing the following:

  • Preparing detailed, formal Work Plans with timelines and milestones for each department head.
  • Requiring department heads to prepare departmental goals and plans for their departments.
  • Ensuring that department heads benchmark their operations to provide objective measures of progress.
  • Giving honest performance reviews based upon measurable, objective criteria.

When the General Manager takes the time to develop formal work plans for each department head, both the General Manager and the department head know what the goals are and when they are to be accomplished.  Establishing timelines and milestones allows the General Manager to monitor progress toward completion of goals.

2.  Tools to Beat Budget

The club’s accounting staff prepare monthly financial statements for each month of the fiscal year.  Statements are distributed to department heads around the middle of the month for the previous month’s activity.  Unfortunately, this means that department heads do not know how their departments performed until at least two weeks after the end of the period.  When a department’s performance does not meet budget, the department head does not know until after the fact and cannot intervene in a timely manner.

Ultimately, department heads are responsible for the financial performance of their departments and are accountable for those results.  Since they are responsible for everything their department does and fails to do, they cannot rely solely on the accounting office to provide them with the timely information they need to properly monitor and take action to ensure they meet their budgets.

Tools to Beat Budget is a program designed to help department heads monitor key elements of their budget in a more timely manner.  Further, it requires department heads to monitor revenues and expenses on an ongoing basis, which keeps them in closer touch with their actual performance compared to budget.  Finally, the data accumulated during the course of the year using Tools to Beat Budget makes department heads more knowledgeable about their operations and makes establishing future budgets far easier since all the historical information is in one place – the Tools to Beat Budget binder.

These two initiatives when fully implemented and conscientiously and consistently followed by club department heads will make a significant difference in the performance of your club.  And the sooner you implement them, the sooner you’ll see the results.

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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Slashing Overtime With a Simple Change

Monday, July 20th, 2009

I was on the road again last week, traveling to Richmond to speak to the Central Virginia Chapter of the Hospitality Financial and Technology Professionals.  Attendees met Thursday afternoon at the Willow Oaks Country Club to hear my presentation on Tools to Beat Budget – a program that provides a disciplined approach for club Department Heads to monitor their revenues and expenses in a more timely manner.  In addition to keeping managers in closer touch with their numbers, the program has proven itself to be an important tool in preparing more accurate budgets with far less effort.

One of the more interesting things to come out of this meeting during a discussion of overtime costs, was the fact that none of the clubs represented had modified their workweeks and/or pay periods to reduce overtime.

The next day while making the same Tools to Beat Budget presentation to the management staff at another Richmond area club, the General Manager directed his Controller to investigate modifying their workweek to take advantage of this straightforward strategy to cut OT.

To find out more about how you can dramatically cut your overtime costs with one easy change, click here.

As with so many things that club managers can address during this economic downturn, much of it is about focusing on the basics.

Next week:  8 Key Basics to Successfully Operating a Club

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 – where membership and all resources are FREE!

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