Archive for the ‘expectations’ 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!

 

 

Managers’ Fiscal Responsibilities

Monday, September 8th, 2014

Managers with bottom-line responsibility are responsible for the financial performance of their areas of the operation.  There are a number of specific elements associated with this responsibility, which is broken down into the following broad categories:

Budgeting.  Budgeting is the process of establishing a financial operating and capital plan for a future fiscal year.  Budgets are formulated using past history, benchmarks, knowledge of upcoming events or trends, and one’s best professional judgment.

Comparing Actual Performance to Budget.  Once approved, budgets are the fiscal plan for the year.  Managers are responsible for comparing actual performance to budgets on a monthly basis and intervening as necessary to achieve budget goals.

Achieving Revenues.  Achieving revenue projections is one of the two primary means of meeting budgets (the other being controlling expenses).  Managers are responsible for monitoring revenues and aggressively intervening when revenues fall short.

Controlling Cost of Goods Sold.  Departments with retail operations must also control the cost of goods sold and investigate when these costs are out-of-line.  Managers can do this by ensuring accurate monthly inventories, carefully tracking departmental transfers and adjustments, and using retail buying plans.

Controlling Payroll Costs.  Payroll is the single largest expense in most operations and the most significant expense that managers must control.  In order to control payroll costs, it is vital that managers have timely and accurate data regarding their departmental payroll costs.  Essential to getting this data is having staff correctly follow timekeeping procedures, setting schedules to meet forecasted levels of business, and the dogged determination to track payroll expenses closely to ensure that budgets are not exceeded.

Controlling Other Expenses.  Other Expenses comprise all of the other departmental operating expenses.  Managers can control these expenses by carefully reviewing expenditures on a monthly basis, using some means, such as Tools to Beat Budget, to track other expenses in real time, and by periodic in-depth reviews of significant expense accounts.

Benchmarking.  Benchmarking is the act of measuring operating performance.  Each department head should track detailed benchmarks for his area of the operation

Pricing.  The starting point for meeting revenue projections is proper pricing of products and services to ensure a sufficient markup to cover associated expenses.  Pricing should be reviewed on a periodic basis to assure that budgeted margins are being maintained.

Purchasing.  Some managers are responsible for purchasing materials, supplies, and inventories for their departments.  Managers must be familiar with all company purchasing policies to properly fulfill these responsibilities.

Expense Coding.  Managers are sometimes responsible for ensuring that invoices for all purchased items are coded to appropriate expense accounts in a timely, accurate, and consistent manner.

Inventory Management and Security.  Given that high inventory levels tie up capital that might be put to better use elsewhere, managers must use common sense and good business judgment to maintain inventories at levels that balance business demands, lower pricing for bulk purchases, perishability of stock, and available warehousing space.

Inventories must be kept secured with access limited to as few individuals as possible.  Storerooms must be kept neat, clean, and organized to facilitate physical inventory counts and minimize damage and spoilage.

Merchandise inventories should be purchased using Open to Buy or other retail buying plans, thereby constantly monitoring inventory levels and product mix while minimizing markdowns.  All special sales of merchandise during the year should be noted and marked-down items analyzed compared to buying plans to ensure that lessons are learned from buying mistakes.

Asset Management.  Managers are responsible for protecting the assets assigned to their departments and in their care.  Periodic physical counts are required for assets under your control:

  • Resale inventories—monthly to determine cost of goods sold.
  • Supply inventories, such as linens, china, and glassware— quarterly to ensure you have sufficient stock on hand.  Some consumable items, such as ware washing chemicals, cleaning supplies, and paper products should be inventoried more frequently.
  • Furniture, Fixtures, and Equipment inventories—to ensure presence and accountability.

Internal Controls.  Internal Controls are defined as the systems and procedures established and maintained to safeguard a business’ assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies.

Internal controls, while often considered an accounting function, are actually a function of management.   The ultimate responsibility for good internal controls rests squarely with managers.

Point of Sale (POS) Transactions.  The initial entry for most revenue data is through point of sale systems.  Managers are responsible for training their employees to correctly use the POS system and to retrain as necessary when a pattern of errors is evident in their departments.

Accounting Standards, Policies, and Procedures.  Managers should be familiar with and follow all requirements of their company’s accounting standards, policies, and procedures and recommend changes as necessary.

Summary.  The thoroughness and professionalism with which you meet these fiscal responsibilities will have much to do with your success as a manager.  Consider which ones you currently do well and in which areas you need to improve your performance.

Ed Rehkopf, Excerpted from Leadership on the Line – The Workbook, Clarity Publications, 2009

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!

 

What I Expect from my Club Controller

Monday, June 16th, 2014

The controller fills an extremely important role in a club 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 the Tools to Beat Budget program so that all department heads record and monitor their revenues and expenses in real time.

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

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

7. 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.

8. 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.

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

  • Basic Accounting and Financial Management.
  • Tools to Beat Budget.
  • Benchmarking.

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

11. 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!

 

What I Expect from My Department Heads

Monday, April 7th, 2014

There are a number of things I expect from all of department heads regardless of their specific areas of expertise and function.

Leadership – I expect a consistent service-based style of leadership for all departments.  Service-based leadership naturally promotes employee empowerment which is absolutely essential to delivering remarkable service levels.

Organizational Values – Strict adherence to and promotion of the enterprise’s culture of service is necessary to ensure that all employees understand the values that underpin our business.  The consistent example of managers at all levels is a must.

Annual Departmental Goals – Each department head must develop departmental goals based upon the club’s annual goals.  These goals have an impact on department budgets.

Standards, Policies and Procedures – These are necessary for all areas of the operation to promote standardization and efficiency.  They are also the basis for developing pertinent training material for each department.

Tools to Beat Budget – The discipline of tracking revenues and expenses in real time makes department heads more knowledgeable about their enterprise and enables them to take timely action to correct deficiencies.  It’s also an incredibly effective tool for improving the ease of developing departmental budgets, as well as their accuracy.

Benchmarking – Every department head must benchmark their payroll expenses in detail.  As the single largest expense in most departments, it is essential that they track and monitor this expense.  In addition, they need to benchmark their respective operations to ensure they have a better understanding of their business.

Accounting Submissions – There are accounting requirements for all department heads and they are expected to meet these in a timely and accurate manner.

Human Resource Requirements – I expect each department head to have a thorough knowledge of all HR requirements and strictly adhere to these.  There are too many legal and liability issues to do otherwise.

Monthly Budget and Work Plan Review Meeting – Every month after the financial statements are distributed each department head will meet with General Manager and Controller to review financial performance and progress on work plan accomplishment.  Department heads must be prepared for this meeting by ensuring their Tools to Beat Budget binders and benchmarks are up to date, can explain any variances, and can offer plans to remedy revenue shortfalls and expense overages.

Departmental Training – Department heads are responsible for determining their individual department’s training needs and developing necessary training programs to meet those needs.

Disciplined Hiring – It is a requirement that department heads develop the skills and disciplines to hire well.  The quality of operation’s staff is too important to leave to chance.

Organization, Cleanliness, and Maintenance – All departments must be well-organized, clean, and well-maintained.  Department heads are responsible for their areas of the operation and must coordinate with the Facility Manager or Executive Housekeeper to ensure cleaning standards are established and met, as well as ensuring all facilities, furniture, fixtures, and equipment are properly maintained.

Safety and Security – Each department head must determine work hazards and security issues for their areas and develop the policies and procedures to address these.

Team Players – Each department head must realize that they are part of a team dedicated to the common purpose of providing a superior hospitality experience for customers/guests/members.  In order to meet the challenges of such an operation, they must be mutually supportive and work together as a team.

While there may be other things that I want to stress to my subordinate managers from time to time, these are my basic expectations.  Other general managers may have a different set of expectations, but in any case it’s good to provide your subordinates with a list of those requirements.  It becomes the basis for their efforts and focus to develop themselves as managers and leaders.

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!

What I Expect of My Club Catering Director

Monday, April 25th, 2011

As every club manager knows, catering is the most lucrative part of a club’s food and beverage service since it adds revenue volume, economies of scale, and certainty to a very uncertain and volatile business.  Lucky is the club that has the appropriate facilities and venues, as well as a board that recognizes the contribution and necessity of a robust catering business to the club’s bottom line.  But having the facilities and strong backing of the board is only the first step in a successful catering operation.

Having a disciplined and detail-oriented Catering Director to oversee the operation is the single most important contributor to success in catering.  Not only must the club find and hire such a professional, but the General Manager must clearly spell out his or her expectations for the Catering Director.  Here are my requirements:

1.      Conduct a market analysis of the club membership and the areas around the club to determine potential demand for catering and meeting services.  This analysis should consider any rules or restrictions the club has on accepting outside business, as well as identify and analyze in depth any competition the club will have for these services.  This analysis should be reviewed and updated annually.

2.      Prepare an Annual Catering Sales Marketing Plan and budget.  This plan should identify potential target markets and how to best reach them, specific programs or campaigns to market club catering and meeting services, monthly sales goals, and measures and reports to track efforts to meet the plan.

3.      Prepare appropriate collateral materials to support the catering marketing effort.  These should include a proper presentation folder and brochure with lots of professional photographs of your club and venues; sample menus and price lists, room diagrams, planning checklist, planning worksheet, sample room set-ups, sample contract, and all club policies relating to catering.  These materials tend to be quite expensive, but they are important selling tools in your catering business.  There are other low or no-cost options available as you can see here.

4.      Organize the planning and execution of the catering department to include the one-time development of the following:

a.       Room diagrams for all venues to include dimensions, capacities with various set-ups, and occupancy limits; location of electrical outlets, lighting and sound controls, telephone jacks, HVAC controls; availability of wi-fi; availability of window shades and lighting controls to darken rooms; and a list of available audio/visual and computer equipment.  Diagrams should be prepared for each venue with various set-ups to show prospective clients and as a guide to help club staff set up rooms for specific events.

b.      Menus and pricing for different meals and types of events, including sit-down banquets; receptions with buffets, serving or carving stations, or passed trays; continental breakfasts; and meeting breaks.  Experience has shown that a limited number of “packages” aid in the selling process and reduce the time investment in custom menu planning.  This is not to say that the club won’t do custom planning, but anything that limits the up-front investment of planning time makes the operation more efficient.

c.       Menus and pricing for different alcoholic beverage arrangements such as open bars, cash bars, beer and wine service, cordial service, champagne service.

d.      All catering policies to include hosting policy, deposits, minimums, guarantee counts, cancellations and postponements, service charges, client decorations, entertainment, corkage and plating fees, client supplied food, donations, rentals, methods and timing of payments, fire safety, etc. must be determined, formalized, and printed up to provide to prospective clients.

e.       A catering contract that includes all the policies and notes who, if anyone, is allowed to modify the contract at the event.  This is useful protection for the club when, in the flush of a great celebration, the client’s daughter tells the staff that she wants to keep the open bar going for another hour.

f.       Written policies and procedures for all the various meal, alcoholic beverages, and meeting set-ups.  This is used to train the banquet staff to a common standard for set-ups, preparation, execution, breakdown, and cleanup for events.  This is a major one-time effort, but it will save the club hours in efficiency of operations, while providing consistent quality service to all clients.

g.       Training material for catering staff covering all aspect of catering preparation, set-up, and service.

h.      Agreements with rental and special services firms for tents, limousines, valet parking, audio-visual, telecommunications, computers, party favors, and decorations.

5.      Access membership demographics for celebratory dates such as anniversaries and birthdays to be used to “sell” private functions and parties to club members.  It is also important to “mine” the data of members’ business ownership as these companies will be prime target markets for business meetings and events.

6.      Benchmark usage of all venues to determine utilization rates with the aim of establishing policies and pricing strategies to maximize use and revenues of key dates and times for prime function space.

7.      Benchmark activities by type such as banquets (plated and seated), receptions (buffets, serving stations, passed trays), and coffee breaks.  Track number of events, number of attendees, revenues, average revenue per event by type of event.  This information can be used to budget, establish future period goals, and help establish policies and pricing to maximize revenues by type of event.

8.      Prepare a Weekly Catering Sales Report for the general manager to include catering event and revenues for the week, key benchmarks, prospecting efforts, call reports, and 60-day rolling forecast of upcoming events.

9.      Conduct after-event calls and surveys of catering clients to determine level of satisfaction with event and service.  The focus of such surveys is to capture future business while improving any areas of dissatisfaction.

Like any other product or service, the club’s catering function must stand head and shoulders above its competition and continually strive to improve its quality, service, and standing in the community.  Such dedication to quality and continual process improvement will ensure the club the success of its catering operation.

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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