GENERAL MANAGER MANUAL ( PART II FINANCE )

Part 2 - REVENUE CONTROL

INTRODUCTION

·         The purpose of the following scope of work "check-list" should be to allow General Managers to support the Accounting department functions and to make sure that operation standard or Policy and Procedures should be established.

CASH SALES TESTING

·         The hotel should perform independent Cash Sales Tests for all cash departments on a quarterly basis.

·         Test should be well conducted and followed-up.

CREDIT POLICY / ACCOUNTS RECEIVABLE

·         A valid, updated credit policy should be established and adhered to. (The current limit at XXXXXXXXXXX Sudirman and XXXXXXXXXXX Rasuna for example is one million rps.)

·         Write-off procedures should be implemented and adhered to.

·         Summary page of history (inc. key dates & action taken) should be sent to Jakarta head office on an annual basis where greater than materiality level.

·         Doubtful accounts reserves should be calculated reviewed & deemed as adequate.

·         A full analysis of the bad debt reserve should be produced annually and signed off by the Financial Controller.

·         Accounts receivable ageing & number of days should be calculated correctly i.e. based on gross YTD revenue, inc. VAT, with the removal of all credit balances & deposits.

·         XXXXXXXXXXX procedure should be adhered to regarding cheques received by mail. I.e. all cheques received should be first logged by the General Manager's secretary before passing for processing.

·         Credit balances in City Ledger should be well documented, acknowledged by Controller & cleared at least twice a year.

·         Payments should be applied on a daily basis to the right account.

·         Bills should be systematically raised & posted within 3 working days of a function or group departure (Check-Out).

·         Credit cards accounts in City Ledger should be reconciled on a monthly basis. XXXXXXXXXXX hotel refunds should be fully documented & approved by Financial Controller or his / her Assistant.

ROOMS REVENUE

·         Accounting Office should review and audit registration cards for cash deposits and credit card ore- authorization on a monthly basis.

·         Credit Card accounts should be reconciled on a daily basis.

·         Room Revenue discrepancy Reports should be prepared and followed-up daily.

·         Random physical checks on vacant and out-of-order rooms should be conducted at least once a month and documented

FOOD & BREVERAGE

·         Open cheques controls for all outlets should be performed monthly and documented

·         Point of sale systems must be checked weekly (moves, cancellations, open bills, etc)

·         Recap of Administration and General Advertising and promotion entertainment cheques should be recorded daily and approved by the General Manager/Financial Controller or their deputies.

·         Banquet Controls :

·         Contract should be always prepared and signed by the customer

·         Function sheets should be issued with sequential numbering

·         Function sheets should be logged

·         Banquet invoice should be raised per agreement and function sheet.

REVENUE CONTROL                                              

OTHER OPERATED DEPARTMENTS

·         A store rentals & showcase register should be in place.

·         Barter Agreements should be; registered, approved on summary sheet by the GM and accounted for per Policy and Procedures.

GENERAL

·         All Rebates or Recapitulations should be initialed by the Financial Controller or his/her Assistant.

·         Point of Sales totals for Food and Beverage / Other Operating Departments should be balanced daily against the Front Office system.

·         Food & Beverage / Other Operating Department prices in Point of Sale system should agree to listings / menu and should be subject for review by the Financial Controller / Assistant twice 

GENERAL LEDGER

PRINCIPAL GUIDELINES

·         Contract agreements summary and approvals should exist as per Policy and Procedures.

·         Insurance Register & summary should be available.

·         Accruals / prepaid registers should exist, with no items below materiality level.

·         Non standard accruals should be kept to a minimum.

·         Expenses / accruals should be completed and reasonable.

·         All General ledger reconciliation's should be prepared monthly and approved by the Financial Controller or his/her Assistant on a quarterly basis.

·         General Manager, and entire Executive Committee, city ledger personal accounts should be maintained and settled monthly

·         Bank balances should be reconciled on a monthly basis and approved by the Financial Controller or his/her Assistant.

·         XXXXXXXXXXX policies and area instructions for leases / services contracts should be adhered to.

·         Month-end Journal Vouchers checklist should be approved by the Financial Controller or his / her Assistant.

PAYABLES / DISBURSEMENTS

PAYABLES

·         All payables should be correctly documented, approved and stamped paid.

·         Goods received without invoice should be reconciled quarterly. XXXXXXXXXXX accounts over 12 months should be cleared.

·         MEPS, Current Account, Management fees, XXXXXXXXXXX marketing fees and all other fees should be paid on a monthly basis.

·         Manual cheques control procedures should be followed i.e. posted to back office and approved by the Financial Controller or his/her Assistant.

·         Supplier invoices should be controlled against Purchase Requests and discrepancies should be checked and action taken.

·         Month-end closing and balancing procedures should be followed before closing i.e. inventory system and accounts payable.

DISBURSEMENTS

·         Expense reports should be submitted correctly, timely and approved.

·         All petty cash vouchers and receipts should be stamped / perforated "Paid" before check should be signed by Management.

PAYROLL

·         Personal file should exist for all staff members.

·         All additions / deletions to personnel files should be approved by the Financial Controller and the General Manager.

Monthly salary should be:

·         Supported by time record

·         Approved by the department head

·         Supported by electronic time record.

·         Compliance tests should be completed by accounting at least every six months to confirm payroll agrees with records.

·         No cash payroll paid (unless due to local restrictions).

INCOME TAX (2004)

For staff who earns less than 2 million rupee there is no income tax payment – this is the majority of staff in hotels.

For managers who earn above 2 million per month, the income tax is usually paid by the hotel. The reason for this is that it is normally included as part of the package for managers.

It can be included in the manager’s salaries and deducted but this is customarily not the case. In any event managers will probably request a higher salary if the income tax is not covered by the hotel.

Whatever income tax is due to the government, the hotel is responsible for making the payment on behalf of the employees.

FORECAST REPORTING

PRINCIPAL GUIDELINES

·         The Monthly Forecast report should be accurate - variance at 1, 12 months should not exceed 5% at Profit before Fixed Charges level. I.e. the actual month against forecast of 3 sample months, add together and average out.

·         Revpar level i.e. actual month against forecast of 3 sample months, add together and average out.

·         Food and Beverage Revenue level i.e. actual month against forecast of 3 sample months, add together and average out.

·         The Working Capital should be completed.

·         The Working Capital should be accurate - variance should not exceed 5% at operating Cash flow level (inc. Capex) i.e. actual month against forecast of 3 sample months, add together and average out.

·         General Manager and Department Heads should be involved in preparing Rolling and Cash flow Forecasts.

CAPITAL EXPENDITURES / DISPOSALS

PRINCIPAL GUIDELINES

·         All Capex (Capital Expenditure) above US$ 200 if not in the budget should be approved by Jakarta head office (if in approved budget should be supported by a Capital Expenditure Application and duly approved as per XXXXXXXXXXX manual instructions.

·         Purchase orders should only placed with suppliers after the Capital Expenditure Application has been approved.

·         At least three different quotations should be provided to support each Capital Expenditure Application.

·         A calculation of return should be included to support Capital Expenditure Applications where applicable.

·         The General Manager and Controller should approve all assets disposals. No CAPEX items may be disposed of without the written consent of the owners.

·         Monthly capital forecasts should be reasonable (within 5%).

·         Post project audit should exist where completed (within 5%).

CASH MANAGEMENT

GENERAL

·         Double signature procedure should be in place for bank transactions.

·         Bank information should be up-to-date with all signatures on file.

·         XXXXXXXXXXX bank accounts should be open in the name of the Hotel / Owning Company in use.

·         The hotel should regularly control the bank conditions applied.

·         Credit Cards electronic acceptance should be in use.

CASH

·         House floats should be kept to a minimum and in line with local currency devaluation levels.

·         XXXXXXXXXXX cash drops performed by cashiers should be reported on daily lists & countersigned by a witness.

·         The General Cashier should open the deposit safe in the presence of a witness to match envelopes and deposit slips.

·         The General Cashier should reconcile the float at least twice a week.

·         Float receipts should be documented and signed by the Controller / Assistant.

·         Cash Floats should be counted at least monthly with the appropriate documentation and petty cash vouchers should be recorded in the General Cashier reconciliation.

·         The recipient should sign all petty cash vouchers.

·         Banking should be carried out on a daily basis.

·         Banking slips should agree to the total banking amount.

PURCHASING / INVENTORY

PURCHASING

·         The Department Heads, Financial Controller and the General Manager should adhere to an internal approval cycle.

·         The procurement of goods, materials and services should be made for the best quality at the best value for money.

·         Three quotations should be obtained at all times, unless procurement should be made from a nominated supplier whose prices and services have been approved in advance.

·         Project related purchases should always be backed by full documentation and three quotations.

·         Receiving procedures should be as per Policy and Procedures, i.e. no goods accepted without purchase order.

·         List of nominated suppliers should be available and approved by the General Manager / Financial Controller / Materials Manager.

STORED ITEMS

·         Catalogues of Store items (Food and Beverage / General) should be approved by the Financial Controller.

·         Purchasing from sole manufacturers / nominated suppliers should clearly be mentioned on the Purchase Requests.

·         Minimum / maximum levels of stock should be in place.

·         Re-ordering should be based on the minimum / maximum levels.

·         The Purchasing Department should purchase all stored items.

PERISHABLE ITEMS

·         A market list should be prepared daily.

·         The Purchasing Department should place orders and, if placed by the Chef, a written procedure should be in place.

OTHER PURCHASES

·         Systematically, a purchase order should be prepared and signed, as per XXXXXXXXXXX Policy and Procedures, prior to any commitment to a supplier.

RECEIVING

·         A copy of all outstanding Purchase Requests and market lists should maintained by Receiving

·         Purchase orders and deliveries should be reconciled

·         Variances should be passed over to the purchasing officer for investigation

INVENTORY

·         All purchases received and stores issues should be recorded on a daily basis

·         All stores should be counted annually where inventory should be held  on the balance sheet

·         Inventory Discrepancy reports should  be investigated and signed off by the financial controller or his her Assistant

·         Bar par stocks should be maintained

·         All bottles issued to bars should  be labeled and stamped

SYSTEMS INTEGRITY

The following systems should be checked on a regular basis:

Ø  UPS in all offices should be tested every 6 monthly or as necessary.

Ø  Back Office

Ø  Front Office

Ø  Point Of Sale server

Ø  Telephone Charging system

Ø  Accounting disaster recovery plan should be in place. This should at a minimum include the financial systems.

Ø  Back-up Log; this should cover all systems.