Accounting is the administration of money, and it is a key element of the business. Accounting is the process of preparing financial statements, and also involves budgeting, transactions, and Cost control. In the words of Cote(2007), the accounting process is a method of monitoring the amount of money, studying results in order to understand them and take the right decision. An accounting system that is properly implemented is essential for any company in order to keep the business effective. For every successful business, it is essential to maximize profits, reduce losses, and at the while ensure its standing as a responsible business in the community. Coltman(1989) stated that the cost control systems are accounting-oriented information system. But Cost control is different with the accounting systems. it permits managers to know what’s occurring to the cost so that a rational decision can be taken, and appropriate action is taken to fix the problem. Accounting is a way of expressing money that measures cost control in the hospitality industry, through the use of labor, food, and drink and cost control for energy.
Coltman(1989) stated that labor is one of the major costs resulting from the high rate of employee turnover. It’s an invisible cost that impacts productivity, efficiency at work. There are many factors that cause employees to leave, including that the majority of the hospitality establishments don’t pay employees fairly and they work under the wage rate, have a high burden of work, lack of education, and lack of benefits (Coltman1989). Industry experts Soltani, Lai, Paul &Liao (2009) said that the service industry has to deal continuously with clients, ensuring that workers’ flexibility is the most important factor in ensuring the high turnover costs . There are ways to decrease staff turnover through better selection of an integrated strategy for HR to addresses the goals of the company, which include managing employees’ attributes, their work schedules, encouraging employees to collaborate, offering adequate training, monitoring their performance and report, and motivating staff with rewards (Soltani, Lai, Paul &Liao 2009). In addition, businesses must hire the right people at the right time depending on the skill needed. But, the majority of Australian hotels are continuing to pay for high turnover costs (Davidson, Timo & Wang 2010).
Furthermore, many hotels in Canada are embracing the new technology that includes electronic check-ins and guest reservations and paying bills using mobile devices. These technologies provide top-quality and fast service in a physical setting without the expense of labor (Jayawardena, Lawlor, and Grieco, 2013).
Serlen, Bruce (2014) discovered that the traditional twenty-four hours of room service can be very expensive, and can increase the cost of labor .and reduce productivity. While, many full-service hotels are switching to a different model of room service and towards modern technology, which helps in reducing the cost of labor, for instance, The Hilton, Grand Hyatt in New York. The Mover, Serlen, Bruce (2014) stated that the latest technology is bringing many advantages to the hotel industry, and in particular, guests were seeking applications for ordering room service using iPad or smartphones, which are efficient and removes the ordering position of the hotel, for example at Hilton New York, operate the luxury grab and go market. But, a hotelier expert stated that the customers are still requesting traditional service for rooms since they expect a personalized service that they pay for from the hotel, and are not expecting automated service delivery in this business (Serlen, Bruce, 2014).
Coltman,(1989) declared that the largest evident cost of the hospitality industry is food and drinks. Food is a crucial element of the hospitality sector. The primary function of the food and beverage is to control costs and enhance restaurant, hotel profitability through the proper selection of suppliers inventory control, the implementation of the standardization of recipes, and developing new foodservice systems that can stop overproduction and wastage within the business, and also concerns about portion control and more preventative measures for quality like quality audits, review of menu designs training on quality and evaluation of suppliers. There are many reasons why hotels do not need to suffer the loss of food that is a major cost to the industry including poor stock rotation or storage at insufficient temperatures and inadequate portion control can lead to food waste (Colman 1989). According to Vaughn, Raab, Nelson & Harrah (2010) identification, the Las Vegas hospitality industry’s revenue was down due to the increase in food prices between 2006 and 2007; and the food and beverage division has been faced challenges to improve productivity and cut costs of waste, inefficiency and wasted production. Thus, the industries that are located in Las Vegas supported kitchens to concentrate on specific productions cost, costly menus and portions of menu items, and the activity-based costs (ABC) method to manage control of production. This method is able to reduce the monthly allocations for every kitchen’s manufacturing (Vaughn, Raab, Nelson & Harrah in 2010). Noone & Coulter (2012) stated that numerous hospitality establishments or restaurants are well-versed in the use of technology for controlling food costs like the point of sale system and self-service kiosks as well as efficient cooking equipment as well as inventory management systems ( continuous inventory card). These solutions help to ensure the product’s quality and standards that keep the cost low through the speed of service and ordering like in U.S fast service restaurants were faced with the same issues due to rising operating costs, however, they are utilizing automation in the back of the house, specifically in kitchens, like a deep fryer that has an automatic lift commercial oven, dual gills which help decrease cooking times and ensure an even cooking process. This is why quick-service restaurants were getting high efficiency, superior quality, and improved performance by implementing the latest technology within the restaurant (Noone and Coulter2012)
In addition, Ninemeier (2001) says that a cost control system for drinks keeps the standard through a standard recipe for drinks, including appearance and taste, and specifying ingredients, garnish, and the size of the drink. The tool for controlling portion helps to make the drink more consistent including shots glasses, cocktail jiggers, or shot glasses. They also have an automated drink system that dispenses measuring quantities of alcoholic drinks. Additionally, Ninemeier (2001) stated that cash handling procedures are handled by bartenders who are responsible to manage the bar and cash inventory. In addition, Borchgrevink & Anchill (,2003) discuss that theft and spillage are due to dishonest employees in the industry, and as a result hospitality industries do not generate any money. So, hotels have computerized beverage control systems that offer dates for financial transactions along with the same quality, consistency, and speed. A crucial aspect of the service-oriented industry, the hotel manager must provide training for food and beverages to employees that increase their awareness of the cost of food as well as food quality, and also awareness of the portion control technique ( Borchgrevink & Anchill,2003).
Controlling energy costs is a key aspect in the industry of hospitality. In service industries, the most components that use energy are air conditioning. Energy can be saved by changing the temperature of air conditioning with large windows that allow natural light and installing superior insulation to lower costs and conserve energy. According to the study of Nizic, Karanovic & Ivanovic (2008) in order to manage energy consumption, the majority of hotels have an Intelligent Room System, specifically in hotels such as Sol Garden Istra. This system combined the control of water and energy consumption along with heating-cooling control and efficiency. Sol Garden Istra has great success by utilizing a smart room system, thermal isolation of the hotel, and carefully selecting the lighting and equipment. They also provide staff with training to improve their awareness of the environment in the process (Nizic, Karanovic &, Ivanovic 2008). Additionally, Holiday Inn, Hilton, and Marriott also implemented an energy-efficient lighting system, and install an intelligent room technology system (Nizic Karanovic, Karanovic, and Ivanovic 2008).
Additionally, Stipanuk (2001) stated that sustainability is a major business-related and is an essential element for the hospitality industry. experts advocate sustainability as there are substantial financial benefits like changing lighting bulbs that consume less energy as well as bathroom fittings that reduce the flow of water. This was followed by Stipanuk. (2001) was the first to establish the Bass Hotel (Inter-Continental properties) should support the energy savings program by devising specific strategies to cut down on energy costs and use. Inter-Continental has come up with several steps to conserve energy, like outsourcing the laundry, centralizing the process and installing switches in an ideal location, installing flow controllers for showers, and faucet aerators, and providing adequate lighting and smart room systems and roof insulation. In the end, the 467 rooms at the Inter-Continental London have been saving 47 percent on gas usage and 22 percent on electricity usage. The 844-room hotel Inter-Continental Chicago has been reaping savings in energy costs in the amount of $250,000 (Stipanuk, D.,2001). To help, the government is offering awards for businesses that adopt energy-saving strategies along with grants are offered to businesses that are involved in recycling programs and use renewable energy sources (Stipanuk 2001).).
To conclude accounting is the primary accounting process that involves budgeting, transaction, and Cost control. It’s the process of determining the value of money, studying the results, gaining an understanding of them, and making better decisions. Accounting is the language used to manage money, which is used to measure costs in the hospitality industry by labor, food and drink, and energy cost control. Utilizing these tools for measuring hotel managers and owners have the knowledge they require to maximize their performance in every operational aspect, from the food and beverage departments to labor control to energy management. They can lower costs as well as make a profit while accommodating guests.
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