Examine the accounting procedures at the hotel. What procedures do you find to be a problem? Explain why.
Bookkeeping procedures
Bookkeeping procedures is about tracking the expenses of the business, and it allows the proprietor and the accountants to follow the financial transactions of the business (Bragg, 2013). Simply put, effective bookkeeping is all about effective crediting and debiting procedures. From the scenario of the Strawberry Hill Inn, the bookkeeping procedure of the business is not effective. The ledger, where the front desk manager make daily entries of the transactions, has no proper procedure of recording the debit and the credit transactions. For instance, in the sample ledger provided the two lunch meals and the room service were recorded as “2 lunches @ $40.00, ” and “breakfast for 2 @ $ 32.15.” from the records, it is evident the manager did not calculate and record the total amount paid per each item. This makes it hard to balance the debit and the credit transactions of the business. Keeping the ledger books balanced, and current is essential for the business especially if they want to attract investors or even apply for loans from the financial institutions in future. Bragg (2013) asserted that lenders and investors will want to review the accounting books to see whether they are accurate and complete before granting a loan.
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Date and item recoding
The manager also does not document proper dates for the transactions. It proper accounting procedures, the manager/accountant, should record all transactions for a particular date properly. In the scenario of Strawberry Hill inn, the manager has mixed up the dates in a single ledger. For example, the ledger has dates for the month of March, August and December all mixed up. This makes it hard to look for a particular transaction since they are not systematic and are disorganized.
The ledger also has recorded all the transactions of meals, gift shop and room service under one ledger. This makes it difficult to finding the profits of a particular item service offered by the business such the profits for the room service, meals, and the gift shop
Evaluate the current hotel accounting system. Make some recommendations about the system they use, in general
The current accounting system of Strawberry Hill Inn is vertical where the junior employees from every section reports all their transactions to the front desk manager who do the simple accounting. This is poor system as it makes it difficult to trace the profits from each section easily.
The recommendations I will propose to Strawberry Hill inn is to empower all the sections to do their own accounting recording. That is the gift shop, room service and the restaurant for meals to record their individual transactions before forwarding the complete ledger books with receipts to the front office manager.
Similarly, another recommendation is that the management can retain their accounting system, but the front office manager should have separate ledger books for every section. That will make it easier to trace transactions and to calculate profits.
Make your recommendations as to how Strawberry Hill Inn can increase In-House sales and improve the overall office operation
To increase their in-house sales, the management of the strawberry inn should do research in the industry and offer the goods and services that their clients’ need. Moreover, the proprietors and the management should use the power of the internet and be informed. Strawberry Inn is a family business which has operated for many generations using same methods. It needs modern methods of operations to satisfy customer needs and boost sales.
To improve office operations, the management should improve the knowledge and productivity of the workers. Moreover, they should automate their office transactions to avoid manual operations of workers depositing receipts only in the morning.
References
Bragg, S. M. (2013). Accounting best practices. Hoboken, N.J: John Wiley & Sons.
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