Strategic Cash Management in the Hospitality Sector - 275 Words

Strategic Cash Management in the Hospitality Sector (Essay Sample) Content: Strategic Cash Management in the Hospitality Sector Studentà ¢Ã¢â€š ¬Ã¢â€ž ¢s Name Institutional Affiliation Introduction The hospitality industry comprises of a wide range of activities. Service provision in this sector encompasses operations in food and beverage outlets like restaurants to lodging facilities where accommodation is available from small to large scale. Diversity in functional areas within the hospitality business creates a dependency of separate activities to each other. It is, therefore, more difficult for a manager to hold one activity accountable for its level of production. Inter-activity dependencies in hospitality businesses yield special attributes that provide information to determine accounting priorities and decisions made by managers. High perishable product use characteristic within the food, lodging, and conferencing setting highlights the importance of proper forecasting of demand in the hospitality business. In restaurants, for example, proper demand-based forecasting increases the availability of food options on a menu and decreases the amount of waste registered in low demand periods. With regards to accommodation, forecasting based on the demand for rooms can be done to facilitate decision making on appropriate pricing levels that will result in maximum revenue achieved (Guilding, 2014). Businesses in hospitality like hotels are known to have a high fixed asset investment into the business like the rent payable for the building, salaries of the administrative and operational personnel. This places a high priority on the sales that need to be achieved in order to break-even (cover the fixed costs). Analysis software applications like spreadsheets are used to monitor expenses incurred and revenue generated over periods to predict future sales (Harris, 2010). Activities like food production and presentation, room service, ushering in bars, illustrate that hospitality businesses remain highly labor intensive, unlike typical factory setups where com...