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Understand financial reporting systems and processes

Post Date: 01 - Dec - 2019

Unit 5: Principles of Financial Performance Management in Hospitality Operations

Unit reference number: F/504/2221 
Level: 4
Credit value: 7
Guided learning hours: 48

Unit aim

This unit has been devised to assess learners’ understanding of how financial documents can be developed and applied in hospitality industry contexts.

Unit introduction

Being able to evaluate the financial performance of a business is crucial to the role of the hospitality manager. This unit introduces learners to the financial accounting systems used to measure economic activity and the basic forms in which financial statistics are conventionally presented, as well as techniques for their analysis and interpretation. Learners will develop the skills needed to monitor costs, make predictions, evaluate the process of effective control of resource allocation, including shortfalls, and prepare financial cases for development projects.

Learners will explore how accounting is used within organisations to plan, control and evaluate activity, with a focus on the use of forecasting in setting realistic financial targets. The unit will introduce learners to the role of accounting in making management decisions, demonstrating that financial management goes beyond traditional bookkeeping and accounting.

Learning outcomes and assessment criteria

In order to pass this unit, the evidence that the learner presents for assessment needs to demonstrate that they can meet all the learning outcomes for the unit. The assessment criteria determine the standard required to achieve the unit.

On completion of this unit a learner should:

Learning outcomes

Assessment criteria

1     Understand financial reporting systems and processes

1.1            Identify systems for the management of budgets and finances

1.2            Explain how financial targets can be set

1.3            Analyse the use of financial information contained in management reports

1.4            Explain the purpose of cost centres and devolved budgets

1.5            Describe how financial forecasts can be developed based on historical financial data

2     Understand the use of capital and revenue budgets in a hospitality operation

2.1            Explain the differences between capital and revenue budgets

2.2            Analyse the budget approval cycle and processes

2.3            Describe the techniques used by hospitality operations to manage capital and revenue budgets

2.4            Explain the methods used to identify variances in budgets

2.5            Describe possible courses of action to rectify variances in budgets

3     Understand how to manage cash flow

3.1            Analyse the basic techniques and processes for using cash- flow projections to manage the flow of cash within a hospitality operation

3.2            Explain how a profit and loss account should be interpreted

3.3            Explain how hospitality businesses manage cash flow

4     Understand how to prepare financial cases for development projects

4.1            Analyse the principles and techniques associated with preparing financial cases for development projects

4.2            Explain how to prepare a financial case for a project within own place of work

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