ACCOUNTING PROCEDURE IN A HOTEL (A CASE STUDY OF ROYAL MARBLE HOTELS, BENIN CITY)
1.0 BACKGROUND OF THE STUDY
The purpose of this research work is basically to explain the accounting procedure in a hotel.
For a proper understanding of the study, it is wise to first of all explain the meaning of hotel. Thereafter, the meaning of accounting will also be looked into in a separate term. Also, the meaning of accounting procedure will be observed, then, accounting procedure in relating to hotel firm will be explained. For a proper understanding, Royal Marble hotel Benin City was used as a case study.
Hotels follow the general principles of accounting, but because of the exclusive nature of a hotel when compared to other organization, hotel accounting departments use terms that may not be familiar to accountants in other organizations or industries. Accounting terms related to the management of guest payments, charges and disputes can be confusing to outsiders, but they represent everyday concepts in the hotel industry.
Accountants recognize the importance of proper hotel accounting procedures, as it is the foundation upon which all financial decisions are based. They have a knowledgeable and dedicated hotel Accounting Team to ensure the highest level of support possible to each investor. With a comprehensive centralized hotel accounting system, they provide essential hotel accounting services to investors interested in accounting for hospitality.
The practice of accounting has been a practical one since the inception. This is one of the notions in the writers mind when carrying out this study. Here, practical involvement in this work unveils the most of the accounting operations as are being obtained in the hotel.
A dedicated Property Accountant whose responsibility is to manage the accounting function supports each one of a hotel. The duties include the balancing and auditing of the managers' and employees' work, maintenance of the hotel's accounts receivable and accounts payable, processing of employee payroll and ensuring adherence to accounting standard operating procedures by all departments within the hotel. In a hotel, the properties Accountants have the additional responsibility for the Human Resources function. While a Regional Director of Human Resources supports them. Accountants in some hotel have the opportunity to develop their Human Resources skills including interviewing, recruiting, counseling, coaching, disciplining and motivating.
1.1 THE PROFILE OF ROYAL MARBLE HOTEL
Royal Marble Hotels is located at about 2,200 meters above sea level on a green hill valley and Government Reservation Area (GRA) in the ancient kingdom of Benin City, "the heart beat of the nation." The hotel is nested in an area of colourful garden flower and is conveniently located close to the city center, the Benin Airport, the Oba of Benin Kingdom palace, the National Museum of Benin of historical greatness.
Royal Marble Hotel's primary mission is to bring in hospitality industry beyond mere accommodation, but providing a peaceful and secured homely environment for visitors or travelers from all parts of the world.
Royal marble Hotels, an ultramodern hotel, first in the Niger-Delta zone of the blackest populous nation, Nigeria. In the very heart of the ancient city and charming city of Benin, Royal Marble Hotels was planned with all the character of a small town with gardens, the room, suites, restaurants, conference and banquet halls, bar, swimming pools, gym, etc. all flow into each other, creating a unique and welcoming atmosphere; The national museum, zoo, golf field, among other things and some are 1 kilometer from the hotel.
The hotel houses 110 elegant and well equipped suites that come in numerous sizes and structures, to accommodate the tastes of various guests.
The services at the hotel include a bar, laundry services, a pool bar, restaurant, an internet café, gym facilities, a casino, security services, and many more services. The restaurant is a fully serviced 24 hours and offers numerous dishes including African and Cosmopolitan cuisines.
Activities that are available for guests include trips to the national museum, the zoo, golf fields all situated within a one kilometer radius.
1.2 STATEMENT OF THE PROBLEM
Some of the problems that are involved in accounting in a hotel system are as follows:
There are often confusions as the accountant cannot judge which accounting procedure will be best suited for the smooth functioning of a hotel.
Another problem that is associated with hotel is lack of existence of a trained accountant in some hotels. It is quite unfortunate that some hotel management in Nigeria feel that the services of an accountant are not relevant to their businesses. It is also unfortunate that some who know the usefulness of an accountant in their businesses do not have the financial means of employing a professional accountant.
Other problems include the unavailability of reliable accounting information on which to base managerial decision and the inability to project or even give an estimate of what their production, scales and profit level will be like in the successive future period.
Another problem is that of seeking the support and involvement of all levels of management and the difficulty in educating all individuals who are to be involved in the accounting process and gaining their full participation.
However, the inability to apply the financial management system in a flexible manner and the inconsistency in maintaining effective follow up procedures and adapting the accounting procedure in a hotel is also not an exception.
1.3 RESEARCH QUESTION
To find out whether the accounting procedure of hotels is effective, the following questions are raised:
1. Can the accountant decide the best accounting procedure that should be adopted in a hotel?
2. Are there adequacies in the practice of accounting procedure adopted in a hotel system?
3. Are the accounting practices enough to report profit and provide management with timely and reliable information for decision making?
4. What is the caliber of accounting personnel employed in the hotel?
5. How adequate is the internal control system in the hotel?
1.4 RESEARCH HYPOTHESIS Hypothesis is a tentative statement about relationship that exists between two or more variables.
In this study, the null hypothesis (Ho) will be tested against alternative hypothesis (Hi). Two hypotheses will be formulated by the research in testing the null and alternative hypothesis. These are as follows:
Ho: an accountant can not decide the best accounting procedure that should be adopted in a hotel
Hi: an accountant can decide the best accounting procedure that should be adopted in a hotel
Ho: there are no adequacies in the practice of accounting procedure adopted in a hotel system.
Hi: there are adequacies in the practice of accounting procedure adopted in a hotel system.
1.5 PURPOSE OF THE STUDY
The purpose of this research study is to determine the accounting procedure in a hotel system and to ascertain the level of importance and the overall benefit the hotel management derive from such accounting procedure existing within the hotel.
1. To understand the objectives for coordinating a hotel on keeping books of account of their transactions.
2. To access adequacy of financial records and other books of account by an accountant in a hotel.
3. To know the roles of accountant in reporting profit and loses and providing management with timely and reliable information for decision making.
1.6 SIGNIFICANCE OF THE STUDY
This study is aimed at showing the accounting procedure that is applicable within the hotel system and examine the role of accounting procedure in a hotel as a tool of management, an instrument of control, a technique of decision making, a system of performance measurement and reporting which is vital in business growth and expansion.
This study could be of immense use to anybody who wants to gain some insight into the role of an accountant and the current method of accounting procedure in a hotel.
1.7 SCOPE OF THE STUDY
This study covers such areas as: hotel system, accounting, accounting procedure and accounting procedure in a hotel system. The area covered in this research work includes Royal Marble Hotel, Benin City.
The data to be collected would also be restricted to Royal Marble Hotel.
1.8 LIMITATION OF THE STUDY
This research work is limit due to some factors:
Management restriction: managements often are not willing to give out some useful information that would have helped the researcher in getting the needed information about the company. This was a source of limitation to this project work.
Time factor:- The time giving is too tiny for me to carry out the project work accurately.
Finance:- This also restraints me in carrying out my research work as being expected.
1.9 DEFINITION OF TERMS
Efficiency: This is a fact of performance which relate to the rate of resource utilization (ie cost incurred in the course of the work. Ovuorie G (1997).
Accounting: This is the fundamental processes of developing theories for the discipline of accounting. And the primary aim of accounting theory has been to provide a basis for the predication and interpretation of accounting behaviours and events. James Ilaboya Advanced Financial Accounting (2005).
Hotel: A hotel is an establishment that provides paid lodging on a short-term basis.
Policies: Koontz, O Donnell and Weihrich (1980) define policies as a general statement or understanding which guide thinking in decision making; the essence of policies is the existence of discretion, within certain limits in guiding decision making.
Management: Act of running and controlling a business