TABLE OF CONTENTS The three financial reports that we have discussed in previous chapters the Profit and Loss (P&L) Statement, the Balance Sheet, and the Statement of Cash Flow are used by both management and outside parties in evaluating hotel operations. We will now talk about two types of internal financial and management reports that hotel managers use:
One report summarizes and presents the operating results for the previous day or week.
The second report forecasts or schedules operations and functions for the next day or next week.
Managers use these reports to understand and evaluate past operations and to plan their daily and weekly future operations. They will make any necessary changes to daily operations to achieve budgets and forecasts or to respond to market or outside conditions.
Internal management reports are prepared by the accounting office and distributed to hotel managers for their use. Refer again to the Financial Management Cycle:
Operations produces the numbers.
Accounting prepares the numbers.
Operations and accounting analyze the numbers.
Operations applies the numbers to change or improve operations.
The reports that we will discuss in this chapter are examples of the Financial Management Cycle. Operations produces the numbers, whether they are good or bad. It is accounting's job to collect and prepare the management reports from these operational numbers so that managers can use them to identify and analyze operations. Then management can apply the information from the numbers to the next day's or week's operations. The goals are to understand what happened, why it happened,...
