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INTRODUCTION

Hospitality industry is mainly associated with the activities or function related to providing high quality and luxury services to customers. Main motive of organisations operating in hospitality industry is to provide customer satisfaction by applying improvement and innovation in services. As all industries are regulated by relevant authorities, this industry is also governed and administrated by government through regulations and it is necessary for organisation to follow these rules and regulations (Ervin, 2016). In order to understand various aspects of hospitality industry, in this report a newly formed restaurant Royale Restaurant is being opened in Bishops gate, London; is taken. Which is specialised in inventive, health salads and juices and smoothies. This report also describes  performance management plan, specific legislations, link between different functions and roles within hospitality sector and ways of communication, ordination and monitoring within departments of an organisation.

TASK 1

1. Principles of managing and monitoring financial performance:

Principles refers to guidelines to conduct any activity or imp0rove the activities or functions. Financial performance refers to efficiencies and abilities to accomplish any task or activity in order to achieve their objectives and goals. In this context following are the principles of managing and monitoring financial performance of Royale Restaurant, as follows:    

  • Composition of finance:It is very vital for Royale to structure their finance sources and to achieve appropriate composition of finance because sources of funding and finance are directly linked with an organisation's performance. Excessive financing through debts may reduce financial performance so in order to manage and monitor financial performance systematic composition of finance is act as principle (Gnanapala, 2017).  
  • Manage expenditure and optimise costs:Financial performance mainly concerned with profitability condition of an entity and to achieve profitability systematic management of expenditure and optimisation of various costs though techniques like budget and cost analysis is required. So for Royale being a newly formed company minimising their cost is required to survive in initial period.
  • Identification of risky factors: In order to achieve stable growth in identification of potential and existing risk factors that can affect organisation's financial performance adversely, is necessary. Royale should identify such factors to avoid any difficulty in future.

In order to manage and monitor financial performance these principles assist Royale and ensures future sustainable growth.

  1. During an accounting period incomes and expenditures of business organisation are as follows:

Incomings

Outgoings

Benefits

Drinks

Allowances

Lunch purchases

Wages

Household utility bills

Gifts

Weekly food shopping

 

Clothes

 

Gifts

  1. Explanation of some specific terms:

Types of cost: In day to day working, an organisation incurs different different costs and expenditure which are necessary to operate business functions and activities. These costs helps to determine profitability and performance of organisation (Charterina and Barrutia, 2014). These are the major costs in Royale Restaurant related to its different operations as follows:

  • Variable cost:A variable cost refers to those expenses that fluctuate in proportion to number of output or costumers as the case may be. This costs are increase or decrease as per change in level of output or scale of operations. It includes beverages, sales commissions,utility costs etc.
  • Fixed cost:These type of costs includes those expenses that does not fluctuate with the number of customers served or numbers of food items offered by Royale such as Adversing expenses, fixed administration cost, premises rent, depreciation etc.
  • Semi variable cost:These are those cost which are fixed for a set level of or consumption in Royale and become variable after an extent.

Sales: Sales refers to total amount of revenue and income earned by business organisation during a particular period. In Royale monies received by serving customers or delivering foods through online sites are considered as total revenue and income. Sales also includes item as other income which includes other ancillary incomes. &n