BUDGETARY CONTROL

 

BUDGETARY CONTROL

 

For controlling budget, two variances of budget, revenue and expenses are assessed. In favorable condition actual revenue should exceed budgeted revenue and actual expenses should be lower than the budgeted revenue.

 

Since housekeeping is not a revenue generating department, responsibility of this department in achieving the financial goal is to control the departmental expenses.

Controlling operating expenses in housekeeping-

 

·         Effective documentation -Usage, rates and costs of all inventory items should be documented.

·         Proper scheduling of staff -Hiring of staff according to the actual occupancy for a specified period.

·         Right purchasing-To control expenses housekeeping department co ordinates with the purchase department and decides the right quality, right quantity, right price, right source of supply, and right time for purchasing.

·         Efficient training and supervision -Training for new employee and training on new methods for older employee is very helpful for controlling expenses. Efficient training can increase the productivity and performance standards which results decrease in housekeeping expenses.

 

 

 

PLANNING OPERATIONAL BUDGET: 

 

The first step in planning the operating budget is always to forecast room sales, which generates the revenue for operating the various departments. Most of the expenses that each department can expect are most directly related to room occupancy levels. This is especially true of the housekeeping department where salaries and wages, and the usage rates for both recycled and non-recycled inventories are a direct function of the number of occupied rooms. The concept of “cost per occupied room” is the major tool the executive housekeeper uses to determine the levels of expense in the different categories. Once the executive housekeeper knows predicted occupancy levels, expected expenses for salaries and wages, cleaning supplies, guest supplies, laundry and other areas can be determined on the basis of formulas that express costs in terms of ‘cost per occupied room.’ By specifying expense levels in relation to room sales, the budget actually expresses the level of service the hotel will be able to provide. In this regard, it is important for department heads to report how service levels will be affected by budget adjustments. This is especially important for the executive housekeeper. If the top management tones down the operating budget submitted by the executive housekeeper, the executive housekeeper should clearly indicate what services will be eliminated and downgraded in order to achieve the specified reductions.

 

The various heads of expenditure that are normally reflected in a housekeeping operating budget 

 

1.       Cleaning and guest supplies

2.       Office stationery and postage

3.       Tailor shop expenses

4.       Small cleaning equipment like brooms and brushes

5.       Salaries and wages-includes retirement, benefits, bonus, allowances, incentives, etc.

6.       Heat, light, and power-air conditioning, heating, electricity consumption

7.       Repairs and maintenance

8.       Pest control

9.       Laundry expense

10.   Horticultural expense: includes florist expense (flowers, oasis and vases) and landscaping expense (seeds, manure, saplings and flower pots)

11.   Contract cleaning