FRONT OFFICE BUDGETTING
Sonu Gupta, MBA ????
Padma Shri Nominee | National Awardee |Young Hospitality Icon-India || Power 25 Sales & Marketing Manager - MEA | Young Entrepreneur of the Year
FRONT OFFICE BUDGETTING
What is a Budget? (Operative and capital)
A budget is a statement of intended expenditure for a given period.
Importance of Budgeting
- It sets out the parameters of how much expenditure is permitted for various items of cost.
- The efficiency of the department is reflected in the extent to which it stays within the budget.
- It helps in focusing on priorities of expenditure.
- Acts as an inbuilt control on activities.
Types Of Budget
Capital Budget
This budget makes provision for all items of capital expenditure. It takes into account all items, which are guaranteed to have a life span of a number of years. It is very important to keep records of purchases and repairs as a form of control. A decision may have to be taken at some stage as to whether it is more beneficial to have a piece of equipment repaired or to simply buy a new one.
The types of items, which are provided for in the capital budget, are as follows:
- Large equipment and machinery.
- Fixtures and fittings.
- Furniture and fitting in bedroom or public areas, e.g., beds, bedding, carpets, soft furnishing, pictures and lamps.
- Linen and towels.
- Uniforms.
- Special projects (new conference rooms).
- Miscellaneous. It is quite normal to have a certain amount of money allocated for such a heading in order to make provision for emergencies, problems that could not have been foreseen, alterations required by law etc.
Operative Budget?
An operating budget makes provision for all those items, which are needed for day-to-day operation of the department.
- Cleaning agents.
- Small items of cleaning equipment such as rubber gloves, doorsteps, buckets, duster clothes.
- Staff and guest supplies, e.g. soap, tissues, toilet paper.
- Contract services.
It is very easy to make false economies in this particular area. A cheaper brand of cleaning agents will not necessarily have the quality of the more expensive pack, so it may be necessary to use much more of the cheaper brand, thus, increasing expenditure in the long run.