The Christmas period can prove extremely lucrative for hospitality and leisure businesses. However, converting increased consumer spend and footfall into profit takes huge amounts of planning and preparation. Businesses must act now to put systems and processes in place to make the festive season a success, and for many, this will involve the implementation of new, insights-driven technology.
A common problem often encountered by growing businesses is the need to forge tangible connections between what is happening in the business as a whole, and what impact this is having on the firm’s financials. The implementation of technology can prove incredibly useful here and increasingly, tools such as management accounting systems (MAS) are being adopted by hospitality and leisure businesses.
The capacity for forward planning is greatly increased through the use of MAS and especially in the run up to Christmas, the ability to carry out comprehensive budgeting and forecasting exercises is invaluable. Gaining accurate projections of covers and bookings allows sufficient stock to be bought in and staff to be trained and sourced. In addition, in-depth analyses such as sales split between food and beverages, and staffing levels versus customer spend allows businesses to create successful menus and maximise service levels.
Once the planning stage is complete, a MAS can integrate with front of house systems already in place and allow enhanced real-time reporting. During busy periods, such as Christmas, this can be beneficial for staff of all levels within a business. The minute the tills close for the day, staff can access sales figures, bookings and food and beverage stock levels. Reports can also be generated at any point during the shift, giving businesses the flexibility to react to unexpected changes as and when they occur, for example, re-ordering popular ingredients or laying on more staff to meet increased demand.
Financial planning in the run up to Christmas is essential for any hospitality and leisure business; however the slower months of January, February and March should not be ignored. Ensuring that there are sufficient funds in the bank to meet overheads during this period is especially important. A change of perspective is also often helpful here; instead of worrying about the effects of a post-Christmas slump, these slower months can be seen as a good opportunity to reinvest in the business, undertake staff training or carry out essential improvement works for example. Of course, this is only possible if a successful Christmas has put money in the bank.
Knowing what factors drive a business is important for any organisation, and being able to grasp this data, whilst minimising human input is a great benefit of MAS. Where previously a lot of time might have been spent entering in purchase invoices or inputting bank statements, these processes can now be fully automated, allowing staff to dedicate more time to the running of the business during busy periods.
Businesses looking to successfully capitalise on the festive season must act now to strengthen internal processes and improve their access to real-time data. Intelligent planning and decision making is instrumental in maintaining stock levels, and positioning the business to bolster revenue. This cannot be implemented over night, however businesses that invest sufficient time in preparation and strategic planning can reap the rewards of a hugely prosperous Christmas.
Dave Gosling is partner and head of the hospitality and leisure group at Menzies LLP.
Menzies is a top 20 firm of accountants, finance and business advisors that operates out of a network of offices across Surrey, Hampshire and London. Menzies has over 400 employees and an annual turnover of £40m.