The UK hospitality and leisure sector is facing a range of challenges in 2023. Staff retention and recruitment, pressurised household incomes, increasing demand for sustainable practices, and the lingering effects of the global pandemic are squeezing budgets more tightly than ever, making accurate budgeting and reporting essential for businesses to remain competitive.
Optimising your budgeting and reporting is crucial for hospitality and leisure businesses to stay afloat in an industry that is rarely short on competition. In this article, we will explore how hotel budgeting software can help your business understand and forecast its financial position so you can plan more effectively for growth.
1. Establish Clear Goals And Objectives
When setting a budget for your hospitality or leisure business, it is essential to establish clear goals and objectives. This means understanding what your ambitions are for your business, and what resources and investment will be needed to fulfil them. Will your financial plans be able to cope and respond if downside risks unexpectedly arise? By planning your budget to accommodate these points, you will be able to allocate resources cost-effectively and implement potential contingencies should problems occur.
2. Plan Expenditure, Allocate Resources
How you spend money on resources, people, and premises should all be stipulated in your budget. Your business’s profitability will depend on your volume of sales as well as incoming and outgoing service costs. Understanding your income streams and expenditures will enable you to create a realistic budget so that you can allocate funds and decide how best to spend your money.
3. Model As Accurately As Possible
While it is not possible to guarantee your plans will be achieved, you can maximise the chance of success – and minimise the damage should unexpected risks occur – by taking active steps to model as accurately as possible. You should:
Business budget management software lets you devise more accurate plans with a greater chance of success, taking into account forecasted income, cashflow fluctuations, and planned capital expenses, now and in the future.
4. Plan For Contingencies
Sometimes, despite the best-laid plans, things do not work out as you expect. Contingency plans are vital to safeguard your business and ensure that it responds in a timely manner to unexpected developments. Budgeting and forecasting software can help you devise practical contingency plans for different scenarios so that, if an event happens with next to no warning, you can take active steps to minimise the impact, and even turn a challenge into an opportunity.
5. Monitor Regularly
Monitoring your performance is important because your income and expenditure may differ from what you anticipated when you created your budget. Identifying issues promptly will benefit your business in the long term, as any issues can be tackled head-on. A budgeting system will allow you to monitor occupancy, service uptake, repeat business, cash flow and other metrics - and produce detailed reports for stakeholders. Rolling forecasts – as frequently as every month, for example – lets you keep a constant eye on your business’s performance, rather than waiting until the end of the financial year.
6. Implement A Software Solution
The best way to optimise your budget is to implement budgeting, forecasting, and reporting software, such as Corporate Planner, which gives you the tools and insights to understand the factors that affect your income and expenditure, plan for different scenarios, and provide detailed reports on your hospitality or leisure company’s performance.
To find out more about our award-winning budgeting software, please download our free Corporate Planner Finance Guide or call Account-Ability on 01242 903169.
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