Please summarize the follow article, minimum 3 pages

8.4 AS I SEE IT: THE HOTEL CONTROLLER Mike Draeger The controller is the manager with overall re- sponsibility of the accounting department This executive is credited with having his or her hand on the purse strings, eye on the bot- tom line, and ear of the general manager, all while counting the beans and balancing the books. In fulfilling this role, the controller must know the hotel operations and be famil- iar with what goes on in each department. As is the same with all other managerial roles. the controller must have many skills that are used daily. Do the actual payroll tax deposits equal what is reported on the IRS form? Accounting af- fects almost every aspect of the hotel opera- tion, and the controller is the one looked to when it comes to the proper functioning and conduct of this department. T he controller is an advisor, meaning he or she provides information and recommen- dations to every department in the hotel. Regarding giving information, accounting generates more reports than any other depart- ment. Daily reports to management showing business, with comparisons to budget and/or last year. The financial statements, in- cluding the balance sheet and income state- ment, are periodically produced in accounting. tor. He or she supervises the accounting func- tions, including payroll, payables, receivables, purchasing, and auditing. The controller wants to know that procedures are being followed and deadlines are being met. He or she ques- tions what is happening in each hotel depart ment. Is all the money getting to the bank, and is there enough to pay all the vendors and staff? That large group function in the ball- room is being extended 30-day credit: have their references been checked? Are purchase orders on file in the receiving department? discuss these types of reports with managers and owners, and to make sense of all the num- bers and percentages. A hotel holds any num- ber of meetings where the controller discusses the financial or operational results. At these meetings, the controller is a part of the process of generating recommendations and sugges- tions to improve operations in areas the re- ports might point out. Often, a morning oper- ations meeting finds the controller addressing labor costs that are creeping higher than ap- propriate given current levels of business, or the monthly manager's meeting starts with the controller giving an overview of last month's financial results and the hotel's year-to-date standing. When the owners visit the hotel, they usually attend a meeting to discuss financial results and what is being done to ensure prof- itability expectations are being met. The con- troller might even be asked to sit in on a specific department's staff meeting as its members brainstorm ways to reduce depart- accounting provides, the controller offers ad- vice and counsel on its significance. The controller is also a technician. He or she must have a foundation in the debits and credits of accounting. Regardless of whether the accounting department is staffed with one person or two dozen, the controller is prepared to jump in and do the work. A tight labor mar- ket and staff turnover sometimes necessitate that the controller assist in every function. There are always balance sheet accounts to reconcile, budget variances to explain, and journal entries to post. It takes a lot to keep an accounting department functioning. Very early in my accounting career, I be- gan working in a small accounting department of a regional restaurant chain. Due to state laws, the restaurants could buy alcoholic bev- erages with cash or check only, and never on credit. To facilitate purchasing, the restaurant general manager was provided an imprest checking account for purchasing alcohol. (An imprest account is one that has a specific amount of money in it, and money replaced with precise amounts checks are written for.) This account had $1,000 in it, and each week the manager called the home office and have deposited into the account the amount equal to the checks written in the previous week. Then the invoices for what had been pur- chased were forwarded to the home office, which supported the amount of the transfer. In theory, the account balance never exceeded $1,000. The bank statements were sent to the general manager of the restaurant to balance and send completed to the home office. Because I was the new guy, I was given the task of balancing the checking account of one restaurant, which had not been balanced in over two years. It was well known that this restaurant's manager, an exceptional people person, wasn't good with numbers and never found time to balance that puny checking ac- count. So I went to work ticking off the checks and deposits and trying to make the account balance to the $1,000 imprest amount. There were several irregularities, and, of course, many documents (cashed checks) were missing. I worked with the bank to recreate copies and research the irregular- ities, of which there were many. When all was finished, I had discovered the manager had embezzled over $18,000! This manager had actually been a very astute numbers person and had found ways to divert extra funds into the account and then wrote checks to himself and others for personal use. I t was a technician who caught him. But had a technician balanced that checkbook monthly and always verified the purchases through the invoices, it never would have hap- pened in the first place. Procedures were wrong and not enforced, and the climate was ripe for trouble. A good bookkeeper or ac- countant is primarily a good technician in ac- counting aspects, and a good controller does not lose sight of this ability as his or her ca- reer develops. shreds, and the GM and I were verbally bloodied, bruised, and beaten at the end of it all. Oh yes, our bottom line increased $350,000, and we did not make budget or our bonuses that year. A good manager should al- ways know what the people above him are looking for and then strive or rather plan to Most successful businesses create a finan- cial plan or budget to operate by. The more d this plan is the better one can gauge actual performance. Most budgets are prepared annually, with monthly detail breakdowns. The controller is a planner and is usually the one who prepares the budgetor better yet, coordinates the hotel's efforts in preparing departmental budgets to consoli- date into one master document. I worked for a company that provided major cash incen- tives for meeting and exceeding the annual budgeted bottom-line numbers. Budgeting was taken very seriously, and each member of management had a vested interest in all de- partments' performance. Budgeting is not hard to do, but it can be time-consuming. Over the years, I became a detail-oriented and effective budgeter, although my first budget review taught me the most. My hotel and I had spent weeks and months preparing the next year's budget. All the numbers had been gone over, comparisons completed, and volumes of expense and revenue backup cat alogued and bound in three-ring binders. The general manager and I flew 3,000 miles, with our binders, to present the budget to our area and regional vice presidents and receive the company's stamp of approval. We were sched- uled for a five-hour review session, if that much time was needed. As the GM and I came into the review room, the vice presi- dents were already seated and waiting. They stated that this could be a short and produc- tive meeting. If we would only commit to in- creasing our bottom line by $200,000, we could all be out of there in five minutes. No way! The GM and I had solid defendable numbers, and we weren't going to let months of everyone's hard honest work get blown away. Needless to say, the review lasted the entire five hours, our budget was ripped to Additionally, the controller is an educa- tor. All managers have a responsibility to in- struct and train others, and the controller is no exception. Obviously, the accounting staff must be proficient in their duties to perform their jobs, and the controller must ensure this is happening. However, to the majority of the hotel, what accounting does and how they do it can be quite a mystery. Controllers should demystify the role of accounting. Managers with an understanding of accounting find they have more tools to work with in the operation of their departments after they have been in- volved in just one year's budget process. The controller can be building public relations for accounting by using opportunities to develop others' financial awareness and expertise. Finally, controllers should be mentors. They should be involved in the development of people. The accounting staff should experi- ence new challenges to keep them interested. Cross-training in other accounting or hotel po- sitions can give staff perspective on areas not previously understood. This aids staff in devel- oping their careers and additionally helps within the department when staff is short. There was a time when this backfired on me, though. My accounting department had a staff of 14, and each was cross-trained to per- form at least part of a job besides their own. My general cashier was responsible for count- ing the previous day's receipts and preparing the bank deposit. Additionally, she replen- ished the cash banks used in the restaurants Often the controller can facilitate a manager's accomplishments by being a friend and being aware of the manager's professional develop- mental needs. Mentoring and educating can benefit the controller in many waysmaybe, most inter- estingly, his or her personal advancement and compensation. Several hotel companies evaluate and offer incentives to the back- of-the-house departments for criteria previ- ously reserved for more se revenue-producing departments. As a con- troller of an accounting department, I am measured by the service my department pro- vides to the hotel operation-our internal customers. Accounting becomes a support de- partment and the rest of the operation its customers. In this way, accounting offers products and services, and it works to satisfy customers. The manager and even st tablish quantifiable objectives focused on the and stores and at the front desk. She was re- sponsible for maintaining a safe in her office that contained close to $400,000. Sadly, her fa- ther passed away and she needed to leave town for a week or so. No problem! We had someone in accounts receivable that had cross-trained in the cashiering position and was able to step in immediately. The cashier- ing temp completed her first week without a hitch. We left work for the weekend feeling all was well. On Monday, my cashiering temp didn't show up for work. She also didn't call. In fact, I have never seen her since. Over the weekend, she had taken advantage of proce- dural flaws and helped herself to $30,000 of the hotel's money and fled. When I was able to step back and take a broad look at what had happened, I realized the problem. The accounting procedures were such that one person could steal from the safe and not be questioned. Not only was this an opportunity for a dishonest employee, but it placed an honest employee in danger! One employee had both the combination and the key to the safe tumbler. One employee could go into the accounting offices alone on a day when the entire hotel knew the ac- counting department was closed. One em- ployee could go into the cashier's office alone with a backpack and exit the office, depart- ment, and the building without anyone ask- ing to see inside the backpack. A single employee could be in physical danger if oth- ers knew all of this and were hard up for cash. Needless to say, procedures were changed immediately and policy manuals were rewritten with haste. The controller should be on the lookout for promising managers who show potential. Managers enjoy taking a few minutes over coffee or lunch or even just sitting in the of- fice to talk about their objectives and goals. teria for performance evaluations, bonuses, and other incentives and rewards. Current objectives in accounting might now include: Working professionally with all other departments. Meeting deadlines and issuing timely reports. . Achieving superior results on internal and external audits. Training operational managers in the fi- nancial aspects of their departments. Stocking storerooms at appropriate par levels. Keeping the accounting offices neat, or- derly, and presentable. . Being willing to answer questions and as- sist with problems. and stores and at the front desk. She was re- sponsible for maintaining a safe in her office that contained close to $400,000. Sadly, her fa- ther passed away and she needed to leave town for a week or so. No problem! We had someone in accounts receivable that had cross-trained in the cashiering position and was able to step in immediately. The cashier- ing temp completed her first week without a hitch. We left work for the weekend feeling all was well. On Monday, my cashiering temp Often the controller can facilitate a manager's accomplishments by being a friend and being aware of the manager's professional develop- mental needs. Mentoring and educating can benefit the controller in many waysmaybe, most inter- estingly, his or her personal advancement and compensation. Several hotel companies evaluate and offer incentives to the back- of-the-house departments for criteria previ- ously reserved for more se revenue-producing departments. As a con- troller of an accounting department, I am measured by the service my department pro- vides to the hotel operation-our internal customers. Accounting becomes a support de- partment and the rest of the operation its customers. In this way, accounting offers products and services, and it works to satisfy In fact, I have never seen her since. Over the weekend, she had taken advantage of proce- dural flaws and helped herself to $30,000 of the hotel's money and fled. When I was able to step back and take a broad look at what had happened, I realized the problem. The accounting procedures the safe and not be questioned. Not only was this an opportunity for a dishonest employee, but it placed an honest employee in danger! One employee had both the combination and the key to the safe tumbler. One employee could go into the accounting offices alone on a day when the entire hotel knew the ac- counting department was closed. One em- ployee could go into the cashier's office alone with a backpack and exit the office, depart- ment, and the building without anyone ask- ing to see inside the backpack. A single employee could be in physical danger if oth- ers knew all of this and were hard up for cash. Needless to say, procedures were changed immediately and policy manuals were rewritten with haste. The controller should be on the lookout for promising managers who show potential. Managers enjoy taking a few minutes over coffee or lunch or even just sitting in the of- fice to talk about their objectives and goals. tablish quantifiable objectives focused on the department's product. These become the cri- teria for performance evaluations, bonuses, and other incentives and rewards. Current objectives in accounting might now include: Working professionally with all other departments. Meeting deadlines and issuing timely reports. . Achieving superior results on internal and external audits. Training operational managers in the fi- nancial aspects of their departments. Stocking storerooms at appropriate par levels. Keeping the accounting offices neat, or- derly, and presentable. . Being willing to answer questions and as- sist with problems. With this type of product and service atti- tude, there is no limit to what a department might do for its customers. It is not easy to describe the controller's job as a daily routine. However, the position does call for skills and traits that are continu- ally in use. Just as with all other aspects of the hotel, the scenery is always changing, guests are constantly arriving and departing, restau- rants open and close, telephones ring 24 hours a day. Each day brings new challenges and op- portunities, and the controller, as part of this, must embrace the many facets of the hospi- tality industry. 8.4 AS I SEE IT: THE HOTEL CONTROLLER Mike Draeger The controller is the manager with overall re- sponsibility of the accounting department This executive is credited with having his or her hand on the purse strings, eye on the bot- tom line, and ear of the general manager, all while counting the beans and balancing the books. In fulfilling this role, the controller must know the hotel operations and be famil- iar with what goes on in each department. As is the same with all other managerial roles. the controller must have many skills that are used daily. Do the actual payroll tax deposits equal what is reported on the IRS form? Accounting af- fects almost every aspect of the hotel opera- tion, and the controller is the one looked to when it comes to the proper functioning and conduct of this department. T he controller is an advisor, meaning he or she provides information and recommen- dations to every department in the hotel. Regarding giving information, accounting generates more reports than any other depart- ment. Daily reports to management showing business, with comparisons to budget and/or last year. The financial statements, in- cluding the balance sheet and income state- ment, are periodically produced in accounting. tor. He or she supervises the accounting func- tions, including payroll, payables, receivables, purchasing, and auditing. The controller wants to know that procedures are being followed and deadlines are being met. He or she ques- tions what is happening in each hotel depart ment. Is all the money getting to the bank, and is there enough to pay all the vendors and staff? That large group function in the ball- room is being extended 30-day credit: have their references been checked? Are purchase orders on file in the receiving department? discuss these types of reports with managers and owners, and to make sense of all the num- bers and percentages. A hotel holds any num- ber of meetings where the controller discusses the financial or operational results. At these meetings, the controller is a part of the process of generating recommendations and sugges- tions to improve operations in areas the re- ports might point out. Often, a morning oper- ations meeting finds the controller addressing labor costs that are creeping higher than ap- propriate given current levels of business, or the monthly manager's meeting starts with the controller giving an overview of last month's financial results and the hotel's year-to-date standing. When the owners visit the hotel, they usually attend a meeting to discuss financial results and what is being done to ensure prof- itability expectations are being met. The con- troller might even be asked to sit in on a specific department's staff meeting as its members brainstorm ways to reduce depart- accounting provides, the controller offers ad- vice and counsel on its significance. The controller is also a technician. He or she must have a foundation in the debits and credits of accounting. Regardless of whether the accounting department is staffed with one person or two dozen, the controller is prepared to jump in and do the work. A tight labor mar- ket and staff turnover sometimes necessitate that the controller assist in every function. There are always balance sheet accounts to reconcile, budget variances to explain, and journal entries to post. It takes a lot to keep an accounting department functioning. Very early in my accounting career, I be- gan working in a small accounting department of a regional restaurant chain. Due to state laws, the restaurants could buy alcoholic bev- erages with cash or check only, and never on credit. To facilitate purchasing, the restaurant general manager was provided an imprest checking account for purchasing alcohol. (An imprest account is one that has a specific amount of money in it, and money replaced with precise amounts checks are written for.) This account had $1,000 in it, and each week the manager called the home office and have deposited into the account the amount equal to the checks written in the previous week. Then the invoices for what had been pur- chased were forwarded to the home office, which supported the amount of the transfer. In theory, the account balance never exceeded $1,000. The bank statements were sent to the general manager of the restaurant to balance and send completed to the home office. Because I was the new guy, I was given the task of balancing the checking account of one restaurant, which had not been balanced in over two years. It was well known that this restaurant's manager, an exceptional people person, wasn't good with numbers and never found time to balance that puny checking ac- count. So I went to work ticking off the checks and deposits and trying to make the account balance to the $1,000 imprest amount. There were several irregularities, and, of course, many documents (cashed checks) were missing. I worked with the bank to recreate copies and research the irregular- ities, of which there were many. When all was finished, I had discovered the manager had embezzled over $18,000! This manager had actually been a very astute numbers person and had found ways to divert extra funds into the account and then wrote checks to himself and others for personal use. I t was a technician who caught him. But had a technician balanced that checkbook monthly and always verified the purchases through the invoices, it never would have hap- pened in the first place. Procedures were wrong and not enforced, and the climate was ripe for trouble. A good bookkeeper or ac- countant is primarily a good technician in ac- counting aspects, and a good controller does not lose sight of this ability as his or her ca- reer develops. shreds, and the GM and I were verbally bloodied, bruised, and beaten at the end of it all. Oh yes, our bottom line increased $350,000, and we did not make budget or our bonuses that year. A good manager should al- ways know what the people above him are looking for and then strive or rather plan to Most successful businesses create a finan- cial plan or budget to operate by. The more d this plan is the better one can gauge actual performance. Most budgets are prepared annually, with monthly detail breakdowns. The controller is a planner and is usually the one who prepares the budgetor better yet, coordinates the hotel's efforts in preparing departmental budgets to consoli- date into one master document. I worked for a company that provided major cash incen- tives for meeting and exceeding the annual budgeted bottom-line numbers. Budgeting was taken very seriously, and each member of management had a vested interest in all de- partments' performance. Budgeting is not hard to do, but it can be time-consuming. Over the years, I became a detail-oriented and effective budgeter, although my first budget review taught me the most. My hotel and I had spent weeks and months preparing the next year's budget. All the numbers had been gone over, comparisons completed, and volumes of expense and revenue backup cat alogued and bound in three-ring binders. The general manager and I flew 3,000 miles, with our binders, to present the budget to our area and regional vice presidents and receive the company's stamp of approval. We were sched- uled for a five-hour review session, if that much time was needed. As the GM and I came into the review room, the vice presi- dents were already seated and waiting. They stated that this could be a short and produc- tive meeting. If we would only commit to in- creasing our bottom line by $200,000, we could all be out of there in five minutes. No way! The GM and I had solid defendable numbers, and we weren't going to let months of everyone's hard honest work get blown away. Needless to say, the review lasted the entire five hours, our budget was ripped to Additionally, the controller is an educa- tor. All managers have a responsibility to in- struct and train others, and the controller is no exception. Obviously, the accounting staff must be proficient in their duties to perform their jobs, and the controller must ensure this is happening. However, to the majority of the hotel, what accounting does and how they do it can be quite a mystery. Controllers should demystify the role of accounting. Managers with an understanding of accounting find they have more tools to work with in the operation of their departments after they have been in- volved in just one year's budget process. The controller can be building public relations for accounting by using opportunities to develop others' financial awareness and expertise. Finally, controllers should be mentors. They should be involved in the development of people. The accounting staff should experi- ence new challenges to keep them interested. Cross-training in other accounting or hotel po- sitions can give staff perspective on areas not previously understood. This aids staff in devel- oping their careers and additionally helps within the department when staff is short. There was a time when this backfired on me, though. My accounting department had a staff of 14, and each was cross-trained to per- form at least part of a job besides their own. My general cashier was responsible for count- ing the previous day's receipts and preparing the bank deposit. Additionally, she replen- ished the cash banks used in the restaurants Often the controller can facilitate a manager's accomplishments by being a friend and being aware of the manager's professional develop- mental needs. Mentoring and educating can benefit the controller in many waysmaybe, most inter- estingly, his or her personal advancement and compensation. Several hotel companies evaluate and offer incentives to the back- of-the-house departments for criteria previ- ously reserved for more se revenue-producing departments. As a con- troller of an accounting department, I am measured by the service my department pro- vides to the hotel operation-our internal customers. Accounting becomes a support de- partment and the rest of the operation its customers. In this way, accounting offers products and services, and it works to satisfy customers. The manager and even st tablish quantifiable objectives focused on the and stores and at the front desk. She was re- sponsible for maintaining a safe in her office that contained close to $400,000. Sadly, her fa- ther passed away and she needed to leave town for a week or so. No problem! We had someone in accounts receivable that had cross-trained in the cashiering position and was able to step in immediately. The cashier- ing temp completed her first week without a hitch. We left work for the weekend feeling all was well. On Monday, my cashiering temp didn't show up for work. She also didn't call. In fact, I have never seen her since. Over the weekend, she had taken advantage of proce- dural flaws and helped herself to $30,000 of the hotel's money and fled. When I was able to step back and take a broad look at what had happened, I realized the problem. The accounting procedures were such that one person could steal from the safe and not be questioned. Not only was this an opportunity for a dishonest employee, but it placed an honest employee in danger! One employee had both the combination and the key to the safe tumbler. One employee could go into the accounting offices alone on a day when the entire hotel knew the ac- counting department was closed. One em- ployee could go into the cashier's office alone with a backpack and exit the office, depart- ment, and the building without anyone ask- ing to see inside the backpack. A single employee could be in physical danger if oth- ers knew all of this and were hard up for cash. Needless to say, procedures were changed immediately and policy manuals were rewritten with haste. The controller should be on the lookout for promising managers who show potential. Managers enjoy taking a few minutes over coffee or lunch or even just sitting in the of- fice to talk about their objectives and goals. teria for performance evaluations, bonuses, and other incentives and rewards. Current objectives in accounting might now include: Working professionally with all other departments. Meeting deadlines and issuing timely reports. . Achieving superior results on internal and external audits. Training operational managers in the fi- nancial aspects of their departments. Stocking storerooms at appropriate par levels. Keeping the accounting offices neat, or- derly, and presentable. . Being willing to answer questions and as- sist with problems. and stores and at the front desk. She was re- sponsible for maintaining a safe in her office that contained close to $400,000. Sadly, her fa- ther passed away and she needed to leave town for a week or so. No problem! We had someone in accounts receivable that had cross-trained in the cashiering position and was able to step in immediately. The cashier- ing temp completed her first week without a hitch. We left work for the weekend feeling all was well. On Monday, my cashiering temp Often the controller can facilitate a manager's accomplishments by being a friend and being aware of the manager's professional develop- mental needs. Mentoring and educating can benefit the controller in many waysmaybe, most inter- estingly, his or her personal advancement and compensation. Several hotel companies evaluate and offer incentives to the back- of-the-house departments for criteria previ- ously reserved for more se revenue-producing departments. As a con- troller of an accounting department, I am measured by the service my department pro- vides to the hotel operation-our internal customers. Accounting becomes a support de- partment and the rest of the operation its customers. In this way, accounting offers products and services, and it works to satisfy In fact, I have never seen her since. Over the weekend, she had taken advantage of proce- dural flaws and helped herself to $30,000 of the hotel's money and fled. When I was able to step back and take a broad look at what had happened, I realized the problem. The accounting procedures the safe and not be questioned. Not only was this an opportunity for a dishonest employee, but it placed an honest employee in danger! One employee had both the combination and the key to the safe tumbler. One employee could go into the accounting offices alone on a day when the entire hotel knew the ac- counting department was closed. One em- ployee could go into the cashier's office alone with a backpack and exit the office, depart- ment, and the building without anyone ask- ing to see inside the backpack. A single employee could be in physical danger if oth- ers knew all of this and were hard up for cash. Needless to say, procedures were changed immediately and policy manuals were rewritten with haste. The controller should be on the lookout for promising managers who show potential. Managers enjoy taking a few minutes over coffee or lunch or even just sitting in the of- fice to talk about their objectives and goals. tablish quantifiable objectives focused on the department's product. These become the cri- teria for performance evaluations, bonuses, and other incentives and rewards. Current objectives in accounting might now include: Working professionally with all other departments. Meeting deadlines and issuing timely reports. . Achieving superior results on internal and external audits. Training operational managers in the fi- nancial aspects of their departments. Stocking storerooms at appropriate par levels. Keeping the accounting offices neat, or- derly, and presentable. . Being willing to answer questions and as- sist with problems. With this type of product and service atti- tude, there is no limit to what a department might do for its customers. It is not easy to describe the controller's job as a daily routine. However, the position does call for skills and traits that are continu- ally in use. Just as with all other aspects of the hotel, the scenery is always changing, guests are constantly arriving and departing, restau- rants open and close, telephones ring 24 hours a day. Each day brings new challenges and op- portunities, and the controller, as part of this, must embrace the many facets of the hospi- tality industry