4th Edition

Accounting Essentials for Hospitality Managers

By Chris Guilding, Kate Mingjie Ji Copyright 2022
    402 Pages 22 B/W Illustrations
    by Routledge

    402 Pages 22 B/W Illustrations
    by Routledge

    For non-accountant hospitality managers, accounting and financial management is often perceived as an inaccessible part of the business. Yet having a grasp of accounting basics is a key part of management. Using an easy-to-read style, this book provides a comprehensive overview of the most relevant accounting techniques and information for hospitality managers. It demonstrates how to organise and analyse accounting data to help make informed decisions with confidence.

    With its highly practical approach, this new fourth edition:

    • Quickly develops the reader’s ability to adeptly use and interpret accounting information to enhance organisational decision-making and control.
    • Demonstrates how an appropriate analysis of financial reports can drive your business strategy forward from a well-informed base.
    • Presents new accounting problems in the context of a range of countries and currencies throughout.
    • Develops mastery of the key accounting concepts through financial decision-making cases that take a hospitality manager’s perspective on a range of issues.
    • Includes accounting problems at the end of each chapter to be used to test knowledge and apply understanding to real-life situations.
    • Offers extensive web support for instructors and students that includes PowerPoint slides, solutions to end-of-chapter problems, a test bank and additional exercises.

    The book is written in an accessible and engaging style and structured logically with useful features throughout to aid students’ learning and understanding. It is a key resource for all future hospitality managers.

    1. Introduction: Hospitality Decision Makers’ Use of Accounting

    Key characteristics of the hospitality industry

    Accounting and business management

    Accounting and Hospitality Decision Makers

    Uniform System of Accounts

    Organizational forms

    2. Analysing Transactions and Preparing Year-end Financial Statements

    The Balance Sheet and Income Statement

    Classifying transactions according to assets, liabilities and owners’ equity

    The importance of understanding financial accounting basics

    3. Double Entry Accounting

    Double entry accounting: some background concepts

    Double entry accounting: a worked example

    Journal entries

    4. Adjusting and Closing Entries

    Why do we need closing entries?

    Why do we need adjusting entries?

    Worked examples highlighting types of adjusting entry

    5. Financial Statement Analysis

    Profit performance

    Financial stability

    Ratios using operational measures

    6. Internal Control

    Internal Control Principles

    Internal control procedures and specific hotel activities

    Bank reconciliation: an important internal control procedure

    Accounting for petty cash

    7. Cost Management Issues

    Management’s need for cost information

    Major cost classification schemes

    Qualitative and behavioural factors in management decisions

    8. Cost-Volume-Profit Analysis

    Contribution margin

    Breakeven analysis

    The assumptions of cost-volume-profit analysis

    9. Budgeting and Responsibility Accounting

    Responsibility accounting

    Issues of cost, revenue, profit and investment centre design

    Roles of the budget

    Behavioural aspects of budgeting

    Technical aspects of budget preparation

    10. Flexible Budgeting and Variance Analysis

    Flexible budgeting

    Variance analysis


    11. Performance Measurement

    Shortcomings of conventional financial performance measures

    Key Issues in Performance Measurement System Design

    The Balanced Scorecard

    12. Cost Information and Pricing

    Factors affecting pricing

    Traditionally applied pricing methods

    13. Working Capital Management

    Cash management

    Accounts receivable management

    Inventory management

    Accounts payable management

    Working Capital Management

    14. Investment Decision Making

    Accounting rate of return


    Net Present Value (NPV)

    Internal Rate of Return

    Integrating the four investment appraisal techniques

    15. Other Managerial Finance Issues

    What should be the over-riding business objective in financial management?

    Agency Issues

    Trading shares in publicly listed companies

    Share Valuation


    Operating and Financial Leverage

    16. Revenue Management

    Business characteristics conducive to revenue management application

    Demand forecasting

    Gauging a hotel’s need for revenue management

    Revenue Management System requirements

    Using rate categories and demand forecasts

    Length of stay controls

    Managing group bookings

    Revenue management implementation issues

    Words of caution in applying the revenue management philosophy

    Solutions to the First Three Problems of Each Chapter


    Chris Guilding has more than 30 years’ experience in academia. For 12 years, he was Professor of Hotel Management in the Department of Tourism, Sport and Hotel Management at Griffith University, Australia. His teaching specialism is in management accounting, and he has taught MBA, Masters in Hospitality Management, Professional Golfers Association and Australian Institute of Company Directors courses as well as undergraduate programmes. In addition to Australia, he has taught in Canada, Holland, Hong Kong, New Zealand, Singapore and the United Kingdom.

    Kate Mingjie Ji is currently a senior lecturer in finance and revenue management at Oxford Brookes Business School, UK. She started her career as an auditor with PricewaterhouseCoopers. She has taught undergraduate and postgraduate finance and accounting courses at Macau University of Science and Technology and also the School of Hotel and Tourism Management at Hong Kong Polytechnic University. She is highly regarded by her students for her passionate approach to teaching.