Without taking a step back and looking at the bigger picture, hospitality venues are powerless to adapt strategic plans that will boost revenue or respond to customer requests flexibly. While this is true across the working world, it applies most readily to the hospitality industry. Customer satisfaction is key. This requires owners or managers to analyse what elements of daily operations work and identify opportunities for improvement.
Management reporting fulfills that function. In our guide, we break down what a management report is, establish why a quarterly review is the most effective periodic check and list what information hospitality owners or business managers need to include for best practice.
Management reporting helps owners or managers look at the bigger picture of operations.
What is a management report?
Many businesses produce periodic accounting reports to determine revenue within a specific timeframe, analyse operating expenses and calculate adjusted net income. A venue’s accounting function, whether in-house or outsourced, typically produce an annual document. Reports are shared externally as well as internally, to prove a venue’s compliance with Australian finance, fair trading and employment laws.
A management report is not strictly finance-focused. This document instead informs managers about the strengths and weaknesses of daily operations to help them make better-informed decisions. As such, reports are only used internally to keep the stakeholders across how a hospitality business is operating, and cover a range of elements:
- Whether product pricing is appropriate, after analysing adjusted net income.
- If the venue has enough employees to meet its strategic plans, and if so, what kinds of skills do new employees require and how much should they be paid.
- How effective ongoing marketing campaigns are, and whether the budget is appropriate in order to meet key venue objectives.
Essentially a management report collects key performance indicators (KPIs) and presents them in an understandable way, showing the worth of your business over a period of time. The measures which matter.
Why conduct a quarterly management review?
Financial reviews are usually best suited to an annual timeframe, in order to meet legislative compliance. Management reports, however, should be conducted more regularly. This is so stakeholders can respond quickly to operational risks, like low staff numbers, or take advantage of opportunities to expand to a new venue or increase revenue as they arise.
There is no right answer for all hospitality venues on how often they should produce a management report – it depends on the scale of operations and existing processes. But quarterly reviews offer a good balance of periodic insight without unnecessary additional time or cost. This timeframe also aligns with the seasons – an important factor for hospitality businesses serving food as the availability and cost of produce can impact on future strategic plans, this also depends on location of the venue – coastal, regional, city or country.
Three elements to include in a hospitality business quarterly management report
As previously mentioned, there is no standard template for creating a quarterly management report – the data included will depend on the venues past successes and future goals. However, most hospitality businesses will include details on:
1) Management processes and performance – business success often comes from the top down. Use your venues KPIs to analyse how management teams have applied your business processes in day-to-day operations. In the same way, you can assess whether a new strategy adopted by management has worked or not. If it has, building the new ideas into your standard operational procedures will help to deliver future success.
2) Business interactions with suppliers and partners – hospitality businesses rely on a number of suppliers and partners in daily operations. From food wholesalers to external business functions such as an accounting firm or marketing agency, organisations should assess the time and effort devoted to managing these relationships. This helps stakeholders to understand how higher-than-normal operating costs develop and research whether switching to new suppliers would benefit the enterprise in the short term and long term.
3) Different team functions within your wider strategy – customer service is undoubtedly key to your hospitality venue – but consider all of your back-of-house functions and the teams that manage them. These various departments, from marketing to a legal team, need to work together to ensure your business runs as smoothly as possible. Benchmarking past performances helps here to assess how various business functions are contributing to the whole.
Three benefits of producing quarterly management reports
There are many benefits of building quarterly management reporting into your processes:
1) Benchmarking performance – a quarterly review of business management functions allows you to track goals that may be as important as financial performance, but don’t have the hard data parameters for easy comparison. Factors such as employee satisfaction or the effectiveness of management processes don’t have a defined link to revenue – but these elements are clearly still key to success. Using a quarterly management report, executives have evidence of progress (or lack thereof) over time.
2) Assessing the market – the hospitality industry is relatively unique in that venues often offer identical products. For example, hotels and pubs serve the same drinks (usually from the same suppliers) and very similar food options. That means hospitality businesses often compete on the effectiveness of work functions. A management report gives stakeholders the metrics needed to see the business’ natural evolution. This data can be used to compare what your competitors are doing and realign your strategy accordingly.
3) Enhanced internal communication – reports produced exclusively for internal use help to improve communication from business owners to strategic partners, investors and management teams. It’s far simpler to execute the details of a hospitality business’ strategic plan with everyone on the same page. This alignment also helps to increase visibility across different functions within your hospitality business, ensuring all employees understand their role in supporting the venue’s core goals.
Quarterly management reports are the cornerstone of good decision making.
DFK Crosbie’s business services
A comprehensive quarterly management report is the cornerstone of better decision making. But it can be challenging assessing your hospitality business’ operations impartially. Independent insights from business experts offers the big-picture analysis needed.
DFK Crosbie’s business advisory service isn’t about signposting the weaknesses of your organisation. We work with your team to analyse your strengths too, offering peace of mind that you are focusing on what you’re best at while also addressing your areas of opportunity.
For more insight into how we can help you produce compelling quarterly management reports, contact our hospitality business services specialists today to get started!