100 THE WORLD OF HOSPITALITY
FINANCE
Accountancy services for
informed decision making
The hospitality industry is very tuned-in to
the value of outsourcing non-core services.
Hotels are at the forefront of this where it is
common to outsource the catering. Typically,
the finance and ownership of the building is
also separate from the operating of the hotel.
There is now a growing trend to outsource the
accounting operations to a specialist provider.
We invited Ray Baxter, one of the Directors of
Baxterworld outsourcing to tell us why this is
becoming popular.
He gave us 6 reasons for this trend. Better
use of time was the first and most important
one. Looking after the books is a huge hassle
that gets in the way of the prime management
function of the business, namely keeping
customers happy and finding new customers.
Outsourcing eliminates that distraction.
Staff problems was the second reason.
Unless you are a trained bookkeeper and
have spare time, you will have to recruit,
train and supervise suitable back office staff.
Not owning the skills to produce accurate
and timely management accounts is a real
and present danger in today’s risky business
environment.
Scalable options come a strong third. If your
business is expanding and opening new venues
then an outsourced service will automatically
grow to service your greater needs. No need
to recruit and find extra desk space.
While most businesses outsource part of
their accounting work, such as, end of year
accounts, tax and payroll, there is a great
advantage to having it all under one roof. Most
large businesses have a multi skilled finance
department managed by an FD or CFO.
Smaller business can now avail of this benefit
using an outsourced service. The provider
will have a large bank of knowledge which
can be drawn on, something not available
in-house. With one seamless cloud-based
system, accounts become cheaper and more
transparent and transactions can be followed
from invoice through to final accounts.
For reason number five, the option of a virtual
Finance Director is usually mentioned as a
WEBSITE: www.baxterworld.com
great benefit. Where the provider specialises
in Hospitality, this becomes a valuable
resource which almost always, through
mentoring and advice, allows profits to be
improved. Often, on its own, this can pay for
the service. Ray quoted a London client who
had a small chain of pubs; by working with
his venue managers, discussing the ways
to improve the margin and recommending
ways to reduce wage cost, the company’s
profitability improved by £200k in the first
year.
Finally, reducing the possibility of fraud is an
attraction. Internal systems play a part but are
rarely strong enough to catch fraud quickly.
External monitoring makes this easier by
following tight processes around tills, cash and
supplier payments.
Outsourcing providers work under a defined
level of service where you consistently get
the work done within your deadlines, to a high
quality and at a fixed price.
Ray can be contacted at [email protected]