A financial advisory and accounting can be best described as a review of the financial statements of a company which is done independently. The primary objective behind conducting a financial advisory is to make sure that all the financial information, that has been registered or documented, is complete and accurate. Through a financial advisory and accounting, investors, managers, regulators, and other stakeholders are given an overview of the company’s financial health.
While carrying out a financial advisory and accounting service in Saudi Arabia is important in every industry, one could study its impact on the leisure and hospitality industry to get a better idea about its overall importance and necessity. The hospitality industry, which witnesses countless transactions regularly, cannot sustain itself without a proper financial advisory and accounting.
How Does The Hospitality Industry Benefit From a financial advisory and accounting?
Whether you are running a large-sized hotel, a modest restaurant, or a self-funded café, you will benefit in several ways by carrying out financial accounting. Apart from keeping the finances of your business in check, it will also help you formulate plans or ideas for growth and expansion. The sooner you invest in financial advisory and accounting, the faster you will see the results.
Here are some of the different ways in which the hospitality industry benefits from a financial advisory and accounting:
· Verifying Financial Statements
For a business operating in the hospitality industry, creating financial statements. One must also verify and cross-check them to ensure there are no discrepancies and that all the information is correctly recorded and accurate.
Through a financial advisory and accounting, different financial statements like the balance sheet, cash flow statement, and income statement are examined thoroughly. The financial advisors gives a verdict on whether the financial statements represent the financial position of a company accurately or not.
· Detecting Frauds
Sometimes, the government instructs reputed accounting firms to look into the financial statements of companies in the hospitality industry who have been accused of engaging in fraudulent practices. These firms go through the financial statements minutely and if any irregularities are detected, they report to the government.
financial advisory and accounting have played an important role in controlling the malpractices and financial frauds taking place in the hospitality industry. Sometimes, financial fraud can be carried out by an employee in a hotel without the knowledge of the owner. Because of these reasons, carrying out financial advisory and accounting in the hospitality industry is extremely important.
· Being Accountable to Stakeholders
When you have set up a hotel with the money given to you by a bunch of investors, you need to have a sense of accountability towards them. Whether the hotel is doing well or making losses, you have to be transparent and divulge every piece of information to them honestly. Carrying out financial advisory and accounting regularly is one of the best ways to keep the trust of your investors intact.
Often, businesses collapse when there is a lot of stress between the entrepreneur and the various stakeholders who have put their money into it. To ensure your investors continue to back you up and play an active role in the growth of your business, you should create financial advisory and accounting and keep them in the loop about them.
· Adhering to Accounting Standards
Every business is expected to be compliant with some existing accounting standards and principles put together by government agencies and regulatory bodies. Not adhering to them could land a business in legal trouble.
As a business owner, you might not be fully aware of the different accounting standards or principles. To make sure everything is done by the book, you should hire the services of accounting firms that can examine your financial statements and carry out financial advisory and accounting.
How financial advisory and accounting Helps the Hospitality Industry in Retaining Customers
If you are running a hotel or a restaurant, you would want your customers to come back to you repeatedly. To ensure that happens, you need to carry out financial advisory and accounting regularly. The hospitality industry thrives on guest satisfaction and customer loyalty. While the quality of service you provide your guests or customers plays a part in determining whether they would want to stick with you or not, a few other factors, too, come into play here.
When a hotel or restaurant does not engage in regular financial advisory and accounting ends up in legal trouble or some other issue, it gets spoken about. As a result of this, the reputation of the property gets tarnished and it loses a chunk of its customers. The reputation and credibility of a business thrive when it remains accountable to everybody including its stakeholders and customers.
Many times, businesses operating within the hospitality industry are rewarded for complying with government policies and accounting standards and being fair and transparent in their financial dealings. Getting awards or rewards for being honest and fair does a lot of good to the reputation of a business and helps it attract a larger customer base.
Sometimes, a manager of a restaurant might overcharge a customer by accident or include items in the bill that the customer did not order. This could lead to the customer getting upset and deciding not to come back to that restaurant again. Through a financial advisory and accounting, such mistakes are traced easily and the management, on their part, could ensure that such things are not repeated.
Final Word
A business, operating within the hospitality industry, might face several challenges while creating a financial advisory and accounting. While a financial advisory and accounting can help tremendously in changing the fortunes of your business for the better, it has to be done correctly. Mostly, businesses face certain challenges when they try to carry out a financial advisory and accounting internally.
If you are struggling with doing a financial advisory and accounting of your hospitality business, you should consider reaching out to one of the reputed accounting firms out there and seek their help in putting your financial statements in order. Apart from helping you conserve a lot of time and effort, it will also ensure everything is done properly and correctly.
