How to Add Value to Your P&L Reviews!
If the only thing you gain from our weekly videos is how to communicate with your team about the financial statements – it will be worth the price of admission!
Our content is about building a team that is bottom line minded so that they can offer their maximum contribution and the hotel can be as profitable as possible.
That takes training and systems, all of which has to be communicated.
Compiling a bunch of data on a financial statement is NOT going to offer any benefit if it isn’t communicated to the right people, at the right time, in a way that is helpful.
So this week we’re talking about PRELIMINARY monthly review!
Before you can evaluate how the hotel did each month, all of the questions have to be answered and everything has to be recorded so that you’re actually looking at the complete picture.
I want to go over with you the exact format we’ve found that your accountant can use to help your team digest the preliminary Income Statement efficiently.
It’s important to get everyone’s input, and that’s more likely to happen if there is clear, consistent communication!
My first tip is to get as many questions answered before prelims as possible!
- The accountant should be asking questions regularly for things like new items showing
up on the daily report or there is bank activity that needs backup.
- Then when it’s time to review preliminary financials, there won’t be as many loose ends.
My second tip is for the accountant to create an email template that they use each month.
- The subject line will say it is the preliminary package for a specific hotel for a specific
- Attach the Income Statement and the Trailing 12 Income Statement
- In the body of the email, bring up items you need the team to review and respond to.
- Things like outstanding bank activity that still needs backup. Expenses that are unusually
high or missing.
- The important thing here is that there are headers for each section of this email. There is
white space, so you can easily see each item. There are bullet points.
These are simple things, but if there is not a specific template that is used each month, these emails tend to get thrown together and end up one huge dissertation that is hard to follow. Important items get lost in the mix.
The next step is for the team to actually be able to digest that information and respond to the questions.
There are a few things that will help the team’s rhythm here.
Make sure everyone is using 2 monitors. This is only one of countless examples where double monitors are going to boost efficiency and decrease frustration. Anyone looking at the financials need so have the Income Statement open on one screen and the notes from the accountant which they are responding to open on another screen. A second monitor is going to be the best $100 investment you’ve ever made.
The second efficiency booster here is for the team to be able to actually pull the Income Statement from within the accounting system. When you do that, you can click on the Income Statement lines in question and see specific detail on what invoices were posted there that month. Having all of the details at your fingertips makes refreshing your memory on what happened that month so much easier, and it makes determining what needs to be reclassed and accrued much more practical than trying to figure it out staring at a PDF.
Alright, lets recap. To get an efficient team conversation going about the Income Statement,
Talk about issues as they come up throughout the month.
Have accountant use an email template to clearly outline open issues and talking points.
Make sure everyone reviewing the financials has 2 monitors.
Gain efficiency by reviewing IN the accounting system.
So your tip for the week is to create clear, consistent communication among your team about the preliminary Income Statement, so that all changes are made and the final product is a true reflection of the hotel’s performance each month!
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