The hospitality industry is one of the largest sectors of the UK economy and employs around one in ten of us. However, managing your hospitality business is not all smooth sailing and you may face challenges. In this blog, we have put together an accounting guide to help hospitality businesses succeed financially.
Why are hospitality businesses important?
The hospitality industry is incredibly diverse. There is a wide range of sectors within the industry, from hotels, restaurants, bars, clubs, and pubs. However, all of them face similar challenges.
The main function of the hospitality business is to provide entertainment, experiences, and facilities to consumers. As a result, consumers power the industry. If successful, hospitality businesses can encounter exciting opportunities for growth and diversification.
What challenges do hospitality businesses face?
Hospitality businesses face a unique set of challenges. As customer-facing businesses, they rely heavily on people and their ever-changing spending habits.
The industry is almost completely driven by consumer trends and behaviour. This means that it can change rapidly. For example, during the Covid-19 pandemic, people stopped visiting pubs, bars, and restaurants, cancelled holidays, and found entertainment through digital means. This put immense pressure on those in the hospitality business.
The hospitality industry is highly competitive. This proves especially challenging to those businesses that are starting out, especially as we are emerging from a pandemic. However, quality hospitality venues will always be in demand and the market is constantly diversifying. Changing consumer preferences should also be looked upon as a positive; it may open new avenues for your business that you never thought to explore before.
Consumer confidence is especially low at the moment, potentially creating more challenges for business owners. Customers’ hesitancy to pre-book events, reserve a place at a restaurant or even buy a ticket for a club night due to the pandemic, and now the global economic crisis, means that hospitality businesses are struggling to establish financial security and are unsure of how to plan for the future.
Financial concerns
Most businesses have the ultimate goal of expansion, but in order to successfully grow your business, you need to have financial security. Unfortunately, due to the unpredictable nature of the industry, hospitality businesses often face financial concerns. Not only can this cause stress for business owners, but it can create anxiety for employees who rely on them for regular work and a steady income.
These financial worries are often amplified as many busy hospitality business owners struggle to find the time to organise and manage their accounts. It can be difficult to stay on top of everything at once. Keeping organised and getting help from an accountant can make your business more streamlined. Accountants can assist with managing your accounts and provide bookkeeping help.
Accounting tips for hospitality businesses
Despite how unpredictable and challenging the industry may seem (especially at the moment), there are some precautions and steps that you can take to ensure a financially secure future for your business.
Firstly, make sure that you have secure, and user-friendly accounting software. This will make your life easier when it comes to invoicing, keeping tabs on spending, and general financial management. Consider moving accounting software if your current one isn’t working well for you and your business.
You should also look to improve tax efficiency. Finding ways to reduce your business tax bill can help to improve cash flow, amongst other things. This may be through claiming for deductible expenses such as uniforms, running your premises, and training up a new employee.
Finally, getting the help of an accountant can relieve a lot of stress and worry. At Steele Financial, we can provide you with expert advice and forecasting, and ultimately help you feel confident about your business strategy.
Where to find accounting help and advice
If you are struggling to manage your business’s finances or are worrying about the future, speak to an accountant. They can provide you with financial advice, forecasting help, and the security you need to continue running your business effectively.
Choosing the right accountant is important. Make sure that you speak to an accounting agency that has plenty of experience working with hospitality businesses. At Steele Financial, our accountants stay up-to-date with any new or changing industry legislation that may impact your business, so you can continue to focus on what you do best.
Get in touch to speak with one of our professional accountants and get help for your hospitality business.
