This document discusses budgets in the context of hotel housekeeping. It defines a budget as a financial plan for expected operations and resources over a specified period. The purposes of budgets are to state goals and expectations, communicate expectations, coordinate activities, and measure performance. Advantages include planning, coordination, establishing expectations to judge performance, optimizing resources, and measuring efficiency. Limitations include difficulty establishing realistic objectives and standards. The document then provides examples of housekeeping budget heads and templates for creating linen, guest supplies, table linen, uniform, and capital budgets.

1. It is the plan of the organizational
expectations for a specified period expressed
in financial terms. It is a plan for the
company’s operations and resources.

2. PURPOSES OF A BUDGET
To state the organisation’s expectations and goals
To communicate expectations to all concerned
To co-ordinate the activities to maximize the use of
resources
To provide a means of measuring the performance
so that corrective actions evolve.

3. ADVANTAGES OF
BUDGETTING
 Compels management to plan for the future
 Helps to co-ordinate the efforts of the various
departments
 Provides definite expectations to judge the
subsequent performance
 Helps to optimize the use of the resources
 Develops an atmosphere of profit mindedness
and cost consciousness
 Measures efficiency and inefficiency

4. LIMITATIONS OF BUDGETING
 Adequacy of budgeting depends upon
managerial judgement.
 Installation of a perfect system of budgeting is
not possible in a short period
 Establishing realistic objectives and standards
of performance is difficult
 Budgeting will hide inefficiencies if a proper
evaluation system is lacking.
 Will lower morale and productivity if unrealistic
targets are set

5. HOUSEKEEPING BUDGET HEADS
 Replacements and refurbishment
 Capital
 Repairs and maintenance
 Labour
 Guest Supplies
 Cleaning Supplies
 Linen
 China and glassware
 House stationary
 Periodicals
 Decorations

6. ITEMS PAR
STOCK
INV
FIGURE
BAL DISCARDS/S
HORTS
EXPECTED
NET BAL
(REQT)
RATE TOTAL
VALUE
S. B/S 1200 1145 55 12 67 300 20100
D. B/S
GRAND TOTAL 423550
Room Linen Budget

7.  Consumption pattern (CP)
- consumption/room night
 Room nights projection
 Layout
 Items
 Historical data of past three years

8. n 1100
Items CP April May June…………. Total Rate
(Rs)
Value
(Rs)
Soap 0.5 5000 6000 4500………… 1.50 75000
GRAND TOTAL 783450
Guest Supplies Budget
10000 12000 9000
50000
Room
Nights

9. Items No of
tables/
covers
Specs Rest Par
Stock
Linen Room
Par Stock
Inventory
Figure
Balance
TABLE LINEN BUDGET
Items/
Metre
Material
Reqd
Rate/M
etre
Total Mat
Cost
Fabrication
Chg/Pc
Total Fab
Charge
Total
Value

10. Department
Area
UNIFORM BUDGET
Designat
ion
Items No of
persons
Par/
Person
Total Sets
Reqd
Fabric
Specs
Fabric
Rqd/
Item Set
Total
Fabric
Reqd
Inv Bal Net Reqt Rate/m
etre
Total
Cost of
Mat
Tailoring
Cost/Set
Total
Tailoring
Cost
Cost of
Shoes
Total
Cost

11. TYPES OF BUDGETS
• OPERATIONAL BUDGET
• CAPITAL BUDGET

12. OPERATING BUDGET
An operating budget forecasts revenues &
expenses associated with routine operations
during a specified period
Examples of operating expenses:
Salaries, cleaning supplies, guest supplies etc

13. CAPITAL BUDGET
A capital budget plans for the expenditure on
company assets for items costing above a
specified amount.
These items have a useful life exceeding a
year.
Examples:
Furniture, fixtures, equipment, linen uniforms

14. PLANNING THE OPERATING BUDGET
• Room sales forecast (by Front Office)
• Consumption pattern – consumption per
occupied room
• Predicting expected prices

15. PLANNING THE CAPITAL BUDGET
Decision to incur capital expenditure is based
on:
i) Renovation plans
ii) Addition of rooms/public areas
iii) Replacement of equipment, carpets etc
iv) Introduction of automation

16. PLANNING THE CAPITAL BUDGET
Steps in the process
• Supplier identification
• Receiving competitive quotations
• Selection of a supplier
• Making the budget (product, freight and
handling charges

17. CONTROLLING EXPENSES
• Maintaining accurate records
• Effective scheduling
• Careful training and supervision
• Efficient purchasing

18. INCOME STATEMENT
Expresses the actual result of operations
during an accounting period identifying
revenues earned and expenses incurred
A comparison with the operating budget will
indicate the level of success of the hotel
operations