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Meet the clients

Meet the client: Deluxe Hospitality Group

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10th Aug 2016
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As part of a collaborative project with Receipt Bank customers and accountant partners, AccountingWEB is delving into the activities and issues faced by a trio of small UK businesses over the summer.

Every business is unique, and so are the challenges that it faces. But it will share many common characteristics and problems with other companies in the same field. Managing people, stock and numerous small transactions are typical issues for hospitality businesses. Farmers, meanwhile, have to produce special reports and track their assets in a completely different way to other industries.

Accountants have their own unique characteristics too, which are frequently linked to the kinds of clients they serve and the industries in which they specialise. The idea behind this “Meet the client” series is to help practitioners broaden their understanding of different sectors by hearing from entrepreneurs operating on the front line and learning what motivates and frustrates them. And from the accountants who work with them to clear the bottlenecks and point the business in the right direction.

Each introductory article will be accompanied by a short video profile and a companion article setting out the compliance and tax issues in more detail. Taken as a whole, the package is designed to share insights about the sector with other advisers who may be supporting businesses in the same sector. This introductory article looks at a hospitality company. Further case studies are in the pipeline for farming and retail businesses.

Katie Watson, Deluxe Hospitality Group

Deluxe Hospitality is part of a small events/hospitality/catering group operating out of a leafy business park in Holt, Wiltshire.

The business is made up of a trio of associated companies that includes the Field Kitchen, which caters for the local community and does a lively lunchtime trade for other companies based at the business centre. The third entity is a catering company, Eat Five Star.

The multiple company structure is a common model for the industry, according to co-founder Katie Watson, but it can make it difficult to keep a handle on finances.

“We very much see them as a group. We share the ethos between everyone to create the right level of service for that wedding you may be holding. We have a core team that bridges all of that to ensure we keep that continuity,” she says.

The core group of staff can move between different areas of the business, as can stock, with food not used for a banquet turning up in the café the next day. “That’s the beauty of having a range of companies under the same ownership, but we have to do lot of transactions to ensure the accounts are right behind the scenes,” Katie explains.

“We want to know not only that the group is doing well, but that the individual companies are performing at the right rate for the given season.”

Business characteristics and challenges

As a people-based business staffing is the biggest challenge for Watson. “What I love about the business is that it’s all about devising what fits people and hand-picking the exact service that our client may want,” she says.

When big events come around, the team can quadruple overnight. The menu created at a tasting in a static kitchen might have to be recreated for 150 people in a tent in the middle of a field.

With such a complex mix of permanent and temporary staff, a robust payroll system is paramount to log and pay staff on time and ensure HMRC gets the information it needs.

Stock control is another big challenge. “Years ago it was very difficult to track stock purchases and use. We used to have piles of receipts in the corner and hope to have time to work through them. Often that wouldn’t happen until a mad rush around VAT return time,” she says.

Cloud accounting tools such as Receipt Bank and Xero have been “revolutionary” for Deluxe, by making it possible to process stock receipts on a weekly basis.

“At the end of the week, month or year we know exactly where we are without keeping reams of receipts, which is very impractical,” says Katie.

When she meets her accountant, Jessica Pillow from local firm Pillow May, Watson says they spend a lot of time talking about strategy and accounting systems. The company structure makes it difficult to stay on top of staff, stock and group performance, so Pillow recommended CrunchBoards to get a unified view.

“We talk through practical solutions so that everything behind the scenes is in order and not weighing us down so we can look forward and know where we’re going, and that we’re growing at the rate we need to be growing,” says Katie Watson.

Accountant’s diagnosis - Jessica Pillow, Pillow May

Based not far from Deluxe in Chippenham, Jessica Pillow serves a number of rural, food-based clients and sees many of the same patterns around paperwork and stock management that can be simplified with suitable cloud add-on tools like Receipt Bank. This is her perspective on Deluxe Hospitality and its associated companies.

The first thing we do when we meet with companies like Deluxe is find out from the owners what they want to get out of it. We will often work with them to define strategy and then try reporting to it. That can be a challenge for small mixed groups like Deluxe. If they’re using leftover food and resources in different parts of the businesses, how do they account for it and report on it? They want to get that group view, which is why CrunchBoards can be a good fit.

We put Katie and Ed in touch with a growth accelerator, so they already have a strategy. When we meet now, we’ll interrogate different bits of it and see if there are things that need to be fixed.

The combination business is very characteristic of the hospitality industry, and their usual gripe is about dealing with all the little receipts they get. If they’re short of an ingredient for a big catering order, they’ll go to the supermarket to get it. Receipt Bank is great for these businesses because it can take care of all that.

During our conversations we spend a lot of time looking at other issues and looking for apps that might help. Having tackled capturing and managing transactions within the group, we’re now talking to Katie about some of the other issues she mentioned that affect other catering businesses, such as staffing and time tracking, stock control and point of sale for the restaurant.

Sponsors note: Receipt Bank extracts the key information from your client receipts and invoices, removing the need for time consuming manual data entry.

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