calculator and balance sheet reflecting importance of GMs understanding the financial fundamentals of their operation

This is not the case for all GMs, but it is definitely the case for many.

NB: This is an article from Hotel Financial Coach

The reason is simple: the GM has not been given any formal accounting training and they are intimidated by the numbers and their lack of knowledge.

Because of this they tend to stay out of the way, so to speak, when it comes to digging into what is really going on with the numbers and the accounting department.

That might seem like a natural thing to do, and it needs to be this way to a certain extent. But with a few clues and cues the GM can have a great handle on the numbers person and what they are up to.

That is what this piece is all about, spelling out what the GM can do to help guide the financial path for the hotel and manage the financial leader. If you can do this, you go a great distance to help avoid a financial meltdown under your watch.

An old boss of mine, the controller, was fond of saying this about our GM at the time, “I could do his job, but he could never do mine, he doesn’t even know where to start, he doesn’t know anything about accounting.”

He would finish his rant with, “I might not be able to do his job as well as him, but I still could manage, he would be dead in the water behind my desk.”

Now the statement he made is true to a certain degree, but the GM still has the ability to manage the financial wizard as long as he or she engages.

Most GMs are fond of saying something like this, “I am the No. 1 salesperson for my hotel,” or, “I am the face of service in my hotel,” and maybe even, “I’m the No. 1 public relations asset for my hotel.”

It is a little or a lot of bravado but it goes with the territory and the responsibilities of the job.

However, you will rarely hear the GM say, “I’m the No. 1 finance or numbers person for my hotel,” or, another way of saying it would be, “The buck starts and stops right here.”

What GMs typically do when asked about money is they defer to the financial person, at least at first because they do not want to make any financial missteps. Especially when it comes to questions from the owner or head office about the budget, the cash flow or, heaven forbid, the balance sheet means a deflection straight into the wizard’s hands. This puts the GM in a difficult position.

How can they manage the news when someone else is creating it?

Read rest of the article at Hotel Financial Coach