plaza hotel catering
Sportservice Corportion formed a joint venture with Great Performances, a small New York City catering company, to operate food and beverage at the Plaza Hotel’s banquet facilities in New York. The Sportservice Vice President of Finance asked me if I would assume the role of Controller during the start up phase of the operation. This process would last a little over one year.
My first task was to set up the partnership in Delaware North Companies (DNC) PeopleSoft General Ledger software. I met with various members of the IT group to get this process accomplished. Without a General Ledger, we would not be able to record financial transactions associated with the partnership. Once the General Ledger was established, we were able to process invoices in the Accounts Payable system. I closed the books each month and issued financial statements to management.
As part of the agreements with the owners of the Plaza Hotel and our partners, Sportservice, a DNC Company, agreed to spend $13 million on dining room and kitchen renovations and equipment to operate the banquet facilities. I received an invoice from the General Contractor each month, supported by bills that had been incurred. I reviewed the billings for accuracy prior to approving them for payment. I also met with DNC’s Director of Facilities Planning each month to ensure we were still within our capital expenditures budget.
Our partners would be the day to day managers of the operation once it was up and running. They were beginning to hire management staff and needed a method of paying them. I met with ADP and Paychex to discuss processing payroll. After listening to proposals from both companies and discussing them with our partner’s Vice President of Finance, I selected ADP and managed the relationship throughout the time that I was Controller. I set up the confidential management payroll, performed weekly file maintenance, and ensured the employees were paid the correct amounts.
I put together a schedule of management employees that our partner hired with their salaries and promised bonuses. Each time a new employee was hired, I updated the schedule and presented it to Sportservice management to advise them where the annual cost of the management employees stood in comparison to the proforma statements contained in the original proposal.
The new company needed a competitive package of benefits for its employees. I held several meetings with the DNC Vice President of Human Resources to discuss various alternatives. I designed several spreadsheets with various benefit alternatives and their associated costs. When I was finished, we designed a comprehensive employee benefits package that included health care, dental, transit pretax plan, and 401K plan that kept the payroll tax and benefit cost within the proforma percentage of wages.
I made a list of standard journal entries and used this check list each month to ensure all standard journal entries had been entered. I developed the Daily Sales Report that would be used to record revenues each day into the General Ledger system. I also developed the Payroll entries that would be used to record the two payrolls, the confidential management payroll and the union payroll. The payroll clerk, who reported to the Controller, did the union payroll while the Controller would continue to do the confidential management payroll.
With IT’s assistance, I adapted Sportservice’s Weekly Operating Report software to the Plaza Hotel Catering operation. This report permitted the Controller to report revenues and related costs each week to management. Even before operations commenced, I was able to issue weekly reports that summarized payroll and controllable expenses for management’s review. At month end, I was able to compare the Weekly Operating Reports issued during the month to the Profit and Loss Statement produced from the General Ledger system and investigate any differences.
There were three important agreements that needed monitoring to ensure we were in compliance: lease agreement, joint venture agreement, and union contract. I met periodically with our Legal Department to discuss how best to comply with certain provisions of these agreements. After these meetings, I documented the discussions with the Legal Department in memos and issued them to management. In addition, I noted critical dates on my calendar and alerted management when these dates were approaching so they could take appropriate action.
When our partners hired a Controller to be based at the Plaza Hotel in New York City, I traveled to New York each week for six weeks to train my replacement. I taught the new Controller the systems that I had established. I went through month end close with the Controller and showed him how to write the standard journal entries documented on the check list. I also went through the Weekly Operating Report for several weeks. At month end, I showed him how to compare the month’s report to the General Leger issued P&L and investigate differences. When the training was complete, the new Controller was very confident that he could do the job.
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