How to Prepare a Cleaning Budget
Housekeeping is one of the hotel departments that has the most expenses and consumables. Items such as toiletries such as shampoo, conditioner, body lotion or moisturizer, eau de toilette, facial soap, and body wash; bath towel, hand towel, face towel, bath mat, bathrobe, rubber mat; sheet, pillow, pillowcase, decorative pillow, neck pillow, mattress pad, blanket, duvet/quilt filling, bed cover; toilet paper, facial tissues; coffee maker, coffee bag, sugar condiments; ironing board, iron; alarm clock; kitchen utensils, crockery and cutlery; give away toothbrush and toothpaste; Printing materials, stationery, envelopes, notepads, pens, folders, telephone directories, the Bible or the Holy Quran can have a substantial impact on the hotel’s overall expenses.
These are variable assets that when consumed, damaged, lost or deficient are discarded or withdrawn from circulation. Once withdrawn from circulation or consumed, the same quantities must be replenished or replaced with an additional margin to maintain the high standard or quality of service in the hotel.
Fixed assets such as room furniture and fixtures such as beds, refrigerators, televisions, mirrors, sofas, armchairs, recliners, tables, telephones, lamps, headboards, air conditioning/heating equipment, etc. it can be very costly when damaged or deficient. These items are usually included in the capital expenditure budget, especially when a remodel is required. But if it’s just one or two pieces, this amount can be allocated in the operating budget.
For the machine and equipment, the housekeeper’s cart and vacuum cleaners are the most important tools used in the cleaning and general maintenance of hotel rooms and public areas. Machines such as carpet shampoo and dewatering machine, rotary carpet shampoo machine, floor scrubber and polisher, wet and dry vacuum cleaner. hydraulic lift etc are additional heavy duty machines that assist in the general cleaning requirements of the hotel. These are also included in the capital expenditure budget.
For the laundry area there will be a washer, dryer, dry cleaner, laundry folder/calendar, tables, carts, clothes sorting boxes, mobile clothes hanging rails, guest laundry printer, etc. are capital expenditure items, while detergent, bleach, stain remover, dry cleaning fluid, ph level water treatment solution, etc. goes to the operating budget.
Listing all the detailed items involved in budgeting gives you an idea of how complex cleaning budgeting is.quote>
With the numerous items above, consumable or fast-moving items are the most important items in budgeting. Expendable items are included in the operating budget. Fixed asset items are included in the Capital Expenditure Budget or CAPEX.
The operating budget is prepared annually and presented to the Director of Finance for study and to finalize the total amount in coordination with the department head. The operating budget is always based on the expected occupancy rate for the coming year. For example:
Item: toilet paper roll @ $0.50/roll
Consumption in 2008 at 50% occupancy = 50,000 at $0.50 = $25,000.00
The expected occupancy rate for 2009 is 75%
75% – 50% = 25% (25% of 50,000 = 12,500)
(50% + 25%= 75%) = ( $25,000.00 +$12,500.00 = @37,500.00)
The remaining items are calculated in the same way until all required items are included in the next year’s budget.
The capital expenditure budget is for specific items or projects that need to be replaced, manufactured, and built to improve guest service or the hotel itself. For example:
The hotel management, with the approval of the hotel owner, would like to extend the laundry service to non-hotel guests or outside clients. The project will be a “Laundry Shop” therefore a quote from the contractor will be required for the cost to build the Laundry Shop, additional guest/customer laundry bag, laundry and dry cleaning list, and hand additional work for customer service, etc. To summarize the amount of Laundry Construction = $35,000.00; additional laundry bags and lists = $5,000.00 and additional labor = $9,000.00 annually.
The $35,000.00 will be included in capital expenditures, while additional laundry bags/lists and labor will be added to the staffing and operating budget.
Therefore, the Operating Budget is for consumable items and the Capital Expenditure is for special projects or items that are expensive. There are also certain items that are shared by reception and housekeeping. Charges for these items are split between the two departments. When it comes to Housekeeping, the Engineering Department charges Housekeeping for any services provided, such as machine maintenance, where they have to supply machine parts and labor, so these are coordinated with Engineering. It is important that cleaning machines are handled carefully to avoid such charges.
Tracking the operating budget is the most crucial part of running a business. With modern technology and computer software, total expenses updated daily against the budgeted amount are possible and easy to track so as not to exceed the budgeted amount. Each month end, the Accounting Department distributes copies of last month’s budget output to the General Manager and Department Heads for them to review and analyze where their budget is aligned and where it is not. The General Manager will request a reasonable report from the head of the department that has exceeded its budget, since he is responsible both to the corporation and to the owner of the hotel.