Cp3 Accounting Essay

344 Words2 Pages
CP3 Accounting System The CP3is four steps that help the hospitality business or any business for that matter run more efficiently. CP3 stands for 1. A monthly Commitment budget, 2. A Purchase order system, 3. A daily Payroll system, and 4. A daily Profit and loss statement. Notice he bold words that is how they got CP3. The commitment budget is a day-by-day forecast of revenues and expenses in a hotels monthly income statement. Each department head has to prepare a statement of the budget, sign it, commit to it, and send it to the general manager. “The purchase order in the CP3 system is the source document for all of the company’s expenses recorded in its accounting system, in other words it is the document that the hotel controller uses to charge expenses on the hotel’s books” (DeFranco and Lattin 2007). In other words as long as it falls within the monthly budget it can be approved right away without waiting for an invoice. The payroll part of the system is set up to help see not only who shows up for work and who does not but also if any overtime has to be paid out which might put the monthly budget over what it is set at. That of course would not be good for the hotel because they would be losing money instead of making it. The last part of the CP3 kind of explains itself, it is a daily report from all of the departments showing profit or loss for the day in which the general manager will go over and make any changes necessary. This type of system seems to follow all GAAP guidelines and as far as disadvantages if there are any they are minimal at best. This system works there is no doubt to that. Reference DeFranco, A.L., & Lattin, T.W. (2007). Hospitality financial management. [University of Phoenix e-text]. Hoboken, NJ: Wiley. Retrieved January 28, 2012, from University of Pheonix rEsources HTT/230- Finance for Hospitality
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