Part IV · Undistributed Expenses and GOP
Chapter 18Administrative & General and IT Systems Expense Budgets
Building separate Schedule 5 and Schedule 6 forecasts from revenue strategy, labour, transactions, systems, shared services, renewals, projects, and control risk
Questions this chapter helps answer
- How should a hotel budget Administrative & General and IT costs separately while preserving their distinct drivers and controls?
- How should transactions, contracts, systems, users, renewals, projects, shared services, and control risk feed A&G and IT forecasts?
- How should shared-service, AI, and automation proposals prove recurring cost, transition cost, displaced local work, and operating value?
Key concepts
- A&G budget
- IT budget
- Schedule 5
- Schedule 6
- contracts
- renewals
- systems register
- shared services
- automation
- control risk
Building separate Schedule 5 and Schedule 6 forecasts from revenue strategy, labour, transactions, systems, shared services, renewals, projects, and control risk
Administrative & General (A&G) and Information and Telecommunications Systems (IT) are taught together in this chapter because both sit below Departmental Contribution and support the whole hotel. They are not, however, one budget or one reporting schedule. A&G must remain a separate control platform for governance, credit, people, professional services, security, compliance, and administration. IT must remain a separate technology platform for connectivity, systems, subscriptions, data, cybersecurity, support, hardware, and implementation. The practical task is to connect each line to the approved revenue, labour, service, cost-control, and technology strategy; phase it over twelve months; protect its reporting home; and refresh the forecast when a driver, contract, renewal, project, or risk changes.
EXECUTIVE TAKEAWAY
Do not budget A&G and IT by applying one overhead percentage to revenue or by carrying prior-year spend forward. Build two separate schedules. For each material line, show the capability being supported, the operating or contractual driver, the evidence, the owner, the monthly timing, the renewal or project decision, the cost behaviour, and the consequence of reducing or delaying it. Ratios are review outputs; the budget is the operating logic underneath them.
Learning outcomes
- Keep A&G and IT as separate working and reporting schedules while consolidating them for support-cost and owner review.
- Budget twelve practical A&G working lines from labour, card settlement, credit exposure, contracts, compliance, transactions, and management decisions.
- Budget twelve practical IT working lines from users, employees, rooms, terminals, devices, systems, storage, usage, service levels, projects, and renewals.
- Connect support cost to Rooms, F&B, events, other operated revenue, commercial strategy, labour strategy, and zero-base cost-control decisions.
- Model HRMS and other software using the correct contract basis—per employee, per user, per module, per entity, per transaction, fixed subscription, usage, or custom development.
- Separate recurring operating expense, one-off implementation, minor equipment, capex, prepayment, shared service, and owner decisions.
- Prepare a monthly forecast that diagnoses price, volume, usage, timing, renewal, classification, project, and source changes before revising the full-year outlook.
Digital companion
Practice and apply this chapter
Open the working resource associated with this section. Access follows the resource setting shown on each card.
Excel workbook / working template
DC-18 Administrative & General and IT Systems Expense Budgets
Building separate Schedule 5 and Schedule 6 forecasts from revenue strategy, labour, transactions, systems, shared services, renewals, projects, and control risk
DC-18_AG_and_IT_Systems_Expense_Budget_Model_v2.0.xlsx · download readyChapter-end learning
Apply, check, and remember
Apply it to your situation
Connect the chapter to a real hotel decision
As you answer, think about where this issue appears in your own property, team, report, meeting, or control process. Work through one item at a time, check the result, and then continue.
Open learning preview: the quiz and flashcards are available to everyone. Answers are checked immediately, while the detailed reasoning remains in the complete chapter. Sign in to save quiz attempts and flashcard confidence.
Knowledge check
Question 1 of 8
Memory practice
Flashcard 1 of 12
Reveal the answer, decide how confident you are, and then move to the next card.
Continue the discussion
Share how this applies in practice
Respond to either prompt, or connect both prompts in one practical response.
Discussion prompt 1
The SaaS model has a $50,624 first-year teaching TCO. The illustrative custom build requires development, cloud, security/testing, integration, documentation/training, and support, with an estimated $144,000 first-year TCO.
Should Azure select the sample HRMS SaaS model or develop a custom system?
Compare year-one and steady-state cost, functional fit, implementation risk, data/privacy, integrations, payroll accuracy, support ownership, technical debt, exit, and the property capitalization policy. State which option you would approve and the conditions.
Discussion prompt 2
The proposal adds recurring and transition cost, may duplicate local capability, and claims time release without yet changing approved FTE, overtime, outsourcing, or contract scope.
How should management evaluate an AI or shared-service proposal that promises a large labour saving?
Identify the formal Schedule 5 or 6 home, implementation month, SLA/KPI, data and continuity controls, local cost displaced, no-double-count test, and forecast trigger. Distinguish theoretical hours from an approved cash or capacity change.
Sign in to contribute to this discussion.
0 responses
Responses are public and may be moderated to keep the exchange professional and useful.
No responses yet. Start the discussion with a practical example or a question raised by the chapter.