Finance Terms
What is finance?
Finance is defined as the management of money and includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting.
The financial system includes the circulation of money, the management of investments, and money lending. In businesses, the finance team is responsible for ensuring the company’s capital is adequate, that appropriate investments are made, and that the company’s revenues and expenses are well-managed.
What is hospitality and tourism?
Hospitality and tourism is a global, service-driven industry focused on facilitating travel, providing accommodation, and creating memorable experiences for guests. It combines tourism (travel, attractions, transportation) with hospitality (hotels, restaurants, services) to cater to people away from home for leisure or business.
What is Marketing?
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
What should you pay attention to when you first look at the test?
1. Read the performance indicators
2. Understand the scenario
3. Identify the problems within the scenario
4. Identify your assignments within the scenario
Determine strategies for resolving customer-service situations.
Strategies:
Maintain calm tone and open body language
Do not interrupt customers, listen attentively, identify their problem
Acknowledge frustration without admitting fault prematurely
Offer:
Refund, Exchange, Store credit, Repair, Discount on future purchase
Define these key terms:
Credit risk
Good vs Bad debt
Write-offs
Revenue cycle management
Days Sales Outstanding (DSO)
Credit risk: The risk that a customer or insurer will not pay what they owe.
Good vs Bad debt: Money owed that will likely be paid vs Money that probably will never be collected.
Write-offs: When a business officially removes unpaid debt from its records because it believes the money will never be collected.
Revenue cycle management: The process of tracking money from when a service is provided until payment is collected (billing → insurance → payment).
Days Sales Outstanding (DSO): The average number of days it takes a business to collect payment after making a sale. Lower DSO = faster collections.
Define these terms:
Customer Relationship Management (CRM)
Service Culture
Service Recovery
Brand Trust
Customer Relationship Management (CRM): A system used to track customer data, interactions, and preferences to improve relationships.
Service Culture: The shared values and behaviors that define how employees treat customers.
Service Recovery: Steps taken to fix a negative customer experience.
Brand Trust: Confidence customers have that a brand will deliver on its promises.
Define these key terms:
Marketing Campaign
Value Proposition
Market Segmentation
Target Market
Marketing Campaign: sets of strategic activities that promote a business’s goal or objective.
Value Proposition: A clear statement explaining why customers should choose your program over others, what unique value you provide.
Market Segmentation: Dividing a broad market into smaller groups based on characteristics (age, income, school type, goals).
Target Market: The specific group of customers a business chooses to focus on.
1. Identify key tasks
2. Delegate tasks between your friends
3. Summarize key information about your pitch
Describe the need for financial information.
Financial information is essential because it allows a business to measure performance, make informed decisions, secure funding, manage risk, and ensure long-term sustainability.
Financial statements like:
Income statements
Balance sheets
Cash flow statements
help determine:
Profitability
Revenue trends
Expense control
Asset and liability position
Managers use financial information to decide:
Whether to expand
Whether to cut costs
Whether to raise prices
Whether to discontinue a product
Ensure cash flow stability, Comply with Legal and Tax Requirements, Attract investors and loans, Evaluate efficiency and risk
Define these key terms:
Collection cycle
Liquidity
Financial ratio
Turnover ratio
Credit policy
Aging report
Collection cycle: The time it takes to get paid after a sale is made.
Liquidity: How easily a business can pay its short-term bills using available cash or assets that can quickly become cash.
Financial ratio: A number calculated from financial data to evaluate business performance (like profitability or efficiency).
Turnover ratio: A ratio that measures how efficiently something is used or collected. A/R turnover shows how fast a business collects payments.
Credit policy: The rules a business sets for allowing customers to pay later. Includes payment terms, deposits, and penalties.
Aging report: A report that shows how long payments have been overdue (e.g., 30, 60, 90+ days late).
Define these terms:
Employee Accountability
Customer Relations
Hospitality Standards
Personalization
Employee Accountability: Systems ensuring staff are responsible for their behavior.
Customer Relations: How a company builds and maintains positive relationships with customers.
Hospitality Standards: Expected behaviors for delivering high-quality service (greeting, attentiveness, inclusivity).
Personalization: Tailoring service to individual customer needs or preferences.
Define these key terms:
Promotional Mix
Channel of Promotion
Brand Equity
Promotional Mix: The tools a company uses to communicate with customers (Eg. advertising, public relations, sales promotion, etc…)
Channel of Promotion: The platform used to reach customers (social media, school partnerships, events, etc…).
Brand Equity: The value of a brand based on reputation, recognition, and trust.
How should you present your pitch?
1. Speak clearly and confidently
2. Use your body language and maintain eye contact
3. Speak in a friendly and positive tone
4. Be creative in your presentation (draw diagrams, pictures, slogans, acronyms)
Determine ways of reinforcing the company’s image through employee performance.
1️⃣ Deliver Consistent Customer Service
Consistency builds trust.
Ways to reinforce image:
Greet customers professionally
Use positive language
Respond promptly to concerns
Follow through on promises
2️⃣ Demonstrate Product Knowledge
Confident, informed employees reinforce credibility.
Strategies:
Ongoing product training
Clear understanding of features and benefits
Ability to recommend solutions
5️⃣ Exceed Expectations
Memorable service strengthens reputation.
Examples:
Personalized recommendations
Following up after a purchase
Small goodwill gestures
This builds positive word-of-mouth and online reviews.
That directly impacts long-term profitability.
Define these key terms:
Balance Sheet
Accounts Receivable
Accounts Payable
Cash Flow
Collection Systems
Balance Sheet: A financial statement that shows what a business owns (assets), owes (liabilities), and the owner’s value (equity) at a specific point in time.
Accounts Receivable: Money customers or insurance companies owe the business for services already provided but not yet paid for.
Accounts Payable: Money the business owes to suppliers or vendors for things it has bought but hasn’t paid for yet.
Cash Flow: The movement of money in and out of a business. Inflows = money coming in, Outflows = money going out
Collection Systems: The process a business uses to collect payments (billing, reminders, follow-ups).
Define these terms
Customer Relationship Management (CRM)
Omnichannel Experience
Ethical Service Standards
Reputation Management
Loyalty Program
Customer Relationship Management (CRM): A system used to track customer data, interactions, and preferences to improve relationships.
Omnichannel Experience: Providing a consistent experience across in-store, online, and communication channels.
Ethical Service Standards: Guidelines ensuring employees act fairly, respectfully, and professionally.
Reputation Management: Protecting and maintaining a positive public image.
Loyalty Program: A system that rewards repeat customers to encourage retention.
Define these key terms:
Service Marketing
Customer Journey
Market Penetration
Thought Leadership
Service Marketing: Marketing focused on intangible experiences rather than physical products.
Customer Journey: The stages a customer goes through from awareness to enrollment and loyalty.
Market Penetration: Increasing sales within an existing market.
Thought Leadership: Positioning a brand as an expert or authority by sharing insights, ideas, and expertise.
How should you split your presentation time?
Explain factors that influence customer/client/business buying behavior.
Buying behavior is influenced by psychological, social, situational, and economic factors
1️⃣ Psychological Factors
These relate to how a customer thinks and feels.
Perception – How the customer views the brand
Motivation – Needs or desires driving purchase
Attitudes and beliefs – Past experiences shape trust
Learning – Previous satisfaction or dissatisfaction
2️⃣ Social Factors
People don’t buy in isolation.
Family influence
Peer groups
Social media trends
Cultural background
3️⃣ Personal Factors
These are individual characteristics:
Age
Occupation
Income level
Lifestyle
Personality
5️⃣ Situational Factors
These are temporary conditions.
Time pressure
Store atmosphere
Urgency of need
Occasion (gift, emergency, celebration)