Why a Weekly Food & Beverage Inventory is Crucial
to your Small Business
to your Small Business
Uncover 4 Drains on your Business!
Most
independent restaurants calculate their food cost only once a month. Yet,
virtually all the major chain restaurants calculate their food cost each week.
According to industry averages, chain restaurants (before corporate expenses)
are two to three times as profitable as independent restaurants. While weekly food and beverage costing isn’t
the entire reason, it’s a large part of it.
A
weekly inventory is an important tool in controlling costs and cash flow. Here
are four potential problems that could have a strong negative financial impact and
that a weekly inventory can help you to uncover:
Waste - It happens in every restaurant: A server
accidentally spills a plate of food, or a kitchen worker burns several pieces
of steak. No matter how it happens, all restaurant staff should get into the
habit of recording all wasted items. Often the best defense against lost
inventory is simply recording any raw product that is wasted and any
complimentary items that are given away. If you don’t have a POS system that
can handle this, an
easy alternative is to handwrite the item, the amount wasted, and the reason it
happened on a clipboard sheet. This way, all inventories is accounted for when
analyzing usage.
Food Handling and Spoilage – Akin to waste, poor food handling
that makes product unusable is one of the biggest contributors to depleted
inventory. Commercial kitchen operators would do well to implement a mantra of
"label, date, rotate and consolidate" with kitchen staff. When food
is properly labeled and correctly dated, workers know what to use and when.
Proper First-In, First-Out (FIFO) rotation is essential for reducing food
spoilage, and proper consolidation from large, unwieldy containers to small,
manageable ones will keep food fresher and more visible for use.
Theft - Employee theft is an unfortunate reality in many restaurants,
and can be a reason for lost inventory. Theft involves anything from stealing
full bottles of alcohol to eating restaurant food outside of employee meals.
Keep an eye out for behavior that may point to restaurant employee theft and
make sure you have the proper controls in place to prevent it.
Proper Product Ordering – Keeping excess inventory is
expensive and proper product ordering, in frequency and amount, in accordance
with your usage, is crucial to your success. This helps to prevent waste, promote
proper handling and deter theft. An
excess of product might signal to employees that wasting food (as in making
repeated mistakes) is acceptable, or that one bottle won’t be missed. Invariably more food ends up burned, in the
garbage or given away. With less product
to work with, food and beverages are handled more responsibly and less ends up
wasted or stolen.
By taking a
weekly inventory, you will have a full report on the current state of your
business, and will be able to address issues before they become problems: Is
food being wasted because employees are working irresponsibly, or the kitchen
staff is not properly trained? Are managers ordering appropriately for the level
of usage or is an over-order of staple items sitting unused? Are there proper
procedures to account for the top-shelf liquor that seems to evaporate, and do
you need to keep two cases of it on hand?
You will be
able to foster a “culture of accountability” where managers and staff are held
accountable for their work, producing a more effective workforce in your
establishment.
Knowing
your business in “real time” will allow you and your managers to be more nimble
in responding to issues and better utilize your resources.
Let 4Q Consulting, LLC help you develop proper inventory
and reporting procedures, to increase your efficiency and bottom line profits!
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