Managing Restaurant & Hotel Food Inventory – (Part 2 of 4)
One major component of managing your food cost is managing your inventory. Controlling your end of month food inventory revolves around four specific tasks: Taking inventory, verify credits & transfers, verify the pre-closing food inventory balance sheet, and check posted inventory. Managing each step of this process is vital to being on top of your numbers.
Verify Product Credits, Transfers, and Marketing Credits
Verify with accounting that all of your product credits are correctly recorded. Be sure that you have received all credits that you should have received. These include credits for product that was returned; miss-picks; being shorted on product which you were still billed for; and so on. Keep a separate file throughout the month to track credits that you should be receiving so it will be easy to track these down at the end of the month.
If you receive transfers from, or make transfers to, other departments within your operation, verify those numbers to make sure that they accurately reflect both the correct quantity and the correct price.
If you participate in food shows, charity events, or other marketing events, you should keep track of your food cost for those events. Even if your company does not have a budget line for marketing events, you should still track your cost for these events. This way, if your food cost comes in unusually high for that month you can say, “I had a half a point of cost due to this event that we did to promote our business.”
If you don’t see these product credits & transfers posted to your account then verify with accounting what the status on them is. Are they to be posted to your account next month? Or did they accidentally get posted to a different account? Always get your money, or at least know how much you have given away.
Transfers-in & Transfers-out
This refers to a property which has multiple venues which purchase their own products and have separate P&Ls, such as a hotel which has a restaurant, a deli, and a catering department. If the restaurant ran short on product and needed lettuce from the deli this would be a Transfer-in for the restaurant and a Transfer-out for the deli. The cost of the product would be transferred from one venue to the other and would be reflected in the General Ledger and the Cost Of Goods (COGs) for each venue as relates to budgets and food cost. It is a way to keep a more accurate analysis of the financials of each venue. If you have a stand alone property (one unit), then this is irrelevant because you make no transfers, with the possible exception of employee meals.
Continue the article on the verifying the Food Inventory Sheet page.
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