Food Cost

Can anyone explain the effects of receiving the "truck" full of supplies on the same day one does inventory? Does this effect food cost in a negative way and if so how can one combat this unfortunate situation? As a brand new Culinary Manager with most of my experience loaded toward the front of the house, any info would be greatly appreciated. Changing day of delivery is not an option.

By Foodpump (Foodpump) on Sunday, March 06, 2005 - 10:47 pm: Edit

Nightmare. Section off all of the new goods and don't include them in the inventory. Make sure you write very clearly on the invoice for the new goods that they are not included in this month's inventory. Make sure the accountant/owner is aware of this.

Welcome to the back of the house

By Chefgibz0 (Chefgibz0) on Monday, March 07, 2005 - 09:24 am: Edit

I have the unfortunate senario where my period end and delivery days are the same. What I have worked out is a system of ordering by where that delivery day is a small delivery with the exception that there are no big parties in between deliveries and it has not affected my period cost numbers in any significant manner. My costs are balanced and pretty even flowing. Also if you chose to not include those goods in inventory as foodpump said....make sure A/P does not add that delivery total into that periods COGS.

By Cheftim (Cheftim) on Monday, March 07, 2005 - 05:19 pm: Edit

How will a delivery effect food cost?

Do you know how to calculate Food Cost? I guess not if your asking that question.

How it will effect your food cost is hard to answer with knowing if you are inventorying the delivered goods and posting the invoice.

If you are doing both it won't effect the food cost.

If you counting the goods and not posting the invoice the you food cost will go down now and up later.

If you are posting the invoice and not counting the goods your food cost will go up now and down later.

If your doing neither then it will not effect your food cost.

Hell, if you counted everything else already, just add the invoice to the inventory and post the invoice.

"Culinary Manager", That's one I never heard of.

By Mac131 (Mac131) on Tuesday, March 08, 2005 - 08:43 am: Edit

Thanks for all the responses. I work for one of those corporate chains where all one does is plug in the numbers and the almighty computer spits out everything anyone would care to know about our ops. Currently, I have been posting and counting the delivery and wondered if that effectd my cost. All other storees in my region receive their truck the day after inventory. Through out the years our food cost has been sgnificantly higher than the area/company standard. We have a sister concept next door that is in the same boat I am delivery/inventorywise and their costs considered high also. So, this made me wonder and seek advice from all of you distinguished gentlemen. Thanks again!

By Chefjoannam (Chefjoannam) on Tuesday, March 08, 2005 - 11:17 am: Edit

food cost percentage is menu price minus AP(as purchased) price - PER ITEM.

EX: if you buy a box of avocados, you are paying by weight for the whole box... but since you can't "use" the pits and the skins on a plate, you have to figure out how much usable food you're putting on each plate when calculating the cost. (as a rough guess, an avocado weighs .75 lbs, usable product (the green flesh) only comes to .5 lbs)

This is first quarter culinary school stuff. I'm not dissing you for not going to culinary school, but you should be familar with the process of how to price out any given menu item.

if you're "off" compared to other stores in the chain, it sounds like there's something wrong with your food cost percentage calculations... or theirs!

if you're not doing food costs on each individual item, there's no way you can know if your costs are exceeding other stores. obviously, if you sell more food, your costs should be higher -- assuming you're doing things consistenly compared to the other stores in your chain, if you have the same suppliers, giving the same portion sizes, pricing the same, etc.

the food cost percentage is the number that determines whether a restaurant stays in business. Are you floating "acceptable" numbers in all the other areas of your business?

...and hey, a few of us "gentlemen" are chicks, and not all the "gentlemen" are distinguished!

Chef JoAnna

By Cheftim (Cheftim) on Tuesday, March 08, 2005 - 11:57 am: Edit

JoAnna,
good description of plate cost, not food cost.

Food cost=[{opening inventory + total cost of food bought,(invoices) }-closing inventory]/ total sales

if you sell more food, your costs should be higher -- assuming you're doing things consistency

If your doing things right it's more likely your food cost will be lower, volume does a a lot to smooth out some of the bumps. i. e. That case of lobster that someone left on the loading dock and spoiled won't be such a hit to higher sales.

and then some of us aren't gentlemen

By Chefjoannam (Chefjoannam) on Tuesday, March 08, 2005 - 12:44 pm: Edit

I think we've confused costs with percentages.

if you sell 10 lobsters you have to have bought 10 lobsters. if you sell 20 lobsters, you'll have to have bought 20 lobsters. the percentage is the same, but the cash outlay (and the revenue) will be different. unless your costs go down with quantity discounts, which is a whole 'nuther story ;-)

but otherwise, Tim's right...and I get the impression he *is* a gentleman.

Mac, if the delivery date must be static, why not change the date of inventory?

By Chefgibz0 (Chefgibz0) on Tuesday, March 08, 2005 - 12:48 pm: Edit

ChefTim.......I have had your web page on my favorites list for a while, but never really looked at it til the other day.....I commend you on a nice site.....very nice links...how did you find them?

By Cheftim (Cheftim) on Tuesday, March 08, 2005 - 02:34 pm: Edit

Percentages represent the ratio of cost$ to sales$ or profit$ to sales$. That's it. understanding the ratio of cost to sales or profit to sales is the only way to understand where your money is going.

How did I find such "nice links?" It's not the finding it's the remembering when you need them again. An then using discretionary judgment when posting them.

Thank you for the compliments. I'm not sure he wants the credit but George has been a mentor of mine and his Escoffier.net family of sites a example to follow for some time.

By Grwall (Grwall) on Tuesday, March 08, 2005 - 04:50 pm: Edit

Chef Tim has the right of it. All food purchases posted must be counted, then they cancel out.

This link is from my lesson plans for inventory in my management class. Perhaps it will prove useful.

http://members.shaw.ca/gwall/kmgt275/inventory.htm

By Jonesg (Jonesg) on Wednesday, March 09, 2005 - 05:33 am: Edit

P&L is more accurate over a longer period than one month. I wouldn't worry about it.

By Chefstef4 (Chefstef4) on Sunday, February 04, 2007 - 01:07 am: Edit

Looking to purchase equipment that has been used. Will be used for my wholesale bakery. The owner is asking 45K. Included in this amount is the hood system, cooling fans on roof, mop sink, grease trap, ansul & fire exstinguisher. Can the owner charge for something that is attached to a leased building? My offer is $6500 for all equipment as a package deal not including non-detachable equipment.

By Chefmanny (Chefmanny) on Sunday, February 04, 2007 - 06:43 am: Edit

You definitely need to ask the owner of the "building" some of those are called "capital improvements" or some other term I don't recall now but, if it is part of the building or attached to the building it is the property of the landlord not the "business owner". It depends on the lease, you or the "business owner" have to read the lease and see what it says about it.
"DO NOT PAY ANY MONIES, until you find out you can buy it!!!!!

By Mr_Cook (Mr_Cook) on Wednesday, February 07, 2007 - 10:17 pm: Edit

Mac131,
If the truck is loaded with perishables, they are normally treated as "direct issues" and are added to the food cost or cost of sales as soon as they are received. Perishables then become part of the "food-in-process" which is not generally inventoried-which means you will not receive any offsetting credit for still having all of it. If the truck is loaded with non-perishables or "stores", they go into the storeroom inventory and are only added to the food cost/cost-of-sales when issued to the kitchen or production area. If the truckload is mixed, the story is still the same obviously. You decide and classify what is a perishable and what is a non-perishable and many interesting factors can influence that process.

By Cookingfish (Cookingfish) on Sunday, March 25, 2007 - 08:18 pm: Edit

I don't understand the idea of changing the day you do inventory. It should be set in either 4 week segmants giving you 13 periods or monthly giving you 12 periods. This way you have numbers that can be compared against previous years and used to forecast the upcoming year. As far as food cost goes, inventroy should be counted either after close on the last day of the "period" or before business the next day. Then only a midnight delivery would come in to play and it the delivery should either be posted and inventoried, or not posted and not inventoried. Just the rambling thoughts....