Know Your Food Cost ... Every Day ...
Without an Inventory
Are You On
Course?
How much better will you
sleep when you have a handle on all your most
critical costs ... all the time?
Effective management requires taking the right
actions at the right times for the right reasons ...
something you cannot do without accurate cost
information. Nowhere is this ability to act quickly more
critical for restaurateurs than in decisions concerning
food and beverage costs.
You simply cannot afford to wait until your
monthly financial statements come out - often 45 days
after the start of the accounting period - to learn these
critical numbers ... and now you don’t have
to.
C3 is a simple computer program that finally
gives you a quick and easy way to know your key cost
percentages ... every day ... without an inventory ...
usually within ½ of 1% of the actual number ... and it is
deceptively easy.
Each morning, it only takes one of your staff a
few minutes to enter the previous days’ invoices for
food, liquor beer and wine, along with sales in each of
those categories into C3. You already have the invoices
in a pile anyway and the sales figures are easy to pick
up. There is no real accounting or computer skill needed.
With one click of the mouse, you can quickly see if your
costs are in line ... or you will know if you need to
start asking questions. What could be easier?
How to Use Cash Control Compass to Keep
Yourself On Course
Compute Cost from
Purchases
In most foodservice operations, the dollar value of the
inventory changes very little from month to month ... because
there is simply not enough room to build up large stockpiles of
product.
Barring unusually large deliveries, after two
weeks, the value of food products purchased, divided by
the sales for those two weeks, will yield a food cost
percentage that is within ½ of 1% of the actual figure
... but without the need to take and extend physical
inventories ... except at the end of your accounting
periods.
C3 makes it quick and simple to calculate this
figure as a rolling average over any period of time you
choose. For food, we recommend a calculation that covers
at least the preceding 7-14 days and the preceding 28
days for food. Because beverage inventories tend to
represent more days' sales than does the food inventory,
take a look at the rolling average for the preceding 28
days.
Monitor the Number of Days’ Sales in
Inventory
Keeping inventory levels at a low, yet adequate level is a key
element to control your food and beverage costs. Problems like
over-portioning, spoilage, theft, excessive trim. waste and
general carelessness toward your costly products are common
when you allow inventory levels to get too high.
All operators take inventories sooner or later,
but most just use the figure to compute food cost
percentage ... and they miss out on a valuable tool. C3
will also tell you how many days’ worth of sales are
represented by your inventory figure. For example, if
your food cost was 33% and your average daily food sales
were $3000, you would use $1000 in food products each
day. If your inventory value was $10,000, you would have
ten days of sales in inventory.
Why would you want to know this? As the number
of days’ sales in inventory drops, food cost generally
decreases as well. Savvy operators always try to maintain
their inventories at the lowest possible level consistent
with the needs of the operation. This frees up cash,
assures fresher ingredients for their guests, reduces
pilferage opportunities and lowers overall food costs.
Some even use the number of days’ sales on hand every
week as part of the incentive program for their chefs and
ordering personnel.
What would it be worth to always know
your costs?
If this were an ad for MasterCard, the answer
would be "priceless" ... and that could well be the
answer here as well. Most people gladly pay $179
to gain this peace of mind ... but Gold Group
members can pick it up for just $129.
For perspective, one of the first people to use
the program discovered that he had been running over a
55% food cost for the past six weeks ... and he never
knew it. Using C3, in a matter of minutes he was able to
identify that he had a problem and started taking
corrective action.
Six weeks or more of financial bleeding! Do you
think it was worth $179 to find that out ... sooner
rather than later? Best of all, now he can keep tabs on
it every day and avoid any more unpleasant
surprises.
So what have you got to lose? Pick up a copy of
C3 and give it a test drive. I doubt that you will ever
want to let it go. As always, you must be totally
delighted or I will send you an immediate refund, no
questions asked. It doesn't get any easier than
that!
Click here to order Cost Control
Compass
|