|Because of Food Cost’s relative importance as an expense item, keeping it in budget is of utmost importance. This is especially true when one considers the fact that catching-up negative budget variance in this expense item is very difficult and has a negative effect on the value the customer receives.
To ensure that Food Cost is in budget each month the following procedures must be followed:
- Whenever the accounting department advises that food cost is over budget for two consecutive weeks, immediately do a physical food inventory that weekend and again at month end.
- Whenever monthly food cost is three percentage points over budget the food inventory must be done semi-monthly for two months.
These inventories should allow you to clearly see what food items are causing the unexpectedly high food cost. Additional items to check when food cost is high are:
- Purchasing procedures
- Receiving procedures
- Methods of storage
- Issuing procedures
- Preparation methods
- Cooking methods
- Portion control
- Menu costing
- Food check pricing and control
All of these can have a dramatic impact on food cost and therefore all must be closely monitored so as not to deteriorate any benefit derived from superior practices in any one area. Should you have any questions contact your Supervisor.
Also refer to: Complimentary Continental Breakfast Purchasing