Look to Descending Reports to Cut Costs

 In 5. Fred Langley, Food Costs

For the greatest impact on your bottom line, we always encourage working from descending dollar and descending case reports when tracking food items.

To start, tracking the food items with your accounting system is unreliable and illogical. Instead, look to the descending dollar report from your vendor or distributor for the most detailed and accurate reporting.

What does a descending dollar report offer? It ranks what you buy based on where you spend the most money. Simply focus on using less of what you spend the most on and negotiate better prices on the things where you spend the most money.

OK, so we covered descending dollar report, now let’s talk about the impact a descending case report can have on your business. This report ranks the things you have purchased by the volume you purchase them rather than by the dollar.

For example, you may buy 50 bags of flour and 10 cases of filet. On the descending dollar report, filet would rank higher than flour, but on the descending case report, flour would rank higher than filet.

This report can help track usage in your restaurant. First, run an item-by-item sales mix report from your POS with a timeframe of at least a month and identify your ideal use of the product. Next, calculate your beginning inventory, add purchases and subtract ending inventory to get your actual use of the product.

This process will in fact show you how much product you wasted. This is very powerful in determining where to focus your attention regarding portioning in your restaurant.

Once you get your portioning under control, the descending case report is still very useful. You can link your sales to your past usage. For example, if your descending case report tells you that you purchased 30 cases of tomatoes over a period that you sold $30,000 in food, you now have a basis of usage. In this case you use one case of tomatoes per $1,000 in sales.

Based on this information if I have a $6,000 weekend forecasted, I know I need to purchase six cases of tomatoes. This process can be done for every item and you can generate orders by simply plugging in your forecasted sales.

So, if you get anything from this article, make sure you get on the phone and request both a descending dollar and a descending case report from your main distributor. The information is within your grasp and could mean a lot to your business.

And of course we can help you, too, here at TheRestaurantExpert.com.

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