Expert Advice on Hospitality Topics

Receiving: Ensuring That You Get What You Pay For

Posted by Nick Kaoukis on Tue, May, 24, 2011 @ 11:05 AM
Food PurchasingBy Douglas R. Brown
Atlantic Publishing


The goals of receiving are to ensure foods are fresh and JL safe when they enter your facility and you are receiving what you ordered and are paying for. Transfer items to proper storage as quickly as possible.

Let’s look more closely at two important parts of receiving:

  1. Getting ready to receive food.
  2. Inspecting the food when the delivery truck arrives.

Receiving Policy

Introduce a receiving policy. Remember, it's easy to "lose" products in this part of your operation. Let's say, for example, you have no one specifically assigned to check in orders. Normally one of your line cooks will do it. Let's also say that one day your order is late and arrives in the middle of lunch rush. No one can check the order for accuracy, so they just sign for it in a hurry. If this happens, it is virtually impossible to correct any mistakes at the time. Furthermore, if your line cooks don't get to put the order away until several hours later, you will lose product because it has sat out too long and is now unsafe to serve.

Receiving Tips

There are several important guidelines to keep in mind and tasks to complete as you get ready to receive food:

  • Calibration. Make sure all scales and thermometers are in place and calibrated.
  • Sanitary carts. Make sure your receiving area is equipped with sanitary carts for transporting goods.
  • Plan ahead for deliveries to ensure sufficient refriger­ator and freezer space.
  • Mark all items for storage with the date of arrival or the "use by" date.
  • Lighting. Keep the receiving area well lit and clean to discourage pests.
  • Remove empty containers and packing materials immediately to a separate trash area.
  • Keep all flooring clean of food particles and debris.
  • Delivery truck. When the delivery truck arrives, make sure it looks and smells clean and is equipped with the proper food-storage equipment. Then inspect foods immediately.
  • Check expiration dates of milk, eggs and other perishablegoods. Make sure shelf-life dates have not
  • Frozen foods. Make sure frozen foods are in airtight, moisture-proof wrappings.
  • Reject foods that have been thawed and refrozen. Look for signs of thawing and refreezing, such as large crystals, solid areas of ice or excessive ice in containers.
  • Rejecting canned goods. Reject cans that have any of the following: swollen sides or ends; flawed seals or seams; dents; or rust. Also reject any cans whose contents are foamy or smell bad.
  • Check the temperature of refrigerated and frozen foods, especially eggs and dairy products, fresh meat and fish and poultry products.
  • Look for content damage and insect infestations.
  • Rejecting dairy products. Reject dairy, bakery and other foods delivered in flats or crates that are dirty.
  • Weighing items. Meats, fish and most items ordered by the pound must be weighed and tagged. Food items purchased by count need to be checked and counted. All items received must be counted, weighed and date stamped. Don't deviate from this critical step.
  • Invoice accuracy. Check the accuracy of the invoice with regard to the purchase order, specifically price, damage, quality, quantity, brands, grades and variety. Items that are not correct need to be noted and returned before the driver leaves and the driver must sign the form. The vendor's invoice also should be checked against the actual purchase order.
  • Don't let delivery people into your storage areas.
  • Items packed in ice. These items need to be removed from the ice prior to weighing.
  • Check animal cavities in fish and poultry for ice.
  • Delivery personnel should be friendly, not rushed, and professional, but not too friendly.   Ensure they know that it doesn't matter if they are in a rush; you are going to check everything in and count and weigh everything prior to their leaving.
  • All food products must be date coded, rotated and put away immediately.
  • Placed in order. Products should be placed on the shelves in the same order as the inventory sheets and purchase order forms. This will help in inventory counting and control.
  • Determine which employees are allowed to access the storage areas. Storage areas are prime targets for theft. Not only employee theft, but if areas aren't kept locked and secure, outside people will be able to get in and help themselves to your products.
  • Garbage can liners. In the kitchen, consider using clear trash bag liners as another method to deter pilferage.
  • Keep your back door locked, well lit and on an alarm system. A small viewing panel or glass with a wire-enforced panel will enable the receiving employee to see who is at the back door.

Topics: food inventory, receiving inventory, food inventory control

Effective Inventory Control System is an Integral Part of Purchasing

Posted by Nick Kaoukis on Wed, May, 18, 2011 @ 08:05 AM
Purchasing IdeasBy Douglas R. Brown
Atlantic Publishing

Part 3: Purchasing Ideas

There are many ways to curb cost. Here are a few ideas:

  • Inexpensive fish. Turn your customers on to seafood alternatives and lower your food cost. Consider using some alternatives such as Tilapia, farm-raised salmon, fresh-water perch, Alaskan halibut, mahi-mahi, shark or skate. Skate, for example, can be purchased wholesale right now online for $1.62 per pound. The secret, of course, is to make certain it is fresh.
  • Shelled eggs. Consider buying shelled eggs if your restaurant uses more than three cases of eggs per week. This will reduce the amount of cardboard and other packaging that must be disposed or recycled. Shelled eggs are often packaged in 5-gallon buckets that can later be reused for cleaning or maintenance.
  • Condiments. Use refillable condiment dispensers instead of individual condiment packets for dine-in customers.
  • Cost-Watch Web site. This site,, helps restaurant management control labor, utility and food and beverage costs. It also offers regional reports to compare expenses and food costs in similar restaurants as well as price trend forecasts. It is a great resource for purchasing managers.
  • Join a barter club. Bartering allows you to buy what you need and pay for it with otherwise unsold products, such as food and beverages or even catering services. Almost anything and everything can be purchased with barter services. Nationally, over 250,000 businesses are involved in barter. Check out these Web pages:
  • Similar ingredients. Include menu items that are essentially made with similar ingredients as others on the menu. For example, a shrimp cocktail and shrimp pasta are two very different meals, but the ingredients are similar. These ingredients are simple, inexpensive and don't take up a lot of storage space. Having five or six other pasta sauces to offer also loads up your menu with choices without excessively increasing your inventory. This will not only allow you to buy in bulk and keep costs down, but will also lighten the load on your kitchen staff.
  • Bread baskets. The potential for waste in bread baskets is large. Most of these come back from the table partially eaten at best. You may want to consider giving bread baskets only if requested or you may want to cut down on the amount served. You should also consider including packaged items since these can be reused. Some operators are now serving bread only by request or they are serving one roll or breadstick at a time from a breadbasket with tongs.
  • Substitute premade items. Substitute premade items for some items you have been making from scratch. You don't have to sacrifice quality to do this; many premade items are good. You can also start with a premade item and add ingredients. For instance, you can buy a premade salad dressing and add blue cheese or fresh herbs. Using these items will lower your food and labor costs, and you can still put out a quality item.


Topics: inventory managers, Hotel Inventory, Restaurant Inventory, food inventory, inventory schedule, inventory counting, purchasing, inventory control, Food control

An Effective Inventory Control System is an Integral Part of the Purchasing Procedure

Posted by Nick Kaoukis on Fri, May, 13, 2011 @ 11:05 AM
By Douglas R. Brown
Atlantic Publishing

Part 2: Perpetual Inventory

The perpetual inventory is a check on the daily usage of your main entree items from the freezers and walk-ins. This is for tracking expensive items, such as meat, seafood, chicken, cans of caviar, etc. When completed, the perpetual inventory will ensure that no bulk products have been pilfered from the freezer or walk- ins. Computer software programs and some POS systems will track this information for you. The following is an example of a Perpetual Order Form:

perpetual inventory resized 600

  • List all the food items that are listed on the Sign-out Sheet and Yield Form. In the "Size" column, list the unit size in which the item is packaged. The contents of most cases of food are packed in units such as 5-pound boxes or 2-pound bags. Meat is usually packed by the number of pieces in a case and the case's weight. The size listed on the perpetual inventory must correspond to the size the preparation cooks are signing out of the freezer and walk-ins.
  • In the "Item" column, enter the number of each item listed. For example, if shrimp is packed in 5-pound boxes and you have two 50-pound cases, there are 20 boxes. Enter 20 in the "Item" column. Each number along the top corresponds to each day of the month. At the end of each day, count all the items on hand and enter this figure on the "=" line. Compare this figure to the "Amount Ordered or Defrosted" column on the Preparation Sheet; these amounts must be the same as the total number of each item on the "-" line. If there were any deliveries, place this total on the "+" line.
  • Theft. Theft can occur when someone removes a box of shrimp from the case, for example. The person then reseals the case with the other boxes to hide the gap.
  • Check the invoices every day for the items delivered that are in your perpetual inventory. Ensure that all items signed off as being delivered are actually in the storage areas. Should there be a discrepancy, check with the employee that signed the invoice. The number of items you start with (20) plus the number you received in deliveries (5), minus the amount signed out by the preparation cooks (1), must equal the number on hand (24). If there is a discrepancy, you may have a thief.
  • What to do if you suspect theft. Should you suspect a theft in the restaurant, record the names of all employees who worked that particular day. If thefts continue to occur, a pattern may develop among the employees who were working on all the days in question. Compute the perpetual inventory or other controls you are having a problem with at different times of the day and before and after each shift. This will pinpoint the area and shift in which the theft is occurring. Sometimes, placing a notice to all employees that you are aware of a theft problem in the restaurant will resolve the problem. Make it clear that any employee caught stealing will be terminated.

Purchasing Kickbacks and Gifts

Unfortunately, the food service industry is notorious for kickbacks. It is even more unfortunate that these kickbacks or gifts are essentially paid for by you in the form of higher prices. Here are some ideas to help keep kickbacks out of your store:

  • Purchasing and receiving must be done by different employees. The person ordering should not be the same person receiving and checking the items.
  • Kickback policy. Develop a general policy and list it in your employee handbook that employees cannot receive anything for free from a vendor or potential vendor.
  • Change positions. People become complacent over time; move positions around.
  • Check on prices of expensive items like meat and seafood yourself.

Topics: inventory managers, Food Costs, food inventory, inventory counting, controling costs, inventory control, Food control

An Effective Inventory Control System is an Integral Part of the Purchasing Procedure

Posted by Nick Kaoukis on Mon, May, 09, 2011 @ 10:05 AM
By Douglas R. Brown
Atlantic Publishing

Part 1: Inventory, Storage and Accounts Payablefood storage shelves

Ordering effectively is impossible unless you are completely familiar with the inventory items. Prior to orders being placed with vendors, counts of stock need to be established. Software programs are able to determine order quantities based upon par balances and sale figures; we highly recommend this implementation. Whether your ordering system is performed with a pencil and paper or by computer, its purpose is to:

  1. Provide reports of what is needed.
  2. Provide reports the specified products.
  3. Provide reports of vendors and contact information.
  4. Provide reports of prices.
  5. Provide a historical report of prices.
  6. Provide a method for the ease of order placement.

Keeps these critical points about inventory in mind:

  • Inventory amounts. The more you have in inventory, the harder it is to control.
  • Shelf life for perishables. Meat, produce and seafood will only last 2-3 days, so do not order too much of these products at a time.
  • Excessive inventory. It ties up your cash, hindering cash flow.
  • Extra food. Having extra food on hand tends to lead to over-portioning and is easier for theft.
  • Inventory turnover. Ideally, the entire food inventory should be turned every 5-8 days.
  • Vendors. Schedule vendor representatives visits so you are not interrupted.
  • Standing orders. Consider placing standing orders for regularly used items.
  • Consider using one "main vendor." If you receive most of your product from one vendor, you will spend much less time on purchasing, there will be fewer salespeople to deal with, there will be fewer deliveries each week and labor costs will be saved. You also will receive better service. As previously mentioned, most large vendors today have online ordering systems.
  • Check trade magazines and for rebates available from manufacturers.
  • Join a buying group such as the one at They have pre-negotiated man­ufacturer allowances available on over 10,000 food and food-related products from over 125 network suppliers from manufacturers like Sweetheart, Ecolab, Sara Lee and General Mills.
  • Warehouse buying clubs. Check out warehouse buying clubs such as Sam's Club,, Costco, and Restaurant Depot, www. restaurantdepot. com.
  • Cash discounts. Many purveyors provide cash discounts if payment is made early, such as "2/10, net 30." With this, a 2-percent discount may be taken if payment is made within 10 days. Cash discounts are worth taking; a restaurant that purchases $500,000 per year and takes a 2-percent discount will save $10,000.
  • Alternatives. Don't automatically use fresh fruit and vegetables if canned alternatives can be used without cutting back on meal quality. Canned tomatoes, artichoke hearts, chili peppers, pears, etc., can all be used in many meals without a big loss in flavor, and the trade off is a big drop in price and spoilage rates.

Topics: food inventory, Food Storage, Food control

Controlling Food Inventory to Generate Maximum Profits

Posted by Nick Kaoukis on Thu, May, 05, 2011 @ 11:05 AM
Placing Food OrdersBy Douglas R. Brown
Atlantic Publishing

Part 6: Purchasing and Ordering--Procedures and Practices

Purchasing and Inventory Software

Purchasing and inventory software is readily available to restaurant operators. Many larger organizations are using inventory control software that saves a significant amount of time and money. Most managers are used to the monthly grind, standing in the walk-ins counting eggs, butter pats and frozen chickens. With inventory control software, managers can use a laser scanner, similar to the ones used in grocery stores, to scan bar codes. The software can also be linked to your distributors and you can place your orders electronically based on the inventory. 

  • Consider placing your orders online. Almost all distributors now have systems in place to order online. The advantages are numerous: it reduces ordering errors, it's convenient, there may be discounts, and most systems build a customer database based on what you have previously ordered making re-orders easy. A list of vendor Web sites follows:
  • Use written purchase orders (PO). A PO is a written authorization for a vendor to supply goods or services at a specified price over a specified time period. Acceptance of the PO constitutes a purchase contract and is legally binding on all parties. Utilizing POs will enable you to know what was ordered, the quantity, and the price. If you are using software to record the invoice and receipt of inventory, the program will restock and adjust pricing automatically. In addition, your perpetual inventory will be updated. Purchase orders from software programs can easily be faxed or e-mailed into the vendor, saving time and money.
  • When purchasing food, avoid more expensive name brands wherever possible. Of course, you want to make sure you're buying quality ingredients for your food, but are your customers really likely to tell the difference between a "name brand" and an "industrial brand"?
  • Local growers. Talk to local fresh-produce suppliers to see if you can't get fresher, cheaper, better-quality fresh produce direct from the grower. Why pay a supplier to get the fruit and vegetables that are shipped to their central warehouse, then shipped back to you, when you can just drive 10 minutes down the road and enjoy food right off the tree or vine? You can also use this as a promotional device. If you use local produce, let your customers know!
  • Cooperative purchasing. Many restaurants have formed cooperative purchasing groups to increase their purchasing power. The cooperatives purchase items that are commonly used by all food service operators. By joining together to place large orders, restaurants can usually get substantial price reductions. Some organizations even purchase their own trucks and warehouses and hire personnel to pick up deliveries. This can be advantageous for restaurants that are in the proximity of a major supplier or shipping center. Many items, such as produce, dairy products, seafood and meat, may be purchased this way. Chain restaurants have a centralized purchasing department and, often, large self-distribution centers.
  • Make sure you shop for purveyors. Don't rest once you've found one. Comparison shop on a continual basis.
  • Look at vendors' product labels for box strength. This will tell you where the product came from. Most manufacturers won't ship more than 100 miles away from their plants. The further away that a supplier is located, the more shipping will cost.
  • Consider planting your own herb and/or vegetable garden. Great food starts with using the freshest herbs and vegetables and the best way to do that is to grow them yourself! The techniques for growing your own are not difficult. With a little planning, you can build your own 24-hour supply of garden-fresh herbs. Even a small garden can infuse your kitchen with heavenly aromas and striking flavor. What a great way to lower your food cost and separate yourself from the competition! You can buy seeds online at:


Topics: Food Costs, profit, food inventory, purchasing

Controlling Food Inventory to Generate Maximum Profits

Posted by Nick Kaoukis on Fri, Apr, 29, 2011 @ 10:04 AM
By Douglas R. Brown
Atlantic Publishing

Part 5: Purchasing and Ordering--Procedures and Practices

Purchasing and Orderingfood purchasing

What exactly is the difference? Purchasing is setting the policy on which suppliers, brands, grades and varieties of products will be ordered. These are your standardized purchase specifications; the specifics of how items are delivered, paid for and returned. These specifications are negotiated between management and distributors. Basically, purchasing is what you order and from whom. Ordering, then, is simply the act of contacting the suppliers and notifying them of the quantity you require. This is a simpler, lower-level task. Here are the basics:

  • Develop a purchasing program. Once menus have been created that meet your customers' satisfaction and your profit needs, develop a purchasing program that ensures your profit margins.
  • An efficient purchasing program incorporates: Standard purchase specifications based on standard­ized recipes, and standardized yields and portion control that allow for accurate costs based on portions actually served.
  • Keep in mind: Purchasing more than you need usually results in poor portioning, excess spoilage, waste and theft. Not buying enough can mean paying retail prices, or using a more expensive substitute.
  • Purchasing procedures. These procedures should include creating written purchasing specifications for every product and selecting good, reliable purveyors. Your purchasing procedures should do three things:
  1. Allow you to purchase the required items at prices that meet your food cost goals.
  2. Maintain control over your existing inventory.
  3. Establish a set of procedures to be sure that you receive quality product at the best price.
  • Purchasing responsibility. Either take on the purchasing yourself or assign a specific employee to do it. Make sure that this person keeps current with ever-changing food prices.
  • Price checks for different vendors. Sometimes you may find that one vendor is less expensive than another for a while, and then this may shift. Keep current with competing vendors' prices.

Purchasing Specifications

By creating purchasing specifications, you can control which items you purchase and you can maintain product consistency. This information is extremely important if you have more than one person that does ordering in your operation. You need to record the following basic information:

  • Purchasing specifications. They state the exact requirements for the amount and quality of items purchased. These specifications should include:
    1. Product name
    2. Quantity to be purchased (designated with correct unit such as pounds, can size, etc.)
    3. Indication of grade, if applicable
    4. Unit by which prices are quoted
    5. What the product will be used to produce
  • Meats. Meats should be inspected by the USDA or
    other appropriate agency. The parts or packaging
    should carry a federal or state inspection stamp.
  • Eggs. Eggs should have a USDA grade; frozen and
    dried eggs should be pasteurized.
  • Shellfish. Shellfish should be purchased from
    suppliers that appear on public health service Food
    and Drug Administration lists of Certified Shellfish
    Shippers or on lists of state-approved sources. The
    control tags must be available if live shellfish are
  • Introduce a record sheet. Make it readily available for all your employees. They need to be sure that they're ordering the correct items in the correct amounts. You're also more likely to attain your desired food cost by keeping these records and maintaining purchasing controls. Keeping your food cost down will help you to maximize profits from your menu prices. The following form illustrates an example of a purchasing specification form:

Purchasing Specification Form



This article is an excerpt from the Food Service Professional Guide to Controlling Restaurant & Food Service Food Costs, authored by Douglas R. Brown, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company

Topics: inventory, Restaurant Inventory, food inventory, Control, Hospitality, inventory schedule, inventory counting, controling costs, purchasing, inventory control

Controlling Food Inventory to Generate Maximum Profits

Posted by Nick Kaoukis on Wed, Apr, 27, 2011 @ 10:04 AM
By Douglas R. Brown
Atlantic Publishing

Part 4: Purchasing BasicsPurchasing Power

The goal of purchasing is to obtain wholesome, safe foods to meet your menu requirements. The operation must have food to serve customers when needed. The food needs to be the right quality consistent with the operation's standards and purchased at the lowest possible cost.

  • Vendors and food safety. Food safety at this step is primarily the responsibility of your vendors. It's your job to choose your vendors wisely.
  • Suppliers must meet federal and state health standards. They should use the HACCP system in their operations and train their employees in sanitation.
  • Delivery trucks. Delivery trucks should have adequate refrigeration and freezer units, and foods should be packaged in protective, leak-proof, durable packaging. Let vendors know upfront what you expect from them. Put food-safety standards in your purchase specification agreements. Ask to see their most recent board of health sanitation reports, and tell them you will be inspecting trucks on a quarterly basis.
  • Delivery schedules. Good vendors will cooperate with your inspections and should adjust their delivery schedules to avoid your busy periods so that incoming foods can be received and inspected properly.
  • Your inventory system is the critical component of purchasing. Before placing an order with a supplier, you need to know what you have on hand and how much will be used. Allow for a cushion of inventory so you won't run out between deliveries. Once purchasing has been standardized, the manager simply orders from your suppliers. Records show supplier, prices, unit of purchase, product specifications, etc. This information needs to be kept on paper and preferably computerized. Purchase food items according to usage. For example, if you plan to use tomatoes by blending and mixing them with other ingredients to make a sauce, purchase broken tomatoes as opposed to whole tomatoes. However, if you intend to use tomatoes to decorate a dinner plate or as a topping, opt for high-quality produce, such as baby plum vine-grown tomatoes.


This article is an excerpt from the Food Service Professional Guide to Controlling Restaurant & Food Service Food Costs, authored by Douglas R. Brown, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company

Topics: inventory managers, Hotel Inventory, Restaurant Inventory, food inventory, Control, inventory schedule, inventory counting, controling costs, inventory control

Controlling Food Inventory to Generate Maximum Profits

Posted by Nick Kaoukis on Wed, Apr, 20, 2011 @ 14:04 PM
By Douglas R. Brown
Atlantic Publishing

Part 3: Controlling Inventory LevelsFood Inventory

The first step in computing what item to order and how much you need is to determine the inventory level, or the amount needed on hand at all times. This is a simple procedure, but it requires order sheets. To determine the amount you need to order, you must first know the amount you have in inventory. Walk through the storage areas and mark in the "On Hand" column the amounts that are there. To determine the "Build to Amount," you will need to know when regularly scheduled deliveries arrive for that item and the amount used in the period between deliveries. Add on about 15 percent to the average amount used; this will cover unexpected usage, a late delivery or a backorder from the vendor. The amount you need to order is the difference between the "Build to Amount" and the amount "On Hand." Experience and food demand will reveal the amount an average order should contain. By purchasing too little, the restaurant may run out of supplies before the next delivery. Ordering too much will result in tying up money and putting a drain on the restaurant's cash flow. Buying up items in large amounts can save money, but you must consider the cash-flow costs.

  • A buying schedule should be set up and adhered to. This would consist of a calendar showing:

               -Which day's orders need to be placed.

               -When deliveries will be arriving.

               -What items will be arriving from which company.

               -Phone numbers of sales representatives to contact for each company.

               -The price the sales representative quoted.

  • Post the buying schedule on the office wall. When a delivery doesn't arrive as scheduled, the buyer should place a phone call to the salesperson or company immediately. Don't wait until the end of the day when offices are closed.
  • A Want Sheet may be placed on a clipboard in the kitchen. This sheet is made available for employees to write in any items they may need to do their jobs more efficiently. This is a very effective form of com­ munication; employees should be encouraged to use it. The buyer should consult this sheet every day. A request might be as simple as a commercial-grade carrot peeler. If, for example, the last one broke and the preparation staff has been using the back of a knife instead, the small investment could save you from an increase in labor and food costs. 



This article is an excerpt from the Food Service Professional Guide to Controlling Restaurant & Food Service Food Costs, authored by Douglas R. Brown, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company

Topics: inventory, Food Costs, food inventory

Controlling Food Inventory to Generate Maximum Profits

Posted by Nick Kaoukis on Mon, Apr, 18, 2011 @ 09:04 AM
By Douglas R. Brown
Atlantic Publishing

Part 2: Reconciling at Every StepReconciling Inventory

The key to controlling food cost is reconciliation. Every X step or action in the cost-control process is checked and reconciled with another person. Once these systems are set up, management's responsibility is to monitor them with daily involvement. Should all the steps and procedures be adhered to, you will know exactly where every dollar and ounce of food went; there are no loopholes.

  • Teach them. Management must be involved in the training and supervision of all employees. For any cost-control system to work, employees must be trained and know what actions are expected of them. It is management's responsibility to supervise employees and see that they receive this training.
  • Communicate. Daily involvement and communica­ tion is needed in order to succeed. Employees must follow all procedures precisely. If they do not, they must be informed of their specific deviations from these procedures and correct them. This is a daily task that involves a hands-on management style.
  • Enforce. Any control initiated is only as good as the manager who follows up and enforces it. The total amount of time a manager needs to complete all of the work that will be described in this section is less than one hour a day. There is no excuse for not completing each procedure every day. A deviation in your controls or involvement can only lead to a loss over the control of the restaurant's costs.
  • Tracking. Although a simple manual system is detailed here, many of your cost-control procedures can be tracked through your computerized accounting system and/or POS system. Many of the basic purchasing and receiving functions are found in virtually all off-the-shelf accounting programs. 

75 Possible Food-Cost Problem Areas

1.  No balance of high- and low-cost items on the menu.

2.  No consideration of locally obtainable products.

3.  No competitive purchasing plan.

4.  Theft in any form.

5.  Purchasing more than needed (spoilage).

6.  No daily check of invoices, quality and prices.

7.  Improper rotation procedures.

8.  Too many items on the menu.

9.  Not enough low price - high food- cost percentage items on the menu.

10. No perpetual inventory in place.

I I. No controls on issuing items from storage areas.

12. Low yields on products.

13. Over-preparing (waste, spoilage).

14. Approving invoices without checking deliveries and following procedures.

15. Not using or following exact standardized recipes.

16. Not following exact portion sizes.

17. Improper handling (wrapping, rotating, storing).

18. No reconciliation of food sold vs. food consumed.

19. Employee pilferage including snacking on food items.

20. Orders not correctly received.

21. Frozen food not rotated.

22. Negative relationships with suppliers.

23. Freezer doors not closed properly.

24. Dry foods not stored properly allowing spoilage and bug infestation.

25. Not implementing a HACCP program.

26. Freezers and walk-ins located too close to back door, convenient for theft.

27. The manager not occasionally checking the dumpster and garbage cans at an unexpected time.

28. Use clear plastic containers in the kitchen to collect "waste." Each kitchen staffer should get his or her own container. Garbage cans are too easy to throw "waste" into.

29. Credit not received from vendor for returned merchandise.

30. Chemicals stored next to food causing possible poisoning.

31. Dry food areas are not well organized causing over-ordering.

32. Frozen-food area is not well organized causing over-ordering.

33. Perishable items left out of refrig­ erated area.

34. Food used in the bar and recorded in bar sales.

35. Failure to raise prices when food costs increase.

36. Food purchased at cost for personal use.

37. No reconciling of kitchen checks and guest checks.

38. Hors d'oeuvres that were given free to bar patrons.
39. No guest check rung up for house, complimentary or manager food.
40. Over-consumption - not portioning salad dressings.

41. Opened containers not properly sealed developing spoilage because of air flow.

42. Frozen products stored too close together.

43. Rusty and/or dirty shelving.

44. Supply room doors not locked.

45. Reprocessing of previously paid invoices for payment.

46. Poor paperwork and use of control forms.

47. Poorly trained employees.

48. Cooking equipment temperatures not regularly calibrated.

49. Scales not regularly calibrated or replaced.

50. Over-production.

51 .The staff deliberately creating mistakes so they can consume them.

52. Burned or overcooked food due to poor training.

53. Not weighing portions.

54. Cold food being returned by customers.

55. Incorrect garnishing procedures.

56. Incorrect addition or totaling on guest checks.

57. Not portioning margarine and butter.

58. Food being discounted or not reordered on a ticket.

59. Not removing all contents from cans and bottles.

60. Resetting or "Z"-ing cash register readings.

61. Spoilage due to incorrect thawing procedures.

62. Equipment used in food preparation not scraped of excess food prior to washing.

63. Not using standardized recipes.

64. Discarding unopened food containers which could be recycled.

65. Not charging for coffee, tea, sodas, etc.

66. NSF checks and invalid credit cards being accepted.

67. Brewing too much coffee, ice tea or tea.

68. Prepared food dropped on the floor.

69. Failure to take discounts offered for early payment from vendors.

70. No control system in place for guest tickets.

71. No control of after-dinner mints.

72. Servers receiving food from kitchen without recording sales.

73. Dull knives.

74. Fake company invoices being sent for payment.

75. Rotation and color-coded, day- dated labels not used.



This article is an excerpt from the Food Service Professional Guide to Controlling Restaurant & Food Service Food Costs, authored by Douglas R. Brown, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company

Topics: Restaurant Inventory, food inventory, purchasing, inventory control

Controlling Food Inventory to Generate Maximum Profits

Posted by Nick Kaoukis on Mon, Apr, 04, 2011 @ 20:04 PM
By Douglas R. Brown
Atlantic Publishing

Part 1: Tips on Establishing an Airtight Food Cost-Control System

The BasicsRestaurant Inventory Costs

Controlling food cost is basically about two concepts: First, ensuring that all food and revenue is accounted for and utilized in the most efficient manner. Second, ensuring that every ounce of food purchased is sold at the maximum allowable price. The following sections will present a system of cost controls. Combining these controls with basic procedures and policies will enable you to establish an airtight food cost-control system.

Getting Organized

Organization is the easiest and cheapest manner of generating productivity and reducing food costs. The mere act of putting instructions on paper or giving your staff a checklist, instead of having to hold their hand through a process, can save your company thousands.

  • Organizational and structure component charts. Use organizational charts to know and understand who does what in your restaurant on a daily, weekly and monthly basis. How can this structure improve? Are jobs allocated in the most productive manner possible? Written job descriptions are good tools to use for this. (You can find examples of job descrip­tions and a questionnaire for writing job descriptions at Atlantic Publishing offers a complete set of restaurant job descriptions on computer disk at
  • Use checklists for yourself. Create a checklist of items you perform every day and organize your time. Of course, variations from this checklist will always occur, but you will cover the basics a lot faster with a guide in hand. This will save you and your staff time and confusion.

What Does Your Food-Cost Percentage Really Mean?

Johnny's steak house has a food cost of 38 percent; Sally's steak house has a food cost of 44 percent. Which is a more efficient operator? Which is more profitable? Your restaurant has a food cost in January of 38 percent; in February it is 32 percent. Did you operate more efficiently the second month? The answer to these questions is: we just don't know. There is not enough information to determine this from the figures; we need to know what the food-cost percentage should have been as well.

  • Importance of food-cost percentages. Don't become overly concerned over food cost percentages, they are truly meaningless unless you know what your food-cost percentage should be for the given time in question. Remember, you get paid in and deposit dollars into the bank, not percentages.
  • Weighted food-cost percentage. Once your food cost is calculated, you must determine your weighted food-cost percentage. A weighted food cost percentage will tell you what your food cost should have been over a given period of time if all procedures and controls in place operated at 100- percent efficiency. We will show you how to determine a weighted food cost in a later article.

Food Cost-Controls--Get it Right

In order to control food costs, you must first know what your costs are. Accurate record keeping is essential in implementing a cost-control system.

  • Controlling large operations. The larger the distance between an owner or manager and the actual restaurant, the greater the need for effective cost-control records. This is how franchisers of restaurant chains keep their eyes on thousands of units across the world.
  • Give managers information. Many managers of individual operations assume that since they're on the premises during operating hours, a detailed system of cost control is unnecessary. Tiny family operations often see controls the same way and view any device for theft prevention as a sign of distrust towards their staff. This is shortsighted because the main purpose of cost control is to provide information to management about daily operations.
  • Theft prevention. Prevention of theft is a secondary function. Cost controls are about knowing where you are going. Furthermore, most waste and inefficien­cies cannot be seen; they need to be understood through the numbers.
  • Definitions. You must be able to understand the numbers related to food cost and be able to interpret them. To do this effectively, you need to understand the difference between control and reduction:
  1. Control is achieved through the assembly and interpretation of data and ratios on your revenue and expenses.
  2. Reduction is the actual action taken to bring costs within your predetermined standards. Effective cost control starts at the top of an organization. Management must establish, support and enforce its standards and procedures.

Get Computerized

No matter what type or size of food service operation you run, our advice is to get your operation computerized. It's extremely difficult to compete successfully without utilizing technology, at least to some degree. Today the investment for a basic computer and accounting software is less than $2,000 and could be as little as $1,000. The investment will deliver immediate savings in accounting fees and your ability to get true insight into your business.

  • Utilize the same chart of accounts to compare your operation with others. Ratios enable you to compare the operating data of a specific hotel or restaurant to the average for a group of similar establishments. You may, for example, compare the food cost and food sales of a particular restaurant with the average sales and costs of restaurants of a similar size.
  • Operations report. The National Restaurant Association publishes a report entitled 'The Operations Report," an annual survey based on operator income statements that is conducted jointly by the association and the accounting firm of Deloitte & Touche. The report provides detailed data on where the restaurant dollar comes from and where it goes for four categories of restaurants: three types of full-service operations (with per-person check sizes under $10; between $10 and $25; and $25 and more) and limited-service operations (fast food). You can use this report to compare your operation to others.
  • Four-week accounting period. Companies typically close their books and prepare financial statements at the end of each month. The problem for retail businesses such as restaurants is that there are uneven numbers of days and uneven numbers of the type of days in a month. For example, you may have an extra Saturday in a month which would skew sales numbers upwards. Consider using a four-week accounting period so you can compare apples to apples.
  • POS (point-of-sale) systems are crucial for reducing loss. The most widely used technology in the food service industry is the touch-screen. The POS system is basically an offshoot of the electronic cash register. Touch-screen POS systems were introduced to the food service industry in the mid-1980s and have penetrated 90 percent of restaurants nationwide. (See Chapter 9 for more information on POS systems.) 


This article is an excerpt from the Food Service Professional Guide to Controlling Restaurant & Food Service Food Costs, authored by Douglas R. Brown, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

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Topics: Restaurant Inventory, Food Costs, food inventory