Expert Advice on Hospitality Topics

Loss Prevention: Don't Let Bartenders Rob You Blind

Posted by Nick Kaoukis on Tue, Sep, 25, 2012 @ 12:09 PM

By Bob Johnson

Part 1 of 2: Do Bartenders Steal?

bartender theftDo bartenders steal?  I've worked with some outstanding bartenders over the years, men and women who are honest, hard-working, team/family-oriented and loyal. I'd like to think all bartenders are like that, but according to some, I'm misguided.

Joe Motzi of Entrepreneur Consultants in New York wrote an article on the subject for Restaurant Hospitality magazine, in which he said: "The theft is incredible! In the past three years we ran across only one bartender who wasn't stealing from his employer. That's out of about 1,000 clients! Only one bartender went by the rules of the house!"

Employee Service Reports in Fort Myers, Florida, a surveillance service to restaurants and lounges since 1950, reports that more than 50 percent of bartenders surveyed are not recording sales. That's a polite word for stealing. After weeding out the undesirable employees, the theft problem goes away - at least until after the new hires are comfortable with taking advantage of management.

A Michigan bar owner I know fired her last nine bartenders for stealing - in just one year. The owner of the Au Main bar in New York City has filed a $5 million lawsuit against 12 former bartenders and his chief financial officer for "working together (collusion) against the house, not recording drink sales and splitting the money amongst them for the past 8 years". The CFO changed the numbers in the books to cover up the missing inventory.

The temptation for a bartender to steal, and the ease of doing it, is scary. Receiving cash each time you sell a drink creates the temptation to keep the money (is anyone watching?). The drink sale is simply not rung up. The money for the drink goes straight into the cash register drawer by hitting "00" (No Sale), or they work out of an open drawer. They keep track of how much they are "over" by using a type of abacus system - 3 match sticks in a nearby empty glass equals $30, or a black sneaker mark on the floor equals $20 (3 black marks and they're up about $60).

The bartender takes the "over" out of the cash register drawer before turning in their money. Selling a cup of coffee or a "virgin" daiquiri (non-alcoholic) increases the temptation for bartenders or servers to take that money, too. Most bars do not inventory non-alcoholic type drinks, and most do not require their bartenders/servers to issue a receipt for each sale.

blurb

While taking from you, there's a good chance they're also cheating your customers. Your bar might feature "tooters", which are 24 shots of liquor served in a one-ounce tube. The bartender is supposed to sell them for a buck apiece, but decides to charge the customer $2 - and pockets $24 at the customer's expense. Of course, the house gets hurt when the customer discovers the scam.

The theft process starts when first hired. The bad bartender usually looks for areas where management is lax. They run little "spot tests" - seeing what will work and what won't. Once it's established what works it's full steam ahead.

Another type is the overt thief - one who steals openly, thinking no one, including the customer, realizes what he or she is doing. Professional spotters describe this type of bartender theft as "wide open". These people fear no one - customer or management.

This is reason enough to use professional surveillance companies, or spotters, routinely. Spotters are hired to watch for, and report, any act of theft by a bartender, waitress, manager, or any employee working on the premises.

However, there can be problems with spotters. Many don't understand a bartender's organization, motion, or actual transactions. Many are also "minimum wage plus expenses" employees of a local security company and have never tended a bar before. The best spotter is one who has bar experience and can detect a discrepancy in another bartender's work routines.

 

Bob Johnson is a nationally recognized Beverage Management consultant who specializes in multi-unit management of nightclubs/bars and bartending. He is a 50 year veteran of the bar business and is known for creating America’s first certification program for bar managers, “CBM” (Certified Bar Manager). Mr. Johnson has taught at Florida International University in Miami, Florida, serving as Professor of Beverage Management.

Mr. Johnson can be contacted at:

Website: BobTheBarGuy.com

Email: bjbarhop@aol.com

Tel: (800) 447-4384

Topics: liquor inventory, inventory managers, Bar inventory, bar inventory levels, bar efficiency, NightClub Management, managing liquor inventory cost, Bar Management, Nightclub Consulting, Loss prevention, bar control, inventory counting, inventory control

Safeguard Bar Profits: Introduce Basic Theft-Reduction Procedures

Posted by John Cammalleri on Mon, Oct, 03, 2011 @ 11:10 AM
By Elizabeth Godsmark
Atlantic Publishing
 

 

Safeguard Liquor AssetsTheft reduction policies and procedures are no good unless they are strictly enforced. Employees must be made clearly aware of the dire consequences of flouting house rules. There can be no gray areas. New members of staff should be asked to sign a confirmation that they have read the rules and fully understand the implications.

  • Prohibit bartenders from totaling the cash at the end of their shifts. This policy also protects honest bar staff.
  • Prohibit bartenders from both on- and off-duty drinking. Off-duty drinking leads to fellow bar staff overpouring, giving away free drinks or undercharging.
  • Prohibit bartenders from taking part in physical inventory counts. Ideally this should be a management-only function.
  • Bartenders should not be involved in ordering, receiving or issuing inventory. Again, this should be a management-only function.
  • Security. Enforce security procedures for all liquor, wine, beer, spirits and any other high-value inventory. Also, only key personnel should have access to the storeroom.
  • Require bartenders to record post-shift bar par readings. This refers to the number of bottles behind the bar at any given time. Bartenders should take a bar par reading at the end of the night shift.
  • Prohibit bartenders from recording more than one transaction per drink ticket. If bartenders are allowed to use a "running" ticket, they can easily neglect to record all the drinks they have actually sold.
  • Enforce voiding procedures. Bartenders should request managerial approval before continuing with a void. 

 

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

Atlantic Publishing Company
Amazon.com

Topics: liquor inventory, Bar inventory, bar inventory levels, liquor theft, bar theft, Bar Management, bar control, inventory counting, inventory control

Inventory Control: Safeguarding Against Theft

Posted by Nick Kaoukis on Mon, Jun, 13, 2011 @ 09:06 AM
By Chris Parry
Atlantic Publishing


Part 3: Theft-Reduction Procedures
Theft ReductionMore often than not, scams and thievery can be detected and/or prevented relatively easily. Strict enforcement of all employee rules is a must and vigorous prosecution of any offenders is essential. Employees must be made clearly aware of the dire con­sequences of flouting the house rules - every detail must be addressed.

  • Have a manager total the cash at the end of a bar shift. While the bartenders may feel distrusted, you can always point out that the rule is in place to protect honest staff.
  • House rules. All new members of staff should be required to sign a confirmation that they have read the house rules, fully understand the impli­cations involved and agree to follow the rules to the letter.
  • No drinking on duty. Prohibit all bartenders from drinking while on duty. Also, strictly regulate off-duty drinking. Off-duty drinking can see fellow bar staff overpouring, giving away free drinks or undercharging their colleagues, and while staff should be encouraged to socialize with patrons after hours, this should be closely watched.
  • Bartenders should not be involved in the
    stock-taking and inventory-counting process. Nor should they be involved in receiving, ordering or issuing inventory. It might be a painful process, but this really should be a management-only function.
  • High-value inventory. Strictly enforce all security procedures for liquor, wine, beer, spirits and any other high-value inventory. Only key personnel should have access to storage areas, and everything that comes out should be duly noted.
  • Require bartenders to record post-shift bar-
    par readings. This refers to the number of bottles left in fridges and behind the bar after a shift has ended. Engage in spot-checking of this count to ensure that no thieving is taking place.
  • Prohibit the practice of recording more than one transaction per drink ticket. If your bartenders are allowed to use a "running" ticket, they can easily neglect to record all the drinks they have actually sold and pocket the difference.
  • Strictly enforce voiding procedures. If an amount is rung up on the register, the bartender should not be allowed to void it without management approval.

This article is an excerpt from the Food Service Professional Guide to Bar & Beverage Operation, authored by Chris Parry, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company 
Amazon.com

Topics: liquor inventory, Bar inventory, bar inventory levels, Bar staff, liquor theft, Bar Management, bar control, inventory counting, inventory control

Inventory Control: Safeguarding Against Theft

Posted by Nick Kaoukis on Mon, Jun, 06, 2011 @ 09:06 AM
By Chris Parry
Atlantic Publishing


Part 1: Scams to Watch For
inventory control
Employees can very easily fall into a habit  their employers, and if you're not careful, you can be caught out for thousands of dollars, not to mention disgruntled customers. Keep an eye out for these 14 favorites:


  • The substitute. An employee buys his own bottle of a fast-moving spirit, brings it in at the start of the shift, and over the course of the night substitutes his own for the bar's bottle. Every time he sells a shot of this product, he then simply pockets the money, thus earning a large profit on his own alcohol while your stock stands still. While these people are not thieving your stock per se, they're thieving your business, so ensure you stamp or mark all of your spirit and liqueur bottles; check the empties regularly, and keep employee bags away from the bar and stockroom areas.
  • The short-pour. Your bartender short-pours every shot of a particular fast-selling spirit by between 25 and 50 percent, keeps note of how many shots she's sold from the bottle and when she's sold the number of shots that usually come from the bottle, she pockets the money from the remaining shots. Make sure that you check register receipts against the bottles used, and if possible, you use a computer-controlled pouring system, to take the opportunity to scam out of the employee's hands.
  • The "00."   Some registers can be opened with the press of just one button or from entering in a total of $0.00. Unbeknownst to some bar operators, this is the number-one means of rip-offs by staff. A customer buys a beer and gives the bartender a fiver. "Keep the change," says the customer as he walks off, so the employee hits the "register open" button, puts in the five-dollar bill and takes out five dollars in coins and singles for his or her pocket or tip jar. How do you avoid this scam? Remove that button. Your cash register provider can do this with no problem at all, and if a customer needs change in the future, your bartender simply asks him to wait for another sale to take place. Or even better, provide change machines.
  • Bogus breakage. Oops! A full vodka bottle hits the floor and the bar loses, big time. But did it really hit the floor? You might have a breakage bucket in which your staff are to put any broken bottles to show that they actually broke, but how do you know that the contents weren't poured into a hip flask beforehand? Or worse, that the contents were sold and the proceeds pocketed? The answer is simple: start a "you break it, you pay for it" rule. Of course, you don't need to enforce this rule if you don't think people are taking advantage, but it will stop the thieves.
  • Wasted waste. 'The beer lines were a little gassy today." Well, that might explain the two gallons of beer waste in the drip trays - but does it really? Pocketing the money for a draft beer and pouring a glass of water into the drip tray is an age-old scam and very hard to detect. Make sure your staff keep measurements of any beer waste and keep track of who wastes what. In time, any trends should become apparent, and even if certain staff members aren't crooked, you'll be able to tell very easily if they need lessons at pouring beer.
  • The backhander. Your security staff might not feel that taking ten bucks to let someone into the front of the line is wrong, but at the end of the night, when the person who paid that ten bucks has to go home because she's out of cash, it's your potential bottom line that suffers. To combat this, simply ask someone you know to go to the door and offer a kickback to jump the line. If the kickback is accepted, you need a new security guard.
  • The over-charger. Your bartender either rings up a price higher than what you've set for a drink or charges regular prices but rings up "Happy Hour" prices, pocketing the difference. To combat this, ensure that cash register tapes are changed at the end of every shift and the bartender explains any "Happy Hour" discounts. Likewise, ensure that all drink prices are posted clearly for your customers so that they can identify an overcharge.
  • The over-pourer. This bartender simply pours more than he or she needs to and hopes for a hefty tip. Keep an eye on your inventory, and this one should be easy to spot.
  • Rounding up rounds. Bartenders tally up a round of drinks as a "total price," rather than as separate items. This makes it easier to inflate that price without it being noticed by the customers. They then pocket the difference when they ring it up. To combat this possibility, keep drink prices clearly posted behind the bar or on table menus.
  • The "soft" scam. Your bartender simply neglects to charge for the mixer component of a drink, thus peeling a small bonus for every mixed drink he or she sells. This should be easy to spot if you check register ribbons, but if you don't, your staff can make a fortune.
  • The "padded" tab. When your customers run a tab, the bartender pencils in an inflated total, takes the money from the customer, then later erases it, replacing it with a correct total.
    Removing pencils from behind the bar and telling your staff that they must use pens is the best way to fight this one.
  • The substituted cash register tape. This ingenious little plan involves the bartender leasing a cash register just like yours and bringing in his or her own prepared cash register tape, substituting it for the real tape and pocketing the cash difference. Essentially, if you keep bartenders from "Z"ing their own tapes, you'll prevent this from being possible.
  • The refund. This is a simple, small-time scam where the bartender claims that a discrepancy in his or her takings was refunded to a customer for money lost in faulty vending machines or gaming equipment. Have any customer seeking a refund fill in a small claim form, with phone number and ID details included, and this shouldn't be an issue. Most customers won't mind doing this if they have a legitimate refund claim.
  • The jigger switch. The bartender brings in his or her own shot glass that seems identical to your normal barware, but is actually smaller. After several short measures, the bartender can start pocketing money without the inventory showing a shortage. Fight this by clearly marking your pouring measures and doing regular checks of your bar equipment.

 

This article is an excerpt from the Food Service Professional Guide to Bar & Beverage Operation, authored by Chris Parry, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company 
Amazon.com

Topics: liquor inventory, Bar inventory, liquor theft, bar business, Bar Management, bar control, inventory counting, 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, www.cost-watch.com, 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:
        www.barterwww.com
        www.barterbrokers.com
        www.netlabs.net/biz/itex/index.htm
  • 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

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.  
    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
    used.
  • 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 
Amazon.com

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 
Amazon.com

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

Better Inventory Management Equals a Better Bottom Line

Posted by Nick Kaoukis on Thu, Feb, 24, 2011 @ 14:02 PM
By Elizabeth Godsmark
Atlantic Publishing

Part 2 of 6: Inventory Tracking--Getting Maximum Value Out of Your Stock

Track Inventory - Track CostsLiquor Inventory Tracking

In order to control inventory, you need to know exactly what stock you have/had and where it is or when you sold it (known in the trade as "cradle-to-grave" accounting). To operate a cost-effective tracking procedure, it is crucial that you document all liquor, wines and beverages as they progress through the inventory cycle. Choose whatever tracking method works best for your establishment, but don't think you can do without some form of system. You can't. On a positive note, however, developing such a system is one of the best ways of keeping a tight rein on expenditure. Follow this six-step guideline and you shouldn't go wrong! There are several cheap, off-the-shelf forms that you can use to help you with your record keeping.

  • Step 1: Purchase order. The purchase order is the first form in the cycle. It provides a detailed record of every item purchased.
  • Step 2: Perpetual inventory. This second form tracks the movement of liquor, wines and beverages from the storeroom to various locations within the establishment. It also tracks each product's turnover rate. The perpetual inventory is also used for accounting purposes.
  • Step 3: Requisition form. This records the actual transfer of inventory from the storeroom to a specific location within the operation. This form is also used to record breakage.
  • Step 4: Bar par form. This records the quantity of each brand of liquor, wine or beverage currently stocked behind the bar.
  • Step 5: Depletion allowance form. This form is used to track the amount of spillage and wastage and to record any complimentary drinks.
  • Step 6: Physical inventory form. Used primarily when completing end-of-period accounts, it records the result of physical stock audits.

 

Monthly and Annual Inventory Control

Daily inventory control is the first, essential step towards keeping costs in check. In fact, no business can function without daily records. But, look ahead. To maximize control of overall costs, establish sound monthly and annual inventory procedures. Drain every dime out of your liquor, wine and beverage inventory -long-term!

  • Monthly inventory. Month-end figures are crucial for determining the financial success of your operation. Devise a simple monthly inventory sheet and use it, without fall.
  • Physical count. Carry out a monthly physical bottle count. Check totals against the perpetual inventory figures.
  • The "Cyclops." This handheld scanner reads the Universal Pricing Code (UPC). It can really speed up the monthly stock check!
  • Weighing scale. Use a precision liquor-weighing scale. These devices are extremely fast and easy to use. They can calculate to within 1/40 of a fluid ounce.
  • Annual inventory. Use annual inventory figures to review overall costs. For example, now is the time to consider price increases or to discontinue lines that are no longer cost-effective.
  • Resolve queries. Merely recording monthly and annual inventory figures is not enough. Resolve any discrepancies immediately. It all adds up!

 

Topics: inventory, inventory counting, inventory control

Better Inventory Management Equals a Better Bottom Line

Posted by Nick Kaoukis on Mon, Feb, 21, 2011 @ 09:02 AM
By Elizabeth Godsmark
Atlantic Publishing

Part 1 of 6: Establishing Good General Inventory Procedures Can Reduce Costs

General Inventory ProceduresLiquor inventory costs

Minor overall changes can result in major cost reductions. Take a fresh look at your existing inventory system. In every establishment, there is general room for improvement. For minimum effort, you can get maximum value out of your stock.

  • Timing. Move all drinks to a designated storage area as soon as they arrive. Don't let stock hang around. Drinks (and wine especially) need to be stored in an ambient environment, or their quality can deteriorate rapidly - and so can your profits! Also, unattended drinks, languishing in receiving areas, present a great temptation. Liquor is high on any thief s hit list.

  • Faulty goods. When receiving merchandise, look out for cracked and chipped bottles, mislabeled boxes, outdated or cloudy beer, correct type and vintage of wine, raised corks, leaking and weeping bottles, damaged labels and wrong-size bottles. Contact the supplier immediately about any dis­ crepancies.

  • Storage area. Your storage area must be fit for its purpose. Poor storage conditions can result in poor quality, breakage and escalating costs.

  • Security. Basic, but obvious. A good security system removes temptation and reduces the risk of external break-ins.

  • Rotate stock. First in, first out. This is important and avoids wastage, overstocking and running out. Pay special attention to beers: their shelf-life is limited. Most beverages, also, have no longer than a month before the sell-by date.

  • Control. Large or small, every drinks outlet needs some form of control procedure. Track your products from the moment they arrive at your premises to when they are sold. While this doesn't have to be complicated, the key to any good control system is to make sure that all the liquors, wines and beverages are located in the right place at the right time and are being rotated properly.

Make the Most of Your Storage Areas

Where and how you store your liquor, wines and beverages can make a big difference in turnover and profits. Once you have taken delivery, treat your inventory with respect - it has the potential to make or break your business.
  • Location. Define storage areas. Are you using the most convenient areas for storage? Rethink. Centrally located storerooms and walk-in coolers make ideal storage areas. Easy access saves time and money.
  • Other storage areas. "Storage" means more than an area for dumping received goods! Storage locations include shelves, workstations, reach-in refrigerators and behind the bar. Keep all these areas accessible and clutter-free. It speeds up your operation and reduces breakage.
  • High-value wines. Consider separate cellaring for prestige wines, somewhere away from the busy "shop floor" environment. As turnover of such wines is slower, accessibility is not top priority. More important is security and perfect storage conditions (even vibrations can affect the quality of good wines!).
  • Extra security. All drinks should be stored in a secure area. Organize the layout of storage areas to offer maximum security for liquor and high-value wines. Only personnel who need keys should have them.
  • Quantity. Drinks can be stored in bulk in the main storage area. Drinks in general storage areas, such as behind the bar, are better stored in the units or quantities in which they are sold.
  • Environment. Know your product and store it accordingly. Maintain proper temperatures, humidity and ventilation. Wine is particularly sensitive to environmental influences. It can easily absorb odors from nearby food storage areas. Poor storage practices can quickly reduce the quality of stored inventory - and nothing affects profits like quality!


Topics: Bar inventory, Liquor cost, inventory counting

All posts