How to conduct a food stocktake

How to conduct a food stocktake

The purpose of counting the food is to put a value on all of the food stock on hand. This includes all consumable food stock including breads, sandwich fillers & sauces, meats and coffee.

This post will show you how to conduct the stocktake and also how you should record the necessary data in an excel sheet.

  1. Creating the excel document – This is used to record the stock on hand.

Sheet 1 – this should have headings such as

  • Gross Sales – Incl VAT
  • Net Sales – Ex VAT
  • VAT amount
  • Opening Stock – if it’s the first stocktake then the Opening Stock will be Zero. If a second count then the Opening Stock should be the Closing Stock from the previous stocktake
  • Closing Stock – the total value of stock on the day of the stocktake
  • Purchases – Total purchases for the period ex VAT
  • Cost of Sales – Opening Stock + Purchases – Closing Stock
  • Gross Profit – Net Sales – Cost of Sales
  • Gross Profit % – Cost of Sales / Net Sales x 100

Sheet 2 – The Data Entry Sheet – This is used to record all stock items.

The columns to have in it are

  • Column 1 – Product name
  • Column 2 – Unit of Measure ie: case, kg, individual, pack of 6 etc
  • Column 3 – Unit Cost – Ex VAT
  • Column 4 – Quantity on hand
  • Column 5 – Total Cost – Unit Cost x Qty on Hand

  1. Preparing for the stocktake
  • Have the correct equipment – Weighing scales, clipboard and paper, uniform including white coat, gloves and hat.
  • Ensure that all fridges and freezers are clean and are easily accessible with labels facing out
  • All stock is identifiable
  • You know the correct cost of a portion of the product you are counting
  • Have the cost prices of all dishes updated on your Data entry sheet as above. You can use this sheet to record the stock
  1. The counting of the stock

Record all stock been counted in the data entry sheet

Weigh all meats, fish and high value items

Count the units of the remaining items of stock

  1. Transferring the data into the Excel sheet

Simply take the totals from your count sheet and then enter them into the excel sheet.

Total up the values and this then forms your closing stock total. If this is your first stocktake then this is your opening stock value for the next stocktake

  1. Calculate the purchases for the period

If this is the first stocktake for you to complete then the purchases are zero.

On your second stocktake, say in a week’s time, you will record the total value of the purchases received ex VAT

Ensure that the dates on the delivery dockets are are within the period

  1. Enter in the sales

Your sales reads from your EPOS (Electronic Point of Sale) will tell you what your sales are for the period.

We use the Net sales figure for profit calculations

  1. Calculate your GP (Gross Profit)

Using the above process in Step 1.

Your stocktake is now complete and you have your Gross Profit.

Now its time to analyse the data, the result, and how improvements can be made in increase your GP. This can include reviewing your cost prices, portion control, count practices, menu analysis etc.

That’s a story for another day.

Patrick is Managing Director of Stocktaking.ie, Ireland’s leaders in outsourced stock control. Stocktaking.ie use the best staff, systems and technology to assist customers nationwide in ensuring that the hassle and stress is taken out of in-house stocktaking.

The Golden Rules of Cost Control

Here is a list of The Golden Rules of Cost Control that are essential to manage a successful business.

1. Keep it Simple

Because the Hospitality Industry relies as much on customer service as effective cost control (neither will exist without the other), any cost control system has to be simple for all involved. Over-complicating systems will keep your staff from the guests as well as allowing staff the opportunity to claim the system is too much work and difficult to complete, so keep it simple and practical.

2. Measure like against like

What I mean by this is that in order to set goals and targets and compare one period against another, both periods need to be the same. There is no point measuring a four week period that had three busy calendar weekends against a four week period that had four busy calendar weekends. By keeping periods the same (ie Monday to Sunday every week) you can start to identify trends and plan better for future periods.

3. Insist on speedy reporting

If it takes you too long to get the vital information you need from your business, then the chance are that any cost losses incurred during this period have continued into the subsequent period too, before you have had a chance to address them. Identify your KPIs (Key Performance Indicators) for each revenue department and be able to extract these figures as needed to give you a snapshot of how well you are doing and give you piece of mind until you get the report proper.

4. Don’t Stop Controlling

If you stop controlling or see it as a one-day activity a couple of times a year, then you have missed the point. Control is a continuous action and would be better referred to as a “Mentality” than as an action. This goes back to a speedy reporting system and taking the time each day to review the KPIs. By tweaking smaller parts of the operation on a daily basis, you will achieve greater and smoother results as oppose to making large-scale changes periodically which may meet with opposition from less-like minded staff.

5. Measure it to Manage it

When it comes to Purchasing and Receiving, think like a bank clerk who has no allowance for cash handling errors. If he makes a mistake, he pays for it. Why operators allow any less of a mentality at the receiving door is beyond me but adhere to this principle and you won’t go far wrong: “If it’s ordered by weight, weigh it, If it’s ordered by count, count it”.

6. Know what your Costs SHOULD be

I have lost count of the number of operators who when asked how things were going, replied by saying that turnover was up which they were happy with, yet further questions revealed that they agreed the costs associated with the increased turnover were not proportionate and the expected profits were not forthcoming. Why? Because all of these businesses had one thing in common, none of them knew what it SHOULD cost to generate their turnover levels. Few operators had costed their menus down to the sprig of parsley and fewer could tell me the price of a loaf of bread! Surprised? Don’t fall in to the same trap. Know what your costs should be irrespective of turnover, that way, you will be less likely to be faced with unwelcome surprises.

7. Know the Relationships of Costs

One principle which was drilled into me when I was a trainee manager was that costs are all relative to one another and no single cost can be examined independently of the other related costs. In other words, it’s no good having a fantastically low cost base in your beverage if it’s costed you double the normal labour costs to achieve that. Learn to relate the relevant costs with each other and review these costs together.

By investing the time and effort into establishing a watertight but manageable control system, you will be laying the foundations for a well managed and successful business. I often say to dubious operators that if they think it’s expensive to setup and implement such a control system, just think what it will cost you if you don’t!

You have been warned…..

What is a Stocktake

A stocktake, often referred to as inventory (depending on where in the world you are) is performed by stocktakers and it determines how much stock a company has on its premise’s at any one point in time. (more…)

Third Test Blog Post

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