Compare Delivery Invoice and Purchase Order Product Quantity (weight or count) Purchase Unit Price Confirm Product Quality Sign Delivery Invoice Issue Credit Memo (if necessary) Move Product to Storage Complete Receiving Report Step 1: Step 2: Step 3: Step 4:

 Competent Personnel  Proper Receiving Equipment  Proper Receiving Facilities  Appropriate Receiving Hours  Available copies of all specifications  Available copies of purchase orders

 Request a credit memo because the driver has no authority to alter the delivery.  When a product differs slightly form the standard it should NOT be rejected for 2 reasons:  1. Suppliers do not want to do business with people who dwell on small details.  2. It leaves the receiver short.

 Look at the products on each slide.  Circle or underline if each product is “acceptable” or “unacceptable”. If “Unacceptable”, identify the problem and estimate the cost of the product.

What does the picture suggest? Determine the Unit Cost: Case: $28.90/12 qts What is the Unit Cost? Unit Cost: $2.41

 An entire case of apples arrives. ¼ of the case contains #1 quality apples that appear in the picture. Determine the Unit Cost: Case: $22.95/20-22 What is the Unit Cost? Unit Cost: $1.15 ea

 Delivery ticket has a list of regular items because of regular payment.  Watch for shrinkage of products as they are delivered.

 Odd Hours Receiving  Drop Shipment  Mailed Deliveries  COD Deliveries

1. Unintentional Error 2. The dishonest supplier – honest delivery agent. 3. Honest supplier with dishonest delivery agent. 4. Dishonest on both sides.

ItemPurchase Unit No. of Units In Kitchen Storage (a) Purchase PriceTotal Cost Green BeansCase2$31.50$63.00 Total$ (a) Note: ideally items are stored in the same containers in which they were purchased. This can reduce double- handling and provide a convenient container for marking information about the date of receipt and product costs. It is also, for example, easier, faster and, probably, more accurate to count one case of six #10 cans of fruits or vegetables than it is to count six individual cans of each product.

Item:Strip Steaks (6 oz.) DateNo. of Purchase UnitsBalance InOut 37 9/10/xx /11/xx352027

Is the cost to your restaurant of the food and beverage products your restaurant sells. Since your goods pertain to your food and beverage inventory, COGS is determined with the following equation: Beginning Inventory + Purchases - Ending Inventory = COGS.  Beginning inventory means the amount of product that you have in your kitchen and storage rooms at the beginning of a period, usually the beginning of the week. For instance, if Monday is the start of your business week, and you have $5,000 worth of food and beverages on your shelves, $5,000 is your beginning inventory.  Purchases means the amount of inventory you purchase in food and beverage orders in that period of time. If an order of another $3,000 worth of inventory arrives on Friday, this would be considered the purchase.  Ending inventory, then, is the amount of food product you have left when the work week is over. Although you purchased product during the week, but you will have less inventory at the end of the week since you sold the food to your customers. For example, at the end of the work week, you have $4,000 worth of inventory remaining.  Example: $5,000 + $3,000 - $4,000 = $4,000 COGS

 Cost of food inventory at beginning of month= $29,500  Cost of food purchases during month= $76,000  Cost of food inventory at end of month = $27,500  Food cost (cost of goods sold) during month= $78,000 = 2.74 turns

 Purchase unit – The standard size of the product package.  Product usage rate – The number of purchase units used during a typical order period.  Order period – The time for which an order is normally placed.  Lead time usage – The number of purchase units used between order placement and delivery.  Safety level – The minimum number of purchase units that must always remain in inventory.  Order point – The ideal number of purchase units in inventory when an order is placed.

 One of the most important numbers restaurant managers and owners look at is food cost percentage.  In food service, this % represents the portion of sales ($) spent on food. Since you reap sales from the inventory you use, you can determine the food cost % by money you spent on food sales (COGS) by your total food sales. The following equation may help clarify the process:

 So, let's say the sales for the week were $12,750. Your new equation would look like this:  In this case, about 31% of sales were spent on food and supplies. This is a fairly typical food cost for a restaurant.

 It is very helpful to break down your food cost into all the types of foods and beverages your purchase.  For instance, a 31% food cost may be broken down into the following food categories:  If food cost is high, categorizing like this will help determine where the money is being over-spent. Operators can keep a much better tab on food cost when they know exactly what percentage of the total cost they are spending on each category of food.

 The COGS equations are essential for figuring the restaurant's gross profit:  Gross profit is calculated by deducting money you spend on food and beverages from your total revenue.

 Using the ongoing example, you would subtract your COGS ($4,000), from your total sales ($12,750) in order to find your gross profit. Although gross profits may be included in your Profit and Loss (P&L) statement, the important number to look for is the net profit. Net profit, or actual profit, is the gross profit minus all operating costs such as labor, rent, repairs, and marketing costs, to name a few. This is your restaurant's true profit after all is said and done.

1. Keep an eye on your profits and losses (P&L). 2. Conduct inventory consistently. 3. Price menu items properly. 4. Portion food correctly. 5. Handle food properly. 6. Rethink the garnish. 7. Keep a record of all food waste. 8. Be consistent with food purchases. 9. Train employees to care.

 Making profits is the restaurant's # 1 goal. In order to do this, the manager needs to simultaneously bring in revenue and control costs in the restaurant.  This is one of the biggest challenges, but also one of the manager's most important responsibilities.  Maintain a steady, profitable food cost by adhering to all recipes  Assessing purchasing procedures  Properly conducting inventory in your restaurant.