Here is a list of policies and systems that have proven results:
* `No ticket, no food' policy. This is perhaps the most effective policy for controlling food and beverage cost, and setting it up should be No. 1 on your to-do list. If your POS or cash register doesn't have the ability to print orders to the kitchen and bar (often called requisition printing) then you may want to start shopping for one that does. It is common knowledge among POS vendors that restaurants using requisition printers typically enjoy as much as 5 percent or more in cost savings than those that don't. The reason is simple. By employing a policy that all orders must be rung up on the POS before they can be made, you eliminate the possibility of unrecorded sales.
* Keep a waste log. Every restaurant experiences some degree of waste. However, waste is a controllable expense. You should have systems in place to both minimize and record wasted product, such as meals returned by the customer, kitchen mistakes and spoilage. Keeping an accurate accounting of the value of wasted product can help to account for variances between ideal and actual food cost.
* Portion control tools. Poor portion control is one of the leading causes of food cost variances. Think about it; your ideal food cost is based on the premise of exact portioning for each menu item, including the portioning of each ingredient within a menu item. If your prep and line cooks have gotten in the habit of "eyeballing" measurements rather than sticking to the exact recipes, chances are your food cost variance could be as much as 5 percent or more. Proven portion control strategies include the use of portioning scoops, scales and measuring spoons and cups. Preportioning can be effective in controlling costs by using portion baggies and a scale to preweigh product prior to stocking the cook line.
* Recipe quick-reference charts. The fast-paced environment of most restaurant kitchens makes it impractical to use the recipe manual for every menu item. Characteristically, cooks are required to memorize the proper portions and steps for preparing each item on their station. The recipe "quick reference" is used as the name implies, providing the cook with an at-a-glance list of ingredients, portion size and proper portioning utensil for each preparation step. Optionally, recipe references can be accompanied by photos of the finished product. Proper portioning and adherence to recipes, along with a visual reference of the properly prepared menu item help to ensure consistency in both taste and presentation.
* Inventory control systems. Every restaurant operator appreciates the need for inventory control, but amazingly, few independent restaurant operators practice it. You don't need expensive software to control inventory, although there are a lot of good ones out there. What you do need is to realize the importance of maintaining inventory levels at their proper amounts. Too much product on hand often leads to waste, increased opportunity for theft, and a decrease in available cash. Keep in mind this one simple fact: Inventory is cash, and when your cash is sitting on the shelf it cannot be used to pay wages and rent or purchase the products that are not on the shelf. Likewise, a shortage of proper inventory levels leads to expensive hot-shot deliveries, higher prices and running out of product on a busy Friday night.
You can gain control of your inventory by using these three basic systems:
* Maintain optimum inventory turnover. To calculate monthly inventory turnover, you divide the cost of sales for the month by the average value of inventory on hand. For instance, if you use $10,000 per month in food product, and the average value of food inventory on hand is $2,500, then you are turning over your food inventory four times per month (10,000 divided by 2,500 equals 4). Optimum inventory turnover for most restaurants:
o Liquor: 0.25-1.5 times per month (varies among concept/sales mix)
o Bottled beer: two to three times per month
o Draft beer: one to two times per month (varies with number on tap/concept)
o Wine: 0.75-1.5 times per month (varies with size of wine list/sales mix)
* Conduct weekly inventories. To accurately calculate the cost of sales, calculate the value of inventory on hand. If using the running inventory order guide described earlier, your staff is already in the habit of conducting cyclical counts of product on hand to replenish orders. The best time to take weekly inventories is when the shelves are at their lowest. For most restaurants, this would be after close on Sunday and before opening on Monday. Taking a full inventory on Sunday evening "kills two birds with one stone." First, doing so enables you to quickly calculate your food orders to bring the shelves back up to par. Second, you can use the counts recorded on your order guide as the entries into an inventory spreadsheet that has been set up to mirror the products listed in the order guide. Spreadsheets should be configured to record count and purchase price of each product. A column should be added with a formula that multiplies the unit count times the unit purchase price to arrive at the total value of the product on hand.
* Daily key item inventory tracking. This is one of the most effective cost-saving measures any restaurant can carry out. The objective of this practice is to identify 10-15 high-cost, high-use items that you use every day, then to track the purchase and sales of that item daily. For example, let's say that your restaurant has several items that use 8-ounce chicken breasts. The manager begins the day by counting the number of breasts on hand and records it to the key item tracking sheet. She then enters the number of breasts received from the vendor that day. The number sold for the day is taken from the item sales mix report (includes all items that have an 8-ounce breast). Finally, she counts the actual number of breasts left at the end of the day. Ideally, the actual use should match the calculated usage. A running inventory order guide is an excellent tool for tracking your key inventory items. It also serves as an inventory count form for your weekly inventories.
Source: Restaurant Startup & Growth