As an Operator, you are familiar with the cost and usage of each item in your restaurant. For Operations to be the most efficient, the following must be occur:
- Item records, both Purchased Items and Vendor Items, should be setup correctly and adjusted accordingly
- Invoicing is completed daily and reviewed weekly
- Inventory Counts are completed accurately and consistently
Operations will run successfully and efficiently if all three of the above tasks are completed on a consistent basis. This guide reviews these tasks more in depth below.
Item Record Setup
Item records, both Purchased Item and Vendor Item records, must be entered correctly and assigned to the correct Locations in Restaurant365. Review and update item costs as necessary on the item record.
Invoices should be entered daily, if possible, and reviewed at the week's end for accuracy. This includes the reviewing of electronic entering, as electronic invoices could still have errors on them. The goal for this task is to ensure that your restaurant is receiving the correct item at the correct size and quantity for the correct pricing.
Step 1: Review Line Items
Open the first invoice and begin reviewing each 'Line Item' for the size, quantity, and price. Each item should be entered exactly as it is noted on its corresponding document. If an invoice is entered incorrectly, update the invoice or notify the Employee assigned to this entry to review and correct an errors. Click here to learn how to review an AP Invoice.
Step 2: Assign Missing Items
Any missing items should be assigned or created to provide consistency among Locations. These include completely new items or existing items that have a different pack size or brand change. For example, if one person buys Cilantro as a Case-60/ct for $20, and another person buys 10ct for $5, then the Case-60/ct would be valued at $30 and would cost $10 more for the same amount. Click here to learn how to address missing items in Classic AP Invoices.
Step 3: Run the Item Price Change Analysis Report
Running the Item Price Change Analysis report will show the price of the item at the start date, which can be entered for the previous Inventory Count, and the average price of that item throughout the selected date range for that report. That way, you can determine the amount of the item used, the change in price, and the price of the item compared across multiple Locations.
Note: Item Transfers
Item transfers often occur when one Location is limited on items or has an excessive amount of an item and act similarly to AP transactions. It is important to note the following when entering an item transfer:
- The transfer will default to the new Location's Inventory UofM and Cost, but these fields will be editable
- If the price of an item is manually changed, the price of that item will be updated for both Locations
Inventory Counts should be done consistently and on the same day by the same people, if possible, for the most accurate recording of stock usage. It is recommended to have a minimum of two people count inventory (one to count and call and the other to write and review) and to mark inventory quantities on printed count sheets for the first few Inventory Counts.
Entering Count Sheets
Ensure that 'Add to Current Qty' is selected on the 'Mobile Qty Entry' drop-down selector so that multiple handheld devices can be used at the same time while counting. Even further, this selection will add the quantities together rather than overwrite the previous quantity counted for that item, which would occur if 'Replace Qty' was selected.
It is recommended to complete at least three Inventory Counts on a printed Inventory Count form as to ensure the counts can be completed the most accurately. Users will then use their mobile devices to complete a count. Before doing so, it is important to exit out of an Inventory Count if it was originally opened on a desktop computer. The desktop acts as a master record, so if an Inventory Count was initially opened and remained open while an Inventory Count was saved on a mobile device and then saved on the blank desktop template, it will erase all counts.
Once completed, save your counts. If you completed the count on a paper copy, ensure that you enter the count into the computer and then upload a scanned image of the count using the 'Upload File' button.
When finished, save the count.
Reviewing Inventory Counts
To ensure that the Inventory Counts were taken correctly, it is important to review them before they are approved. Click here to learn how to review Inventory Counts.
Profit and Loss
Once the Inventory Count is reviewed, navigate to the Profit and Loss Statement in 'My Reports'. Running this report will display the Usage $ of each COG category. Open the Report Parameters and select the following:
- (Cutoff - Controllable)
- Report Type - Operations Statement
- Detail Level - Detail
- Filter By - Location
- Filter - Location Name
- Calendar - Operational
- As Of - Current
- Hide $0 Balances - No
- Show Unapproved - Yes
- Rounding - Your preference
- Account View - Your preference
- Metrics - Your preference
- Variance Percent - % of Sales
- Location View - Your preference
Actual vs Theoretical Analysis
After viewing the Usage $ of each COG category through the Profit and Loss Statement, run the Actual vs Theoretical Analysis report to identify problem usage areas by seeing both the Quantities and Costs associated with each item. This report allows the User to drill down into the transactions that make up the numbers as well as include a summary by Category for a Controllable Cost of Goods approach to analysis. It is recommended to run the report by the following Report Parameters selection:
- From Count - Previous Stock Count
- To Count - Most recent Stock Count
- Key Items Only - No
- Show Unapproved - Yes
- Count Time - End of Day
- Item Category 1-3 - All Selected
- Subtotal By - Item Category 1+2+3
- Show % Of Sales - No
- Sales Account - All Selected
- Subtotal By Category - Details
- Efficiency Calculation - Include Waste
- Actual Usage Dollar - Unit Cost
- Waste Calculates - Show
- Items To Display - All Items
Review any discrepancies by drilling into each item and/or amount displayed in blue. Any amount in red means that you have more of that item on the shelves this count than you did the previous count, but did not receive an invoice or transfer. This often occurs when item transfers are not completed correctly, invoices are not entered into the system, or a miscount occurred on the current or previous stock counts.