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Food Cost

Management
Best Practice
Manual
A recipe for success

Index
Section 1 Management Overview
!

Objectives and Outcome

Key Performance Indicators

Why have a manual?

Food Cost Management Facts

Who needs to be involved?

Management Responsibility Table

How to use the manual

Food Cost Management Action Checklist

Process Flow Chart

Questions

HUKI Food Cost Management Best Practice

Section 2 Planning
!

Menu Costing

Sales Mix Analysis

Gross and Net Weights

Achievable Food Cost Exercise

Setting Menu Selling Prices

Forecasting and Food Cost Planning

Banqueting Costing and Purchase Planning

Peaks and Troughs Planning

Shopping Basket

Profit Maximisation

Budgeting
2

Section 3 Ordering, Receiving, Storage, Control and Wastage


!

Par Stocks

Must Stocks

Ordering The Purchase Cycle

Receiving and Goods In

Storage

Security and Key Control

Out of Hours Policy

Wastage and Out of Date Stock

Section 4 People
!

People

Colleague Feeding

Section 5 Revenue Control and Yield Management


!

Revenue Control

Reports

Covers Definition

Nominal Code Definitions

Food Tracker

Stock Taking

Table Management and Food Production

Optimum Food Costing

Sharing Information

Section 6 Appendices
!

Charts and Food Cost Calculations


3

Management Overview
!

Objectives And Outcome

Key Performance Indicators.

Why Have A Manual?

Food Cost Management Facts

Who Needs To Be Involved?

Management Responsibilities Table

How To Use The Manual

Food Cost Management Action Checklist

HUKI Food Cost Management Best Practice

Questions

Objective
To provide solutions and tools to effectively manage
hotel food cost:
Making Food Cost Management A Way of Life.

Put in place monitoring and control procedures to make sure


that these solutions and tools are used.

Outcome
This manual will allow the hotel to develop a systematic
approach to food cost management that will bring consistent,
controlled and planned profitability.

Leading to: - Optimum Food Costing.


Consistent Standards Throughout The Hotel And Across The
Hilton Estate.
Management Has Clear Understanding of Best Practice.
Improved Hotel Food Costs.
Improved Efficiency.
Improved Customer Service.
Improved Staff Training And Knowledge.

GOP Impact On Balanced Scorecard.

Key Performance Indicators for


Best Practice Food Cost Management.
(KPIs)
Planned food cost is achieved per period
All menus and buffets are costed
Monthly food purchasing plan is in place
Par stocks in place
Monthly shopping basket exercise completed
Controlled ordering procedure in place
Controlled receiving and storage procedure in place
Recorded wastage procedure active
Staff training and knowledge up to date
Table management procedures in place
Staff feeding meeting Hilton people standards
Effective revenue control in place
Stocktaking accurate and consistent

Why Has It Been Created?

Hilton Hotels have a varying level of efficiency in food cost management.

Control Systems to manage food cost vary from hotel to hotel.

No formal document exists to teach Chefs and Managers the Hilton


Standard.

To separate the food operations process into component parts and give
clear operational procedures for each part.

There is little understanding of the formal mechanics of food cost


management.

There is little understanding of what action to take to improve costs


generally or what contingencies to make, to react to changes in business
demands.

Change in management and staffing means that it is not always possible


to work to the same standards, and due to the multi cultural and
multinational nature of our kitchen brigades systems and procedures may
be different in other countries.

A lot of our Chefs are recruited from smaller hotels or restaurants where
formal food costing is not important to the business.

Chefs control the biggest cost budget after payroll but are given little or
no training and assistance in how to do it.

Optimum unit food cost is not planned.

To inform, educate and share knowledge with management and kitchen


staff on the importance of food cost management.

Food Cost Management Is Not Just The


Responsibility Of The Chef!

Food Cost Management


The Facts
Hilton, as a group has generated and forecasts to generate the following sales,
purchases and cost percentages in the 3 year period ending 2002.
Year

Sales

Purchases

Cost

2000

119.2m

34.4m

28.88%

2001

123.7m

35.3m

28.54%

2002

122.5m

37.2m

30.39%

After payroll, food purchase is our biggest operating cost of sales. Therefore it is
important that tight controls and tested methods exist in order that the company
maximizes profitability.

Frightening Scenario
It is human nature that processes can lapse for various reasons such as
sickness, holidays and new staff appointments etc. It is also realistic to
assume that we do not do things right all of the time so imagine if the
following revenue was not raised at each HUKI hotel every day of the year.
1 x Exclusive breakfast due to Fidelio meal plan report or guest key card not
being checked.
1 x TDH dinner due to Fidelio meal plan report or guest key card not being
checked.
1 x Extra banqueting dinner due to an extra delegate arriving late.
If we use an average selling price of 10.50 for breakfast, 21.95 for dinner
and a banqueting menu of 29.00 across the 77 hotels in the Hilton portfolio,
we would be losing net sales of: -

1.725m
For your hotel this could mean a minimum of 22.500 p.a. lost sales
and 6.750 unattributed costs.

Who Needs To Be Involved And Understand The


Process
General Manager,
Executive Head Chef,
Food and Beverage Manager / Food Services Manager,
Financial Controller,
Conference and Banqueting Sales and Operations Managers,
Restaurant Manager,
All team members who impact on food buying, production and service.
Each department head plays a key part in the process and it should be noted that
their contribution is important. In order to achieve a balanced approach,
everyone must contribute and be looked upon as an important contributor.
Key Responsibilities

General Manager Overall executive responsibility for food cost


management likened to responsibility for all revenue streams and control
processes within the hotel. Strategic food cost planning.

Executive Chef Daily management and control of all processes, buying,


menu planning and costing, receiving, preparation, cooking, stock control
and wastage control etc. Strategic food cost planning.

Food and Beverage Manager, C&B Manager - Efficient service, revenue


maximisation, sales, table management, wastage control, staff training
and customer relationship management. Strategic food cost planning.

Conference & Banqueting Sales Manager Revenue maximisation, profit


planning and customer relationship management.

Financial Controller Provision of effective control measures, revenue


capture, audit and periodic review of accuracy.

Management Overview

Menu Costing

Gross and Net Weights

Setting Menu Selling Prices


x

Stores

HR Manager

C&B Sales Manager

F&B/FS Manager
x

Achievable Food Cost Exercises


Forecasting and Food Cost Planning

Head Chef

Financial Controller

General Manager

Management Responsibilities Table

x
x

Banqueting Costing and Purchase Planning

Peaks and Troughs Planning

x
x

Shopping Basket

Profit Maximisation

Ordering

Receiving and Goods In

Budgeting

Storage

Security and Key Control

Out of Hours Policy

Wastage and Out of Date Stock

People

Staff Feeding

Revenue Control
Reports

x
x

Covers Definition

Nominal Code Definitions

EPOS Management

Food Tracker

Par Stocks

Must Stocks
Stocktaking

Table Management and Food Production


Optimum Food Costing

x
x

10

HUKI Food Cost Management


Best Practice

It is Best Practice that Banqueting menus should not be sold under their
costed price. Therefore if a customer wishes to purchase at a given selling
price the Chef should be consulted to devise and cost a separate menu.

It is Best Practice that all menus are costed.

Best Practice is for all costings to be reviewed at least every 3 months to


take into account market price fluctuations and seasonal changes.

It is Best Practice that a product photograph accompanies all menucosting sheets.

Achievable food cost exercises should be undertaken at least every 6


months as Best Practice. Every 3 months if there is a food cost problem.

It is Best Practice that 3 AFC exercises are undertaken per service as a


minimum.

Best Practice is for the Financial Controller to undertake this exercise to


review hotel selling prices against cost percentages.

Best Practice is to have a 7-9 day average stock holding.

Best Practice is for the staff food to come from the public menus.

It is Best Practice that the shopping basket exercise is carried out 3


monthly and then at the input of new menus or dishes.

It is Best Practice that the hotel works with a recorded Par Food Stock. If
relevant this should be per outlet. Par Stocks should be based upon a
maximum of 7-9 days trading per average.

It is Best Practice that if food is specified, ordered, received and stored by


the same person, that invoices and control measures are audited for
irregularities at least by weekly.

It is Best Practice that nominated suppliers are adhered to when


purchasing food products.

It is Best Practice that individual supplier order sheets are used.

11

It is Best Practice that as a minimum all Meat, Fish and Vegetables are
weighed on delivery.

It is Best Practice that the Head Chef has overall control and is fully
responsible for purchasing and stores.

It is Best Practice that invoices are not paid until Credit Notes are
received.

It is Best Practice to return inferior quality goods.

It is Best Practice that all kitchen personnel can calculate a food-selling


price given a set cost price.

It is Best Practice that all kitchen personnel are trained on this manual.

It is Best Practice that contracts are signed for minimum numbers, and
that minimum numbers are charged without fail.

It is Best Practice to use a Food Tracker System.

It is Best Practice that a stock valuation is obtained per accounting


period.

It is Best Practice that stock is counted weekly if food cost percentage is


not being achieved.

It is Best Practice to calculate Optimum Food Cost as part of month end


calculations.

It is Best Practice that as a minimum all red sections of the Food Cost
Management Action Checklist.

12

How To Use The Manual


1) Before use it is assumed that all users have a degree of knowledge. Not all
sections will be relevant to you or your hotel.
2) The manual acts as a training tool and aide memoir to ensure that you
have a consistent and structured approach to food cost management.
3) If relevant each section has detailed procedures for you to follow.
4) The manual contains appendices of recommended blank masters for
reference and copying.
5) The responsibilities of each manager are identified in the appendices.
6) Each section has been given a degree of importance of effective food cost
management.
Red sections are essential tools
Yellow sections are recommended tools
Green sections are desirable tools should problems still exist.
7) Work through each section of the manual. Start with the management
responsibilities and action checklist found in the next section. Do a health
check of where you currently stand.
8) Formulate an action plan of what needs to be done and allocate
responsibilities.

13

Food Cost Management Action Checklist


Action Area

Section

Menu Costing

Achievable Food Cost Exercises

Setting Menu Selling Prices

Forecasting and Food Cost Planning

Banqueting Costing and Purchase Planning

Budgeting

Ordering

Receiving and Goods In

Storage

EPOS Management

Wastage and Out of Date Stock

Revenue Control

Nominal Code Definitions

Optimum Food Cost Calculation

Profit Maximisation

Security and Key Control

Out of Hours Policy

Staff Feeding

Food Tracker

Par Stocks

Stocktaking

Table Management and Food Production

Gross and Net Weights

Peaks and Troughs Planning

Shopping Basket

Continuous Review of Cost, Prices, Accuracy

Yes / No

Throughout

Covers Definition

People

Reports

Must Stocks

Red areas are actions that are essential standards of operation.


Yellow areas are recommended if food cost problems exist.
Green areas are desirable action areas.

14

Before You Go Any Further Ask Yourself These Few


Simple Questions

Is food cost profit important to me?

Do I know what to do if I get or know I am going to get a poor food cost


result?

Would I like to achieve a better food cost for the business?

Do I know how much any % improvement in food cost would mean to


hotel profitability?

Can I put in place an action plan to improve?

Have I been able to solve all of my problems in the past without them
reoccurring?

Do all of my team understand how to manage food cost? Can I teach them
to manage it better?

Are enough team members involved in managing the food cost? Did I
know that so many people play a part?

Do I know how to calculate food-selling prices to achieve a profit?

Do I know the cost of each dish sold and are my menus costed?

Do I know the average food cost of my buffet?

Are any or all of the tools in place to manage food cost?

The list could be endless but if you answered NO to any of these questions
then this manual could benefit you.

15

Planning
!

Menu Costing

Sales Mix Analysis

Gross and Net Weights

Achievable Food Cost Exercise

Setting Menu Selling Prices

Forecasting and Food Cost Planning

Banqueting Costing and Purchase Planning

Peaks and Troughs Planning

Shopping Basket

Profit Maximization

Budgeting

This Section Contains KPIs


!

All menus and buffets are costed

Monthly food purchasing plan is in place

Monthly shopping basket exercise completed

16

Menu Costing
Menu or recipe costing is the key component of effective food cost management.
This applies to all food that is served whether it is a single item such as a
sandwich, single main course, restaurant buffet or indeed a breakfast buffet. You
need to know how much an item costs before you can effectively set a selling
price. Or indeed if you have a selling price, how much a dish needs to cost in
order to make a set profit margin.
Menus need to be costed to ensure that both profit is made and that customer
expectation of quality and standard is reached or exceeded. Therefore a balance
needs to be made between what is practical to put on the menu to achieve cost
and what is luxury (You can up sell to luxury?).
With differing sales mixes within all hotels due to the type of food offerings, it is
not the case where all food products sold will automatically achieve a planned
food cost. For example the costs in a fine dining restaurant will or might be
considerably higher than at banquets or breakfast.
Due to seasonal variations some products are not available all year round or
their price might be artificially inflated due to the fact that the product is
sourced from overseas. Menu costing needs to make allowance for this.

Reasons and Procedures for Menu Costing


1) Recipe costing must be completed for all dishes on the menu, including
banqueting and table main courses.
2) Costing exercises must be undertaken on all non-menu buffets. i.e.
breakfast and carvery.
3) Costings should be made on a gross weight basis. (See gross and net
weights).
4) Best Practice is for all costings to be reviewed every 3 months to take into
account market price fluctuations and seasonal changes. (See also
stocktaking).
5) Any changes should be noted and selling prices or recipes adjusted
accordingly.
N.B. all menus should carry the proviso that prices are subject to
change etc. it is up to the hotel to enforce this as with all contracts and
agreements.
6) Update your EPOS system and the recipe card along with date of
alteration.

17

7) Ensure that all staff are trained to prepare dishes to the recipes of each
dish, and that the method is followed.
8) Banqueting meals should be costed in multiples of 10 portions for single
dishes such as, melon, chicken or steak etc, 50 portions for soups and
20/25 for pates and terrines.
9) Canaps should be costed in multiples of 20 portions minimum. (Note that
small canaps can be a high cost item due to preparation and content.
10) Common mistakes are over garnishing. This wastes food and will often
detract from the main part of the dish, as well as impacting on food cost.
Cost garnishes per 25/50 portions and divide down cost to single portions.
Nobody knows the cost of a single sprig of Rosemary or 2 slices of
cucumber!
11) Include in your costings an amount for wastage, (not to exceed 2%).
12) Include in your costings an amount for staff feeding, (not to exceed 3%).
13) Include in the cost of a STARTER and MAIN COURSE the cost of a
bread roll and butter.
14) Include with the cost of coffee and tea the cost of milk, sugar, mint, petit
four, biscuit or pastry (cost in multiples of 10).
15) Insist on minimum sales numbers for certain items. i.e. if you make a
terrine that contains 25 portions, 13 portions could be wasted (if not
resold) if you serve it to a dinner for 12.
16) Achievable food cost exercises need to be carried out on restaurant
breakfast, lunch and dinner buffets. (See achievable food cost exercises).
It is Best Practice that all menus are costed.

Method
Menu or dish costings should be made in multiples of 10 portions. This allows us
to gain an average, as however well people are trained and follow procedures
there will always be some variance or heavy handedness.
1) Gather ALL ingredients for 10 portions.
2) Itemise on menu costing sheet.
3) Give a weight or size to each item (kg, gram, bag, box etc). Be consistent
in your approach.
4) Cost each item on the basis of net raw weight. (See gross and net weights).
18

5) Add roll and butter (for starters and main course).


6) Add wastage.
7) Total cost for 10 portions. Divide into 1 portion.
You now have your cost per portion / menu item.
8) Calculate your selling price based on your desired food cost percentage.
(See formulas).
9) Describe method of cooking.
10) Photograph for consistent presentation standard
You have now prepared a menu-costing sheet.
Remember that if using compound dishes such as sauces or Dauphinoise
potatoes, these need to be costed separately.
Please note the following simple example
Menu
Grilled Sirloin Steak, Tomatoes, Mushrooms, French Fries, Green Beans
Ingredients, Weights and Costs
Sirloin Steak 225g x10

@ 2.55 / 225g

= 25.50

French Fries 75g x 10

@ 0.225 / 75 g

= 2.25

Green Beans 75g x 10

@ 0.32 / 75 g

= 3.20

Tomatoes x 10

@ 0.15 / each

= 1.50

Mushrooms 25g x 10

@ 0.35 / 25g

= 3.50

Red Wine Sauce


(Previously Cost)
Total Cost

@ 0.05/ portion

= 0.50
= 36.45

Therefore the cost of 1 dish is 3.645. (36.45/10)

19

To calculate the selling price of the dish assuming a food cost percentage (%) of
30 % the selling price would be:
Food Cost x 100
--------------------30

= Net selling price

3.645 x 100
---------------- = 12.15 net
30

You now have a net price. Before serving to the customer you must add VAT at
the current rate.
12.15 x 1.175 = 14.28.
Therefore in order to achieve a food cost of 30%, this example must be sold to
the customer for 14.28.
This process should be applied to all dishes whether singular or compound. If
you follow these simple steps your menu costing will be accurate.
After dish costing and dish preparation a photograph of the completed dish
should be taken and placed with the cost sheet.
It is Best Practice that a product photograph accompanies all menu-costing
sheets.

20

Sales Mix Analysis


As you will see from the table below, each food outlet within the hotel probably
has a differing food cost. This is especially true in the larger hotels. Therefore in
order to achieve the overall desired food cost, a balance needs to be achieved.
Example:- Hotel A has food sales of 50.000 per month, its food sales and
department costs are broken down as follows to achieve a food cost percentage of
26%.

Breakfast
Room Service
Restaurant 1
Restaurant 2
Bar
Banqueting
Total

Sales Mix
(%)

Total Sales
Value ()

Outlet Food
Cost %

Total Food
Cost ()

20%
10%
25%
5%
5%
35%

10000
5000
12500
2500
2500
17500
50000

15
35
28
40
35
25
26

1500
1750
3500
1000
875
4375
13000

The total food cost percentage is reached by dividing food cost by total sales
and multiplying by 100. (See formulas).
Example: - If hotel As sales mix was to change as outlined below. Note what that
change in sales mix does to the change in food cost percentage based on the same
50.000 sales.

Breakfast
Room Service
Restaurant 1
Restaurant 2
Bar
Banqueting
Total

Sales Mix
(%)

Total Sales
Value ()

Outlet Food
Cost %

Total Food
Cost ()

30
5
25
25
5
10

15000
2500
12500
12500
2500
5000
50000

15
35
28
40
35
25
27.5

2250
875
3500
5000
875
1250
13750

It can be seen that because of the drop in banqueting revenue and the increase in
revenues from restaurant 2, that the food cost has risen for hotel A by 1.5% to
27.5%.
These are two basic examples that are related to constant revenues. Also to be
taken into consideration is the rise or fall in covers within a sales outlet. The
continuing variance of covers will also affect the cost of food sold.
21

For example 100 covers for breakfast at full spend of 14.50, generates net
revenue of 1234.00.
If the breakfast spend was 6.00 per cover, 100 covers would generate 510.63
net revenue.
The examples below highlight this.
Example: - Hotel B serves 6000 covers to achieve an average spend of 12.41.

Breakfast
Room Service
Restaurant 1
Restaurant 2
Bar
Banqueting
Total

Sales Mix
(cvrs)

Average
Spend ()

1750
500
2000
500
250
1000
6000

7.5
9.5
12.5
18
2.5
22
12.41

Total
Revenue
()
13125
4750
25000
9000
625
22000
74500

Outlet
F/Cost
%
15
35
28
40
35
25
26.78

Total
Cost
()
1969
1663
7000
3600
219
5500
19951

The food cost per cover is 3.325. (19951 / 6000).


If hotel Bs covers were to increase by 10% but the average spend was to
decrease by 10% the following effect would be seen if we took the same food cost
per cover per outlet. (It is true that a menu sold at whatever price, still costs the
same to produce).

Breakfast
Room Service
Restaurant 1
Restaurant 2
Bar
Banqueting
Total

Sales Mix
(cvrs)

Average
Spend ()

1925
550
2200
550
275
1100
6600

6.75
8.55
11.25
16.20
2.25
20
11.17

Total
Revenue
()
12994
4702
24750
8910
619
22000
73975

Food
Cost per
Cover ()
1.125
3.326
3.500
7.200
0.876
5.500
3.325

Total
Cost
()
2165
1829
7700
3960
241
6050
21945

The food cost for hotel B has now risen to 29.66%, because of the movement in
business. (21945 / 73975) x 100.
Because of this, in order to achieve the same 26.78% food cost as in example 3
the Chef must try to save or adjust his overall cost by 2135.
In summary, you need to understand the rise and fall of sales mix in costs,
revenues and covers in order to explain fluctuations in food cost.

22

Gross and Net Weights.


After preparation and cooking most food products experience shrinkage.
Therefore, there is less product available to serve to the customer. To take
account of this net raw weight must be used in menu costing calculations. The
example below will highlight the difference that the gross / net variance could
show to a food cost.
Example.
Based upon a 10kg Rib of Beef costing 4.00 / kg. Total Value = 40.00
10 kg @ 4.00 kg = 40.00 divided by 40 (x 250 grm portions) = 1.00 per
portion.
After cooking the same 10 kg Rib could weigh 9 kg, (10% shrinkage). Therefore,
9kg@ 40.00 = 4.44 / kg divided by 36 (x 250grm portions) = 1.11 per portion
If this 0.11p difference in cost was multiplied at 10 covers per service (lunch and
dinner) over a whole year then undercosting would amount to 803.00 just on
this one menu item.
Therefore the rule is
Gross Raw Weight x Gross Cost
----------------------------------------Net Yield (number of portions)

= Menu Item Cost Per Portion

Another example could be as follows;


A whole fresh salmon, with head, tail and bones weighs 10 kg and costs 2.50 per
kilo. Total Cost 25.00.
If after gutting and trimming we have only 7 kg left (30% wastage) the cost per
kilo would now be 3.57. The 3.57 cost should be used in your menu cost price
calculations.

23

Achievable Food Cost Exercises


A different approach needs to be applied to the costing of restaurant buffets
(breakfast, lunch and dinner), as the food served is not of a fixed portion and
customers have the choice of eating as much or as little as they wish. Although
portion control is practiced to an extent with the Chef carving joints or serving
individual portions of chicken or salmon etc, again the customer decides more or
less how much they wish to eat.
Therefore in order to establish the AVERAGE cost of a meal served to a
customer it is necessary to calculate as accurately as possible the AVERAGE
food consumption per customer. This consumption is then applied to AVERAGE
revenue per customer or service to give an AVERAGE food cost.
The AVERAGE calculation is used, as over a period you will find that the same
amount of food is being consumed per head. The only variables to the calculation
are the net cost of food and the net selling price.
Achievable food cost exercises should be undertaken at least every 6 months as
Best Practice. Every 3 months if there is a food cost problem.

Method
1) The complete exercise will consist of quiet, moderate and busy service
periods. The hotel needs to work out what is an average amount of covers,
for a quiet, moderate and busy service. Once you have established these
averages, choose service periods where you will serve approximately this
number of covers.
2) All participating team members need to be involved and briefed on their
roles and responsibilities. Therefore good teamwork is required between
the kitchen, restaurant, F&B Management and control departments.
Decide before starting who will do what.
3) All food consumed during a service period needs to be given a value.
Therefore an opening and closing stock figure needs to be made to
calculate consumption. Values need to be given in the same manner as
individual dish costing.
4) All food items need to be counted to create an opening stock within the
department. Start with the simple things like sugar, butter, milk and
coffee. Moving on to cold buffet displays and finally hot dishes as they
leave the kitchen. Count in the same manner as you would when
stocktaking. Have previously prepared spreadsheets ready for counting.
5) As the buffet is replenished or extra items issued from stores, these items
need to be added to the stock sheets.

24

6) At the end of service count back in all food items that are left unconsumed by the customer. Give these items a value. This will be your
closing stock.
7) Calculate your opening stock, plus additions and your closing stock
figures to find your consumption. N.B. All food that is returned to the
kitchen to be used again is part of your closing stock. All wastage is part
of your consumption.
8) Establish your net food revenue for the service period. (Treat discounts
and complimentary as full price).
9) Now that you are in possession of your consumption and revenue you can
work out your food cost percentage.
Example.
Food Consumption
------------------------- x 100
Net Revenue

300.00
--------------1000.00

x 100 = 30%

10) As the AFCE is an average you will need to undertake a number of


exercises.
It is Best Practice that 3 exercises are undertaken per service as a
minimum.
Recommended - 3 lunch and 3 dinner services and 4-5 breakfast services.
11) Having completed the exercises add all your costs and revenues together
to find out your average cost.
Example.
Sample AFCE for restaurant buffet lunch over 3 service periods
Service
1
2
3
Total

Covers Served

Food Cost ()

Net Revenue
()

Food Cost %

50

133

350

38

125

303.75

843.75

36

250

459

1530

30

425

895.75

2723.75

32.88

25

You can see that the average cost of the lunch buffet for this restaurant is
32.88%, based on 3 exercises.
12) Costs will vary between services; therefore the more exercises undertaken
the more accurate your AVERAGE results will be. Agree the accuracy of
the results with the Financial Controller.
13) These exercises should be used as a guide to costing, so that the Chef is
aware of how much the buffet is costing to produce per service period. If
it is too high he needs to trim it back. However do not compromise on
standards.
14) N.B. where an a la carte menu is in operation during a buffet service. Do
not include the covers, revenue or food consumed for a la carte as this will
negate the result of purely counting the buffet.

26

Setting Menu Selling Prices


There is no hard and fast rule to set menu selling prices. The most important
thing to do is to consider all factors.

Required Food Cost %


Sales Mix
Revenue Mix
Seasonality
Fair Market Price / Value For Money
Average Spend
Potential Price Fluctuations

A practical way of seeing if selling prices generate the hotel sufficient profit is to
carry out the following exercise.
Looking at historical data (Micros / EPOS System) and your anticipated menu
sales estimate how many individual menu items you will sell over a period (4
weeks).
Menu Item Estimated Sales
1
600
2
1200
3
1000
4
600
Total
3400

Selling Price
3.50
5.50
6.00
8.75

Total Revenue Sales Mix %


2100
11
6600
33
6000
30
5250
26
19950
100

Now multiply each menu item sales mix percentage by a pre determined cost
percentage, as identified below to give a weighted cost percentage.
Menu Item

Sales Mix %

1
2
3
4

11
33
30
26
100

Menu Item Cost


%
25
45
30
30

Weighted Cost %
2.75
14.85
9
7.8
34.4

This gives an overall weighted cost of 34.4%. Therefore, if the target is 30% cost
the selling prices will either have to be increased or the cost prices reduced.
Best Practice is for the Financial Controller to undertake this exercise to review
hotel selling prices against cost percentages.

27

Forecasting and Food Cost Planning


This is a tool that is not often used to effectively control the management of food
cost. Its aim is to gear the Chef to the ordering and production of food in a
regulated manner to service customer requirements based on anticipated
business needs.
If you are a Chef ask yourself these questions:

Do I know what next weeks / months food revenue forecast is or am I just


planning to order for the number of covers I expect to serve?

How much planning do I do?

If the hotel expects to have total food revenues of 100.000 next month and is
looking to achieve a 28% food cost then the Chef has only 28.000 to spend!
How often is the revenue forecast discussed by the General Manager, Financial
Controller, F&B and C&B Managers or Revenue Manager and Chef together?
Prior to the start of each month the Chef, F&B Manager, Storeman, Buyer,
Financial Controller etc. should hold a planning meeting. Remember again that
after payroll, food purchasing is the biggest cost for the hotel.
A planning meeting will enable you to do the following
1) Maintain correct stock levels of food to within 4 days.
!

Best Practice is to have a 7-9 day average stock holding.

2) Minimise wastage by ordering and producing correct levels of food.


3) Gives suppliers maximum time to get quality and quantity correct.
4) Negotiate prices and discounts with suppliers based on volume.
5) Plan staff feeding (see below).
6) Minimise number of deliveries and invoices.
7) Review menu and dish costings.
8) Rotate menus effectively.
9) Maintain standards by using fresh commodities, therefore satisfying guest
expectations.

28

Requirements
1) Precise information about menus and contents especially banqueting.
2) Precise information about house function numbers on a particular date.
3) Past history or trend data of sales in reference to
a) Last years sales
b) Sleeper density (double occupancy)
c) Local events and promotions
4) Current statistics a) Sleeper/ Breakfast ratio weekday and weekend
b) Sleeper / Dinner ratio - weekday and weekend
c) Sleepers that will eat in banqueting
d) Sleepers that wont eat (aircrew)
e) Sleepers that eat in Executive / Club Lounge
f) Inclusive Sleepers
g) Tours
5) Sales mix pattern do not just look at today look at the next 10 days and
adjust your plans accordingly.
6) The above statistics after forecasting revenues can be used to forecast
costs for food based on the restrictions imposed by the sales mix, then set
weekly spend targets based on revenue / cost percentage.
Example
If weekly food sales are 25000 and target food cost is 30%. Then the
Chef has 7500 to spend in the week.
7) Plan to sale particular menu items on a particular day to cut down
wastage. If a function is being served chicken with mushroom sauce, put it
on the restaurant buffet and serve it to the staff. Batch cooking is one of
the most effective cost and waste control measures. (See below).
Best Practice is for the staff menu to be the same as the restaurant or
banqueting buffets.
8) Plan to make use of cheaper cuts for buffets. Casseroles, pies and stews
are widely accepted by the customer, as it is what they will eat at home.
Remember when people are away from home they want something
familiar. Most customers are not used to gourmet cuisine.

29

9) Use a weekly planner as detailed below to plan menus. It is the same as


planning a staff roster or holiday planner. Be lead by what you have to
produce. i.e banqueting menus

Restaurant
Roasts

Soup of
day

Function 1

Function 2

Staff

Monday

Beef

Tomato

Melon
Chicken
Chasseur

Tom Soup
Lamb
Cutlets

Tom Soup
Chicken
Chasseur

Tuesday

Lamb

Vegetable

Veg Soup
Roast
Lamb

Terrine
Chicken
Chasseur

Veg Soup
Roast
Lamb

Gammon

Mushroom

Sm Salmon
Chicken
Kiev

Melon
Roast Cod

Melon
Chicken
Kiev

Rib of Beef

Carrot
Soup

Haddock
Turkey

Carrot
Soup

Carrot
Soup
Turkey

Pork

Bisque

Buffet

Buffet

Bisque
Pork

Turkey

Lentil

Lentil
Steak Pie

Buffet

Lentil
Steak Pie

Beef and
Chicken

Consomm

Pork
Steaks

Consomm
Pork
Steaks

Wednesday

Thursday

Friday

Saturday

Sunday

Note that the planner can be broken down into daily service periods and can
accommodate a number of functions. You will see that the staff are being
served the same food as the customers.

30

10) Look at ways that money can be saved by not compromising on quality.
Be imaginative!
11) Accurate recipe / dish costings
Always ensure that food forecasts are net of VAT.
Ideally the food and beverage team should be planning 2-3 months in advance.
By doing this, if you know that you will have a change in sales mix, therefore
probably meaning a change in cost mix, you will be able to re-cost or adjust
menu items and re-print outlet menus. This might be a good time to install
incentives or promotions.

Review
One of the most important areas of forecasting is review. At the end of each day
or week write down the actual number of covers served and the revenue taken. If
there is a difference to your forecast find out why?
If you have a variance to your weekly food cost estimates there should be
reasons, therefore you can investigate any overspend etc.
Reviews can help the team learn and develop. Reviews also allow us to use our
experience to plan better in the future.

Points to remember when forecasting

Ask questions of reservations about large bookings with no meal


requirements at your weekly operations meeting. This is a possible sales
opportunity and could prevent a large booking turning up without being
forecasted.

Midweek demand for room service is particularly high when there are
major sporting events such as the Champions League on. Obtain a list of
fixtures and plan accordingly.

Make food cost and particularly wastage part of your daily reviews and
meetings. Put as much emphasis on it as you would payroll!

Plan ahead. Forecast in advance, react to changes in demand and business


mix. If necessary change your menus and pricing.

31

Banqueting Costing And Purchase Planning


The purchase of food for function set menus should be made consulting the
individual recipe / menu costing sheets.
As it is known how much it costs to produce each dish and therefore each
whole meal. The total cost of a menu can be established. The Chef should
regularly consult and adhere to the cosBting plans.
Example.
Menu A

Starter

Soup

Main

Dessert

Coffee

Total

Cost ()

0.95

0.77

2.85

1.43

0.35

6.35

If 125 covers were to be served at the function the Chef would have 793.75
to spend in buying produce. (125 x 6.35).

Selling Below Published Prices


If a menu is sold below its published selling price, the food cost margin will
not be achieved, therefore increasing cost and effecting profit. If a customer
wishes to pay a lower price than the stipulated menu price, the Head Chef
must be consulted and separately cost and suggest a menu that fits with his
cost structure.
Example.
If a menu containing a chicken supreme main course is costed at 5.75 and
sold at 25.00 it will have a 26% cost. The chicken cannot be replaced with
beef fillet costing 8.50, because with the same selling price the cost will be
39%.

! It is Best Practice that banqueting menus should not be sold under their
costed price. Therefore if a customer wishes to purchase at a given selling
price the Chef should be consulted to devise and cost a separate menu.

32

Peaks and Troughs Planning


To totally understand how your business should be managed, and to ensure best
presentation, best use of manpower, equipment and to reduce wastage to a
minimum, you must forecast both covers and at what time peaks and troughs
will occur.
Example.1.
Breakfast midweek Monday to Friday
Peak is 7.00 am until 8.30 am. Outside these times are troughs. Presentation
dishes for troughs should be reduced to half the size.
Chart.1.

Using this forecast you will ensure:


1) Presentation is at its best
2) Products do not deteriorate as they are not held under heat lamps
3) Wastage is reduced as you are cooking for consumption hour ahead
Do not allow the breakfast Chef to cook everything off prior to service opening.

33

Chart.2.

Peaks and troughs should be forecast on a weekly basis and actioned


accordingly. Remember 100 people might be attending a conference breakfast
and will not dine in the restaurant, or 50 people might be leaving early on a tour
bus.

34

Shopping Basket
In order to track the movement and fluctuation of price over a given period each
Head Chef, Financial Controller or F&B Controller should undertake a
shopping basket exercise.
The exercise will track the rise and fall in commodity prices and can be a tool in
setting menu selling prices, planning menu cost prices and assisting in explaining
food cost fluctuation.
It is Best Practice that the shopping basket exercise is carried out 3 monthly and
then at the input of new menus or new dishes.

Method
1) Choose a selection of ingredients (shopping basket).
2) Give a current market value. (This market value will be identified as the
starting point or 100%. On the second week or month the market values
of the same commodities will be established).
3) Calculate total cost of shopping basket.
4) On the second week do the same again. You now have 2 shopping basket
values.
5) These 2 values are then compared to each other in the form of a
percentage.
A rise in market prices will be expressed as 100%+ and have a negative effect on
cost price and a fall will be expressed as 100%- and have a positive effect on cost
price.
A minimum of 40 items should be used for the exercise and they should be
selected from commodities that have regular cost price movement (perishables).
Dry goods and goods that have a fixed annual price should not be used. Goods
with high volume and high price movement are particularly relevant. Consider
fish and vegetables out of season.

35

Example
Product

Unit

Value
Wk 1
()

Value
Wk2
()

Diff
(+/-)
()

Diff
(+/-)
(%)

Value
Wk3
()

Diff
(+/-)
()

Diff
(+/-)
(%)

Beef Fillet

Kg

9.00

9.25

0.25

2.70

9.15

0.15

1.6

Lamb
Fillet

Kg

8.50

8.50

0.00

0.00

8.34

-0.16

-1.9

Tomatoes

Box

13.00

14.50

1.50

11.53

14.75

1.75

13.46

Melons

Each

0.90

1.15

0.25

27.00

0.90

0.00

0.00

Bread

Loaf

0.45

0.45

0.00

0.00

0.45

0.00

0.00

Cheese

Kg

10.45

11.99

1.54

14.73

11.00

0.55

5.2

Potatoes

Kg

0.25

0.35

0.10

40.00

0.30

0.05

20

42.55

46.19

3.64

8.55

44.89

2.34

5.5

Total

We can see from the above example that food prices between week 1 and week 2
have risen by 8.55%. This is expressed as 108.55% to the starting point (week 1).
This means that our selected purchases are 8 % more expensive.
In week 3 prices have risen over week 1 by 5.5%. This is expressed as 105.5%.
(Please note that prices may also fall. If they fell by 5.5%, they would be
expressed as 94.5% of week 1).
Menus should be costed on week 1, therefore price rise and fall if significant
should be applied to menu price costing, in order that food cost profit can be
maintained or menu items changed. It is therefore correct to say that if prices
fall we will theoretically make a higher food cost profit. It is also correct to say
that if prices rise you should adjust your menu selling prices to reach the same
desired level of food cost %. On a weekly basis you should not expect significant
price fluctuation, however, over an extended period and due to seasonal
variations prices will go up and down.

36

Profit Maximization
Often popularity and profitability are confused. Menu items can be arranged on
a grid the so called Boston Matrix representing their performance with
regard to volume (popularity) and cash contribution (profit).
The Cash Cow: high sales and high profit contribution make this the ideal
product. It can be milked for cash, if cared for and fed regularly.
The Plough Horse: high sales and low profit contribution. It works hard but
the profits are not always immediately apparent; it will take time to reap the full
reward from this crop.
The Cuddly Panda: low sales but high profit. Lovable but elusive, it will
require careful study and special attention.
The Dodo: low sales and low profit. Probably extinct. Therefore, get it off your
menu.

High

Cash Cow

Dodo

Cuddly Panda

Popularity (sales)

Plough Horse

Low

Contribution (margin of profit)

High

37

Profit Improvement Strategy


Profit maybe enhanced by manoeuvring cash cow menu items towards the top
right of the grid. As shown in the example below. However, when considering
strategies / tactics be aware of the potential effects and possible consequences.

Low Price:
Good Value

Sought After Item and Price


Does Not Matter

Low Price But Uninteresting

Tempting But Overpriced

Evaluation
The Plough Horse
Tempting, but overpriced.

The Cash Cow


Sought after item, price does not
matter.

Maintain value, review costs


and portion size.

Warrants further promotion


and merchandising with prime
menu position.

Careful price increases through


enhanced benefits and added
value.

Price increases but with caution

Try repackaging and / or


linking

The Dodo
Low price, but uninteresting.

The Cuddly Panda


Low Price, Good Value.

Is this an old product in


decline? Can it be revamped?

Re-appraise, research (market,


raw material etc.) and try a
variety of options.

Is it a new product that needs


attention?

Increase promotions, re-style


and / or add value.

If both cash contribution and


volume remain low, it may be
wise to eliminate this product.

38

Promotions
Promotions should only be undertaken when there is an opportunity to make
incremental sales over and above normal business volumes or when you want to
drive cash cows and cuddly pandas to make incremental profits.
If you have a food cost management problem do not run a promotion if it means
buying in extra menu items over and above your norm. Promotions should be
staged from within the normal operation of the business.
The only proviso to this is when a new menu or menu items are being introduced
and a sales drive is required to initiate customer awareness.

Specials
Specials are items that the Chef is able to purchase at a more competitive oneoff price, that will facilitate the cash cow syndrome or menu items that need to
be sold before expiry dates which are cuddly pandas or dodos.
Do not put high sales and low profit plough horses on promotion.

Table dHote and Inclusive Menus


When writing Table dHote or inclusive menus always use Cuddly Pandas. The
thinking behind this is that the customer must consume the menu items that you
specify at a cost you can control.

39

Budgeting
As an outcome of the use of this Best Practice manual, food cost budgeting
should become easier and more accurate for the hotel. However, unless the
manual is used correctly it will not be an aid to budgeting.
When budgeting it is an unrealistic assumption that the food cost should remain
the same for every accounting period. Therefore, if for example the hotel is
looking to attain an annual food cost of 30% it is unrealistic to have 12
accounting periods saying that they will all be at 30% cost.
Food costs could vary dependant upon the hotel and time of year, from 18 35%
per period. Your budgets should reflect the monthly movement in sales mix. If it
does not your year end budgeted food cost will be impossible to achieve.
Your 30% total should be made up of 12 food costs of differing amounts!
When budgeting for the next financial year you should use all available data
from the EPOS, sales mix analysis, menu costing and profit maximization
exercises to set a realistically achievable budget that fits with your business
needs.
Take into account possible movements in rooms business mix. Hilton is rapidly
expanding its leisure market. Therefore, more and more sleepers will be on low
priced inclusive breakfast and dinner packages. If you do not react your food
cost will automatically move upwards.

40

Ordering, Receiving, Storage, Control and Wastage


!

Par Stocks

Must Stocks

Ordering The Purchase Cycle

Receiving and Goods In

Storage

Security and Key Control

Out of Hours Policy

Wastage and Out of Date Stock

This Section Contains KPIs

Controlled Ordering Procedure in Place

Controlled Receiving and Storage Procedure in Place

Recorded Wastage Procedure In Place

41

Par Stocks
Par Stocks are one of the most effective tools in food cost management. A par
stock is the minimum number of any product that should be kept at any one time
for normal trading patterns.
It is Best Practice that the hotel works with a recorded par food stock. If relevant
this should be per outlet. Par stocks should be based upon a maximum of 4 days
trading per average.
All Hilton nominated food suppliers deliver at least twice a week.
Food product orders should be based on the forecast of customer consumption.
For standard products work out by monitoring consumption over a monthly
period and dividing by the number of days.
Example 1.
If you use 600 loaves of bread over 30 days you consume an average of 30 per
day. Build in a 10% error factor for unexpected rises in business and you should
hold 33 loaves. If you receive 3 deliveries a week then 231 loaves are required
weekly or 77 per delivery.
Food products requiring a par stock are, but are not limited to
a)
b)
c)
d)
e)
f)

Tinned / Dry
Frozen
Breakfast Goods such as Preserves and Bacon etc
Juices
Breads
Staple menu items such as Sirloin Steaks

Consider when setting par stocks what size or weight of product needs to be
purchased. Can a smaller size be bought or can it be purchased less frequently?
Review par stocks as business demand changes. i.e. Christmas or quieter periods
such as January. The Par Stock must be flexible depending on volumes and
menu sales mix forecast and time of year.
Micros sales information on mix and volume must be used regularly to check
actual consumptions.
Too much stock will lead to wastage. Too little will lead to panic buying or
customers not having the correct product available.

42

Must Stocks
For food the must stocks are items that appear daily on your menus. These
should adhere to specification for quality, consistency and contractual
requirements.
However you should question the amount that you order. If you only average
sales of 5 Fillet Steaks per night, do not order 20 per day.
Do not order separately for banqueting, restaurants and staff. Combine your
orders and try to negotiate a better price with the supplier.
Do not use it up after. Use it at the time! This saves cost!
Items that do not appear on your menu should not be purchased. Regularly
review invoices to see what is being bought.
It is Best Practice that if food is specified, ordered, received and stored by the
same person, that invoices and control measures are audited for irregularities at
least by-weekly.
Carefully consider the purchase and use of luxury items such as Caviar, Fois
Gras and Saffron etc. Can an alternative be used without compromising on
standards?
Remember that food cost profit should be the first consideration in menu
planning.

43

Ordering The Purchase Cycle


Aim
The process of ordering sufficient food stocks to meet immediate business
requirements, ensuring the freshness and quality of all produce and
commodities.
Nominated Suppliers

Use the list of nominated food suppliers as agreed with HUKI


Purchasing Department. It is Best Practice that these suppliers must
be adhered to when purchasing food products. In many cases two
suppliers have been set up for each hotel for a particular food type
grouping. It is essential to use price lists from each of these suppliers
to obtain the most competitive price for a particular order. Any
queries regarding nominated suppliers should be directed to The Food
Supply Chain Executive, at Maple Court.

Order Sheets

Supplier order sheets should be prepared before ordering with a


supplier and kept on file to ensure that deliveries are as requested.
Ensure that the agreed price, specification and product code when
possible are entered on to the order sheets, as this will help whoever
receives goods to check for accuracy of delivery. Use of order sheets
will ensure that contents of stores and fridges will be checked, which
will lessen the possibility of wastage through over ordering.

It is Best Practice that individual supplier order sheets are used.

Supplier Schedule

A supplier delivery schedule should be on display in the kitchen at all


times to ensure that all kitchen personnel are aware of cut off dates
for orders. This will alleviate the need to use local suppliers and petty
cash if a cut off point is missed due to holidays or sickness. Try to
order as early as possible or give plenty of notice for large orders, as
this will lessen the chance of supplier shortage and having to source
alternative orders at a premium cost. Do not rely on answer phones
for suppliers, as there is no guarantee that your order has been
accepted or that product availability has been checked.

Success Criteria
a) All orders will fulfill the business requirements.
b) All commodities will be the best value for money.
44

c) Purchasing specifications are being adhered to.


d) Optimum use of deliveries from each supplier.
e) HUKI Group discounts are maximized.
f) Continuity of produce standard is maintained.

45

Receiving and Goods In


Aim
All commodities to be delivered at a time, which will facilitate correct
checking and monitoring of produce for weight, quality, temperature and
quantity against the order and delivery note, to the specifications required.
Credit Notes

If there is a discrepancy between the goods delivered and the order


sheet produced by the Chef then a credit note or goods returned note
must be obtained from the delivery company driver. Both parties
must sign these.

Delivery notes

Must be obtained for every food delivery and entered onto a


purchases received sheet in the main kitchen which can be cross
matched with all food invoices processed on Oracle by the hotel
Accounts Office.

Temperature Checks

Temperature checks must be carried out on all chilled products. (See


food safety hazard analysis document by Safety Risk Management for
minimum standards).

Weights & Measures

All deliveries must be checked against delivery notes and order sheets
to ensure that quantities and specification delivered match those that
are charged for. An appropriate set of scales should be available to
ensure all weights match delivery notes. Any deviations from the
delivery note should be recorded on a credit note / goods returned
note.

It is Best Practice that as a minimum all meat, fish and vegetables are
weighed on delivery.
Grade & Quality

All deliveries should be checked to ensure that no products are


damaged, past their sell by date or of a lower grade than ordered. Any
deviations from the delivery note should be recorded on a credit note /
goods returned note.

46

Please refer to the food safety hazard analysis manual to ensure that all
health and safety regulations are being adhered to as outlined by Safety Risk
Management at Cadogan Square.

Success Criteria
a) Guests receive a continuous high standard of fresh produce.
b) Food health and safety regulations are adhered to.
c) Suppliers are meeting hotel business demands.
d) No leakage of monies due to non-conformity of prices, quantity and
quality by suppliers.
It is Best Practice that the Head Chef has overall control and is fully responsible
for purchasing and stores.

47

Storage
Aim
To ensure that there is an adequate supply of all food items maintained for
immediate use, with the minimum loss arising from either wastage or
spoilage.
Date Coding

All meat, poultry and fish items must be date stamped before storage
to ensure that items do not pass their sell by date. Be aware that it is
an offence under the Food Safety Act 1990 to not date code / stamp.
Date coding guns and labels can be purchased through a nominated
supplier recommended by Safety Risk Management at Cadogan
Square

Temperature Checks

Must be adhered to as set out by the Safety Risk Management


department at Cadogan Square, again it is an offence not to
temperature check under the Food Safety Act 1990.

Stock Rotation

To ensure that food items do not have to be thrown away, storage of


all food products should be clear and simple with all new stock put to
the back of any storage facility. Older food should be brought to the
front to alleviate any unnecessary wastage.

Storage

All foods should be stored as recommended by suppliers and in


adherence to the guidelines set down by Safety Risk Management
department.

All foods should be decanted into suitable containers that provide


hygienic storage conditions. All open packets should be decanted and
sealed in pest proof containers.

Please refer to Food Safety Hazard Analysis Manual to ensure that all health
and safety regulations are being adhered to as outlined by Safety Risk
Management dept.

48

Success Criteria
a) Food health & safety regulations are adhered to.
b) Minimal wastage and spoilage of food produce.

49

Security and Key Control


As we have already said, Hilton Food Cost is an expensive commodity. As a
reminder Hilton UK & Ireland spend 50m per annum buying food. It therefore
needs to be looked after and be secure.
Each hotel needs to put in place security and control measures that best fit its
own operational needs. The following is a guideline to best practise;
1) Once goods have been received ensure that they are put away in suitable
storage containers.
2) All stores, fridges and freezers are locked when not in use.
3) Keys to stores and cold rooms must be kept in the kitchen during shifts
and locked away on kitchen close down. Keys should have restricted
access. A list of authorised people should be kept with the keys.
4) A formalised method of control of keys should be in place.
5) Keys must be signed in and out.
6) If locks and/or clasps are ill fitting these should be changed or repaired to
ensure effective operation.
7) Any items leaving the stores and kitchen to be transferred to other
departments must be requisitioned using the appropriate documentation.
8) The issuing and receiving departments must sign this, and the requisition
kept for stock taking departments.
9) The department and duty managers should make regular checks out of
shift, to ensure that security is maintained to doors, keys and stock.
As well as the above points the following should be agreed within the hotel and
individuals trained on their own responsibilities;
1)
2)
3)
4)
5)
6)
7)
8)

Who can purchase food?


Who can receive food goods in?
Who stores food?
Who reconciles invoices to goods in?
Who checks wastage?
Who authorises returns?
Who authorises allowances?
Who is authorised to dispose of OLD stock.

50

Out of Hours Policy


As hotels are a 24-hour operation it is impossible for our kitchens to be always
fully stocked and because of the needs and requests of customers from time to
time we will need to requisition from the stores, outside normal opening hours.
A policy needs to be agreed and implemented so as there is control out of hours.
It is not good enough to say that the stores are closed. Our customers do not
want to hear this.
It should be trained into staff that each and everyone within the Food and
Beverage Department should take responsibility for the control of stores.
At least 2 people should be present when making out of hours requisitions
1) To check stock issues for quantity.
2) To check stock issues for conformity.
3) To prevent pilferage.
People responsible can and should include the following
Head Chef and Deputies, Food and Beverage Manager and Deputies,
Management Trainees, Duty Managers, Heads of Department, Security, Duty
Food and Beverage Manager.

Kitchen Closedown
At the end of each working day a formal kitchen closedown procedure should be
in place to ensure that not only food hygiene regulations are being adhered to but
also that food is correctly stored so it can be used the next day.

Ensure all food items are cling filmed, date stamped (with 2-day shelf
life) and refrigerated.

If any food is still left in the restaurant, i.e. soup, salad bar etc, make sure
that they are brought in and samples of appropriate foods have been
taken and recorded in the food sampling folder.

Record wastage.

51

Wastage and Out of Date Stock


Wastage is the discarded element arising from the inefficient use of resources. It
will never be eliminated but can be reduced.
Keep wastage to a minimum and order effectively. Only authorise stock for
disposal as a last resort.
Check what you and your Sous Chefs do, ask questions

How often am I placing second orders?

What food is being thrown away and why?

Do my Chefs know how to carve?

Are the restaurant trained in the efficient use of the toaster and
coffee machine?

Are we cooking properly? (A roast joint sealed properly will not


only taste better but the wastage and shrinkage is significantly
reduced).

Do I regularly review the stores for stock that is either slow


moving or will soon be out of date?

Do I check expiry dates of goods on receipt?

When you return goods to suppliers, do you always check that you
receive credit notes?

It is Best Practice that invoices are not paid until Credit Notes are
received.

On delivery do you check weights? Is a 7oz Chicken Supreme


always 7oz or is it 6oz? Therefore forcing you to use more!

On delivery do you inspect quality for potential shelf life?


Remember if it is not fresh when it comes in, it will not last so long
in your stores.

It is Best Practice to return inferior quality goods.

52

Consider the following table as an aide-memoir to wastage control.


Cause

Effect

Cure

Over Buying

Slow Moving Stock


Difficulty in Control
New Rotations of Stock

Better Planning
Par Stocks for Items
Decrease Wastage

Under or Panic Buying

Higher Prices

Better Planning

Poor Storage

Quick Deterioration

Containers with Lids


Dont Over Order
Correct Storage Temp

Over Portions

Increased Usage
Poor Presentation
Stock Products

Work to Specs
Staff to Understand
Weights and Measures
Use Measured
Dispensers

A key task when looking to control wastage is to look at your most wasted or
biggest wasted items.

Can they be controlled in any way?

Can the staff be trained to waste less?

How often during a breakfast service do you check how much coffee
and bread is wasted?

Undertake a waste control exercise. Empty the refuse bins at the end
of service and analyse what has been wasted!

53

People

Recruitment and Training

Balanced Scorecard

Job Sharing and De Skilling

Colleague Feeding

This section contains KPIs

Colleague feeding meeting Hilton People standard

Staff training and knowledge

54

Recruitment and Training


One of the most important aspects of todays Chef is his ability to control and
manage costs. The misconception when new employees are recruited is that they
only need to be able to cook and / or prepare food.
In todays changing environment the Chef is one of the key drivers to business
success and profitability, therefore, when recruiting for new employees the
following needs to be considered;
1) Has the candidate a good command of the language?
2) Has the candidate a good level of mathematical understanding?
3) Has the candidate potential for management development?
4) Will he / she be able to understand and solve reasonably complex business
problems given training?
5) Has the candidate the ability to learn and develop under training?
6) Is the candidate responsible enough to take on responsibility?
This simple approach will enable the Executive Chef to delegate responsibilities
and give accountability to other members of his team. Therefore enabling him to
concentrate on the more strategic aspects of the job.
If in doubt set your new recruits tests that relate to their job function. Quite
simply check that they can use a weighing scale, check that they can check an
invoice, check that they have an understanding of portion control.
It is Best Practice that all kitchen personnel can calculate a food-selling price
given a set cost price.
Once recruited training is the element that binds everything together. It is an
essential business need. The more time you expend on the training and
development of your team the greater the business success you will achieve.
Not enough time is not an excuse. All elements in this document are designed to
help achieve Optimum Food Cost. A Head of Department will not achieve this
alone, it will only be achieved through teamwork and the understanding of all
the various areas.

55

TBS Training
Effective Food Cost Control should be included as part of the training and
review process within your department. As we have said being a Chef is not just
about cooking and hygiene. It should form a basis for more in depth training in
the future.
It is Best Practice that all kitchen personnel are trained on this manual.

Balanced Scorecard
It could be argued that effective food cost management is related to a balanced
scorecard approach as championed by the company. Success will be achieved by
placing equal importance on the four core values of

People, Customer, Quality, Profit

Each is a key-determining factor within your operation and each must take equal
importance within your operation.

People recruit, train and develop

Customer give quality, value and respect

Quality maintain consistency

Profit develop, control and reinvest

Job Sharing and De-Skilling


Before any recruitment takes place, analyse the requirements of a job. In the
current climate we all know that it is difficult to recruit skilled Chefs. However,
is it always necessary to recruit skilled Chefs on a full-time basis.
A lot of functions within the food operation can be given to less skilled staff. With
a little training they can undertake a lot of the basic mis-en-place that takes up
so much time. Think about how this could impact on your business.
Examples of jobs that can be de-skilled are

Salad Prep and Sandwich Prep

Vegetable Prep and Vegetable Cooking

And many functions that require basic chopping, cutting and slicing

Use the skills of the Chefs to cook and finish.

56

Colleague Feeding
Aim
To ensure that quality and choice expectations of all our colleagues are met
and the cost of production can be greatly reduced through menu forward
planning. Staff feeding will be the same standard as that of our customers. A
fixed rotational menu will be applied having reflected time of year and ethnic
backgrounds. If your hotel is small and serves a limited amount of staff food
the matrix in the food forecasting and planning section should be applied.
Please contact Group Human Resources Department at Maple Court for
standards of staff food required and entitlements for all contract types
including live-in staff.
Food & beverage machines There are currently various machines available
from Coca Cola Enterprises Ltd. Call Group Purchasing Department at
Maple Court for the latest specifications and prices available.

Success Criteria
a) Colleagues are contented with choice and quality.
b) Viewpoint result constantly moving forward.
c) Minimum cost and wastage achieved.
It is Best Practice and the Hilton people standard that colleagues receive as a
minimum.

Breakfast Cereals, Toast, Tea and Coffee

Lunch and Dinner a selection of hot and cold dishes are offered to
suit cultural tastes as appropriate and includes a vegetarian option.
All dishes are nutritious and wholesome. (Typical dishes include: meat
or fish with potato, vegetables, vegetarian options, salad items, cold
meats, cheeses, fresh bread and butter).

57

Revenue Control and Yield Management

Revenue Control

Revenue Capture

Reports Schedule

Reports Index

Covers Definition

Nominal Code Definition

Food Tracker

Stocktaking

Table Management and Food Presentation

Sharing Information

Optimum Food Costing

This section contains KPIs

Effective revenue control in place

Table Management procedures in place

Stocktaking regular and accurate

58

Revenue Control
Aim
To ensure we are maximising all food revenue segments and any gross profits
associated with them and capturing all relevant data to enable analysis of our
business so that we can make strategic and informed decisions.
Epos Analysis

It is essential that management review all available reports so that


business decisions can be based on factual information. Menu
choices and planning can be based on actual sales achieved to
avoid wastage and spoilage.

Promotions / Vouchers

Any food dishes that are discounted or are free of charge to the
customer should be tracked so the Accounts Office can charge the
cost to marketing expenses and credit the food stock account.

Management Account

All items that are used by management or staff should be


authorised and tracked so that the Accounts Office can charge to
hotel expenses and credit the food stock account.

Allocations

These should be in line as per HUKI instructions. Please contact


your Regional Director of Finance for up to date standard
allocations.

Retrospective Discounts

These are credited by HUKI for quantities purchased from


nominated food suppliers. These can be checked by the Accounts
Office through supplier invoice listings reports produced through
Oracle financials.

Allowances

All revenue that is allowed off the daily revenue should be


documented and authorized by Financial Controller. A running
total should be tracked by the Accounts Office so that these can be
reviewed in conjunction with the monthly food cost result and help
identify any training needs or issues within departments.

59

Reports

Various Fidelio reports can be printed to help ensure that guest


packages are reviewed and can be charged accordingly at different
meal periods. There are many Micros reports available to analyze
revenue and dish favorites. Please see reports section for a list
available.

Guest Key Cards

Staff should examine these for every meal period to ensure that the
correct charge is raised to the correct guest.

Lost / Leaked Business

A cross matching of revenues and covers should be carried out by


the kitchen to ensure that numbers charged are the same as
numbers that actually dined. This will help identify if all exclusive
guests and additional guests are being charged for. A review of
actual sales reports against forecasted sales will pinpoint any
discrepancies.

Success Criteria
a) All HUKI Group discounts are being maximized through nominated food
suppliers.
b) All revenue is captured and gross profits are maximized.
c) Informed decisions can be made from accurate data capture.
d) Mystery customer result standards are achieved through correct billing.
Wastage and spoilage can be reduced from dishes that are proven sellers
All the above revenue control measures are Best Practice

60

Revenue Capture
To ensure that all food services provided to our guests are charged for it is
essential to put in place basic revenue capture measures. Many control
mechanisms are already set up within Fidelio and the various EPOS systems
within the company such as Micros and Remanco.
It is vital that EPOS systems are used to their full potential by ensuring every
employee has their own system key. This will enable management to track
training needs and sales performances by employee. It will also ensure that there
is a segregation of duties for departmental cashing up. Keys should be assigned
with the relevant system responsibilities per employee depending on job title and
position.
It is imperative to have an EPOS champion per hotel so that the system database
is current and correct for items and prices, otherwise use of open food &
beverage sales keys will occur, rendering any data analysis useless for
stocktaking, tracking sales trends, menu costing, menu engineering and staff
performance incentive schemes.
It is Best Practice that all dishes set up on the EPOS system match the hotel
menus and menu prices to eliminate the use of the open food key button.
Revenue is charged correctly and that all historical data is accurate and will
assist in making strategic business decisions based on fact.
The Management Team should monitor use of voids, open checks and cancelled
checks to eliminate any possible foul play and to ensure that staff can be
identified if they are having legitimate problems with using the system.

61

Key Responsibilities
Below is a table listing employee responsibilities for the EPOS system.
Job Title
Waiter / Barman

Supervisor

Outlet Manager

Duty Manager

Night Auditor

User Level
Server

Supervisory

Management

Management

Management

Definition
Able to post and cash off
items on the system.
At end of shift can only
produce a report to
enable the balancing of
room charges and credit
cards. NOT CASH.
Able to post and cash off
items. Able to void
transactions. At end of
shift can only produce a
report to enable
balancing of room
charges and credit cards.
NOT CASH.
Able to post and cash off
items. Able to void
transactions. At end of
shift can produce a
report summary to
balance all payment
types.
Able to post and cash off
items. Able to void
transactions. At end of
shift can produce a
report summary to
balance all payment
types.
Able to post and cash off
items. Able to void
transactions. At end of
shift can produce a
report summary to
balance all payment
types.

62

Remember that it is essential that there is segregation of duties in place so that


no member of staff can reconcile their own cash takings. In many hotels a Duty
Manager will sign for a pay-in once it has already been completed. This is not
acceptable as they are only signing to say that the member of staff has reconciled
their own takings.

Meal Plan Reports


The Fidelio system produces meal plan reports for the breakfast and dinner
service periods. This will highlight which guests are on an inclusive package and
those who are not. The restaurant should use this report to tick off each guest
who dines in the restaurant to ensure they are charging all non-inclusive guests
for their meals. This report should be attached to the restaurant pay-in for
breakfast and dinner so that reconciliation can be carried out by the Reception
Staff, Night Auditor and Income Auditor so that any possible missed revenue can
be posted to the guests room account.

Function / Meeting Charges


Function and meeting charging should be treated no differently to charges
posted to guest bedrooms. You must ensure that a delegate or organiser is
presented with a charge docket if they require an extra pot of tea or coffee. Many
hotels do not have their meeting or banqueting department set up as outlets on
their EPOS systems so a manual number cheque pad should be used then posted
by Reception.
To assist in capturing possible lost revenue it is imperative that there is a line of
communication between meeting organisers and hotel staff to ensure that any
delegates above the contracted numbers are charged for.
Restaurant staff should liase with the C&B Sales Department to ensure numbers
for lunch and dinner match the final numbers discussed at the Meet and Greet
with the organiser in the morning. This will ensure extra diners are charged and
not just processed as inclusive.

63

Financial Responsibilities Checklist


Use the following checklist to assess how you are helping the Management Team
to successfully control Food Cost Management.

Epos System
1. Are all menu items on EPOS system and correctly priced?
2. Are the Open Food & Beverage keys disabled?
3. Are reports generated and monitored for Voids, Open Checks etc?
4. Are all employees on system current and have relevant responsibilities?
5. Are there enough members of the Management Team with good system
knowledge in case of sickness or staff turnover?
6. Are departmental pay-ins authorized and checked by the Management Team
with no member of staff being able to reconcile their own cash takings?
7. Has the No Sale button been removed from the tills?
8. Are all items on system set up for the correct sales categories?
E.g. Is a cup of coffee coded to food sales?
9. Are daily saves completed by Night Audit?
10. Are touch screen pads in outlets user friendly for staff to use correctly?

Revenue Control
1. Are guests asked to produce proof of a signed room key card when ordering
items in the F&B outlets?
2. Are reconciliations carried out to ensure that revenue matches food orders
taken in the kitchen?
3. Are Meal Plan reports used to ensure correct charging of inclusive and
exclusive diners? Are these reports attached to departmental pay-ins so Night
Audit and Income Auditor can check them?
4. Are delegate numbers checked and recorded in the restaurant or meeting
rooms to ensure additional attendees are charged?
5. Are all complimentary items authorized with a Management signature?
6. Are all discounts recorded on a Revenue Deduction sheet and credited to Cost
of Sale account and debited to Expense accounts?

Reports
1. Is a Daily Food Cost Tracker sheet completed and issued daily to the
Management Team?
2. Is a Daily Actual Revenue & Covers report issued to the individual outlets
daily?
3. Is a Weekly and Monthly sales forecast issued to the individual outlets?
4. Is a Food Supplier Usage sheet completed and issued daily to the chef?
5. Is a monthly Food Cost result completed and issued to the chef with a full
breakdown of revenues, stock values and credits?
6. Is chef issued with a General Ledger Account (180 characters) report so he
can check all invoices coded, and credits given for the Food Cost of Sale account?

Miscellaneous
1. Does the closing stock value generated from the stock sheets match the figure
on the Balance Sheet?
2. Are all Food Invoice Batch headers signed and authorized in accordance with
64

Segregation of Duties?
3. Are prices updated regularly on the stock sheets to give a true valuation of the
closing stock value?
4. Is the chef assisted at month end by a member of the Management Team when
counting physical stock?
5. Have you checked that there are full menu costing sheets for every dish served
in the hotel and that these have been reviewed quarterly to ensure that they are
relevant?
6. Are all delivery notes, un-batched invoices & credit notes accrued at month
end into the Food Cost of Sale account?
7. Are all suppliers used by chef nominated?
8. Is there a good mix of use between the two nominated suppliers for a main
food grouping to ensure that the hotel is buying at the most competitive price?
E.g. Are the two nominated meat suppliers bidding for business with cheaper
prices than their competitor?

65

Reports
It is essential that as a business we are able to analyse all available data. This will
enable informed decisions to enhance our business. With such a diverse portfolio
of hotels encompassing many different food outlets and staff positions it would be
wrong to say that one solution will meet all needs. However the main
fundamentals of reporting will be very similar throughout the group.
The hotel should be using various reporting tools to help: a)
b)
c)
d)
e)
f)
g)
h)

Analyse what sells and what does not.


Are all prices on system correct and regularly checked.
Show what guest entitlements are per meal period.
Quick pointer for guest names at meal periods to meet Brand Standards.
Reconcile revenues and covers.
Look at voided transactions for security.
Monitor promotions and allowances.
Produce stocktaking results.

The above are fundamental in controlling revenue and cost of sale and should be
readily available and utilised by as many departments as possible.
Unfortunately within the portfolio of hotels there are many different IT systems
and versions to control our food outlets such as Micros, Remanco, Fidelio F&B
and Uniwell, but all of these systems are capable of producing data to help run
the business.
The system manuals should be checked to see what is available and then a table
produced for what each hotels individual requirements are, who needs them and
at what time.
The following reports section list reports available on Micros. As stated above a
reports schedule should be drawn up and issued for other systems.

66

Financial Controller
Report Schedule
Title
Revenue Report
Off Line Payments
Food Discounts
Beverage Discounts
Outlet Transfers
Micros/Fidelio Balance
Revenue Centre Financial
Serving Period Financial
System Financial
Payment
Employee Closed Check Report

Frequency
Daily
Daily
Daily
Daily
Daily
Daily
Daily
Daily
Daily
Daily
Daily

Revenue Report
Off Line Payments
Food Discounts
Beverage Discounts
Outlet Transfers

Weekly
Weekly
Weekly
Weekly
Weekly

Micros/Fidelio Balance
Revenue Centre Financial
Serving Period Financial
System Financial Report
Major Group Cost Report
Family Group Cost Report

Weekly
Weekly
Weekly
Weekly
Weekly
Weekly

Revenue Report
Off Line Payments
Food Discounts
Beverage Discounts
Outlet Transfers

Monthly
Monthly
Monthly
Monthly
Monthly

Micros/Fidelio Balance Report


Revenue Centre Financial
Serving Period Financial
System Period Financial
Major Group Cost Report
Family Group Cost Report

Monthly
Monthly
Monthly
Monthly
Monthly
Monthly

Menu Item Cost Report

Monthly

Content
Breakdown of revenue centres
Any off line payments used
Any discounts given on food
Any discounts given on beverage
Transfers between revenue centres
Revenue balances into Fidelio
Total days business by revenue centre
As above except by serving period
As above consolidated
All payments that have been used
See how checks are opened/closed
Weekly breakdown of revenue centres
Weekly summary of any off line payments
Weekly summary of any food discounts given
Weekly summary of any beverage discounts given
Weekly summary of transfers between beverage
centres
Weekly summary of balances in fidelio
Weekly summary business by revenue centre
Weekly summary as above except by serving period
Weekly summary as above except consolidated
Weekly breakdown of sales with attributed costs
Weekly breakdown of sales with costs in groups starters, main, sides etc
Monthly breakdown of revenue centres
Monthly summary of any off line payments
Monthly summary of any food discounts given
Monthly summary of any beverage discounts given
Monthly summary of any transfers between revenue
centres
Monthly summary of balances in fidelio
Monthly summary and business revenue centre
Monthly summary as above except by serving period
Monthly summary as above except consolidated
Monthly breakdown of sales with attributed costs
Monthly breakdown of sales with costs by group e.g.
starters/sides/mains
Monthly report showing by revenue centre menu item
costing

67

Chef
Report Schedule
Title

Frequency

Content

Food Discounts
Revenue Centre Financial

Daily
Daily

Food Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Weekly
Weekly
Weekly
Weekly

Weekly breakdown of any food discounts


Weekly summary of business by revenue centre
Weekly breakdown of sales with attributed costs
Weekly breakdown of sales with costs in groups e.g.
starters/main/sides etc

Food Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Monthly
Monthly
Monthly
Monthly

Menu Item Cost Report

Monthly

Monthly summary of any food discounts given


Monthly summary of business by revenue centre
Monthly breakdown of sales with attributed costs
Monthly breakdown of sales with costs by group
e.g. starters/sides/mains etc
Monthly report showing by revenue centre menu
item costing

Any discounts given on food


Total days business by Revenue centre

Food and Beverage Manager


Report Schedule
Title

Frequency

Content

Food Discounts
Beverage Discounts
Revenue Centre Financial

Daily
Daily
Daily

Food Discounts
Beverage Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Weekly
Weekly
Weekly
Weekly
Weekly

Weekly breakdown of any food discounts given


Weekly breakdown of any beverage discounts given
Weekly summary of business by revenue centre
Weekly breakdown of sales with attributed costs
Weekly breakdown of sales with costs in groups e.g.
starters/main/sides etc

Food Discounts
Beverage Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Monthly
Monthly
Monthly
Monthly
Monthly

Menu Item Cost Report

Monthly

Monthly summary of any food discounts given


Monthly summary of any beverage discounts given
Monthly summary of business by revenue centre
Monthly breakdown of sales with attributed costs
Monthly breakdown of sales with costs by group
e.g. starters/sides/mains etc
Monthly report showing by revenue centre menu
item costing

Any discounts given on food


Any discounts given on beverage
Total days business by Revenue centre

68

Bars Manager
Report Schedule
Title

Frequency

Content

Beverage Discounts
Revenue Centre Financial

Daily
Daily

Beverage Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Weekly
Weekly
Weekly
Weekly

Weekly breakdown of any beverage discounts given


Weekly summary of business by revenue centre
Weekly breakdown of sales with attributed costs
Weekly breakdown of sales with costs in groups e.g.
starters/main/sides etc

Beverage Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Monthly
Monthly
Monthly
Monthly

Menu Item Cost Report

Monthly

Monthly summary of any beverage discounts given


Monthly summary of business by revenue centre
Monthly breakdown of sales with attributed costs
Monthly breakdown of sales with costs by group
e.g. starters/sides/mains etc
Monthly report showing by revenue centre menu
item costing

Any discounts given on beverage


Total days business by Revenue centre

Restaurant Manager
Reports Schedule
Title

Frequency

Content

Food Discounts
Beverage Discounts
Revenue Centre Financial

Daily
Daily
Daily

Food Discounts
Beverage Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Weekly
Weekly
Weekly
Weekly
Weekly

Weekly breakdown of any food discounts given


Weekly breakdown of any beverage discounts given
Weekly summary of business by revenue centre
Weekly breakdown of sales with attributed costs
Weekly breakdown of sales with costs in groups e.g.
starters/main/sides etc

Food Discounts
Beverage Discounts
Revenue Centre Financial
Major Group Cost Report
Family Group Cost Report

Monthly
Monthly
Monthly
Monthly
Monthly

Menu Item Cost Report

Monthly

Monthly summary of any food discounts given


Monthly summary of any beverage discounts given
Monthly summary of business by revenue centre
Monthly breakdown of sales with attributed costs
Monthly breakdown of sales with costs by group
e.g. starters/sides/mains etc
Monthly report showing by revenue centre menu
item costing

Any discounts given on food


Any discounts given on beverage
Total days business by Revenue centre

69

Index

Daily Reports
-

Overview of reports and who should receive the reports


that can be pulled off by the Night Auditor at the end of the day.

Weekly Reports
Overview of reports and who should receive the reports
that can be pulled off by the Night Auditor at the end of the
week. (There are two additional reports from those pulled off
on a daily basis).

Monthly Reports
Overview of reports and who should receive the reports
that can be pulled off by the Night Auditor at the end of the
week. (There is one additional report from those pulled off
on a daily basis).

Miscellaneous Reports
Overview of additional miscellaneous reports, which can be
used by various Heads of Departments

70

Daily Micros Reports


The reports in the following section are printed every night by the Night Auditor.
This section identifies the areas of importance that should be looked at and who
should be using them. Examples of some of these reports can be found in the
appendix.

71

Daily Reports

2.
3.
4.
5.
6.
7.

Report Name
Revenue Report - System Wide - Major
Group
OffLine Payments - System Wide
Food Discounts - System Wide
Beverage Discounts - System Wide
Outlet Transfers - System Wide
Micros/Fidelio Balance Report - System Wide
Revenue Centre Financial Report

8.
9.
10.

Serving Period Financial Report


System Financial Report - System Wide
Payment Report

1.

To Whom
FC/Hotel Micros Project Mgr
(MPM)
FC
FC/Chef/F&B Mgr/Rest. Mgr
FC/F&B Mgr/Bars Mgr
FC
FC/GM/MPM
FC/Rest Mgr/Bars Mgr/F&B
Mgr/Chef
FC
FC
FC

1.
Revenue Report - System Wide
This report shows revenue, by revenue centres (e.g. Restaurant, Bar, Room Service and
Conference and Banqueting).
The revenue shown is broken down further into meal periods of the different revenue
centres.
Within each revenue centre/meal period you can see the major groups (e.g. food, beverage,
wine, tobacco/miscellaneous and tips.
The final column shows the number of covers for a revenue centre, by meal period
Points to note -

2.
Offline Payments - System Wide
This report shows any offline payments that have been used.
The revenue centres and meal periods are shown down the left hand side of the report, and
the different types of offline payments are shown going across the report (e.g. cash, cheque
etc)
Points to note - Offline payments should only be made when the interface between Micros
and Fidelio is down. The revenue on this report should be posted manually into
Fidelio.

3.
Food Discount Report - System Wide
This report shows any food discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).

72

4.
Beverage Discount Report - System Wide
This report shows any beverage discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).

5.
Outlet Transfers - System Wide
This report shows any transfers that have been made from one revenue centre to another.
The revenue centres and meal periods are shown down the left hand side of the report, and
the transfers in/transfers out are shown going across the report

6.
Micros/Fidelio Balance Report - System Wide
This report shows the balance which has been posted into Micros to Fidelio.
The revenue centres and meal periods are shown down the left hand side of the report.
Across the report shows revenue by major groups (food, beverage, wine,
tobacco/miscellaneous and tips, with a total revenue column.
The column showing inclusives should be looked at and analyzed carefully. These are
extracted from the Fidelio balance.
Transfers in/out, covers and voids (voids from previous rounds in the Bar, menu item
voids) can also be seen in this report

7.
Revenue Centre Financial Report - Revenue Centre Wide
This report shows the total business by day for that particular revenue centre. The report
is a full breakdown which incorporates net sales, service charge, total revenue, discounts,
voids, checks that have begun, transferred in, paid and transferred out.
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per guest,
number of checks and average spend per check.
The breakdown at the bottom of the report is the same information that the User pulls off
at the end of shift report to cash up. This information includes payments, discounts, and
total sales.
Points to note - Voids should be checked on a daily basis to assess lost revenue, food and
service quality and possible training needs.
- Error corrects and cancels should be checked to assess training needs.

73

8.
Serving Period Financial Report - By Shift
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
This information is by serving periods.
Points to note - This information assess results by individual shifts. If there are any
concerns regarding the previous points then this report should be checked to
see which shifts are the cause.

9.
System Financial Report - System Wide
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
This information is for the system.

10. Payment Report - System Wide


This report shows any payments that have been used.
The revenue centres and meal periods are shown down the left hand side of the report, and
the different types of payment are shown going across the report (e.g. cash, cheque etc)

74

Weekly Micros Reports


Weekly Micros reports should be printed on the Thursday night each week after
the end of day reports. This allows us to compare food & beverage results on
Micros with those posted onto Fidelio. Examples of some of these reports can be
found in the appendix.

75

Weekly Reports
Report Name

To Whom

1.

Revenue Report - System Wide - Major Group

2.
3.
4.
5.
6.
7.

OffLine Payments - System Wide


Food Discounts - System Wide
Beverage Discounts - System Wide
Outlet Transfers - System Wide
Micros/Fidelio Balance Report - System Wide
Revenue Centre Financial Report

8.
9.
10.

Serving Period Financial Report


System Financial Report - System Wide
Major Group Cost Report - Revenue Centre
Wide
Family Group Cost Report - Revenue Centre
Wide

FC/Hotel Micros Project Mgr


(MPM)
FC
FC/Chef/F&B Mgr/Rest. Mgr
FC/F&B Mgr/Bars Mgr
FC
FC/GM/MPM
FC/Rest Mgr/Bars Mgr/F&B
Mgr/Chef
FC
FC
GM/FC/Chef/F&B Mgr/Bars Mgr/
Rest Mgr
GM/FC/Chef/F&B Mgr/Bars Mgr/
Rest Mgr

11.

1.
Revenue Report - System Wide
This report shows revenue, by revenue centres (e.g. Restaurant, Bar, Room Service and
Conference and Banqueting).
The revenue shown is broken down further into meal periods of the different revenue
centres.
Within each revenue centre/meal period you can see the major groups (e.g. food, beverage,
wine, tobacco/miscellaneous, and tips
The final column shows the number of covers for a revenue centre, by meal period

2.
Offline Payments - System Wide
This report shows any offline payments that have been used.
It should be noted that offline payments should only be made when the Front Office
interface is down. If this report is showing offline payments, it should be checked very
carefully the reason for these.
The revenue centres and meal periods are shown down the left hand side of the report, and
the different types of offline payments are shown going across the report (e.g. cash, cheque
etc)

3.
Food Discount Report System Wide
This report shows any food discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).

76

4.
Beverage Discount Report - System Wide
This report shows any beverage discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).

5.
Outlet Transfers - System Wide
This report shows any transfers that have been made from one revenue centre to another.
The revenue centres and meal periods are shown down the left hand side of the report, and
the transfers in/transfers out are shown going across the report

6.
Micros/Fidelio Balance Report - System Wide
This report shows the balance, which has been posted into Micros to Fidelio.
The revenue centres and meal periods are shown down the left hand side of the report.
Across the report shows revenue by major groups (food, beverage, wine,
tobacco/miscellaneous and tips, with a total revenue column.
The column showing inclusives should be looked at and analyzed carefully. These are
extracted from the Fidelio balance.
Transfers in/out, covers and voids (voids from previous rounds in the Bar, menu item
voids) can also be seen in this report

7.
Revenue Centre Financial Report - Revenue Centre Wide
This report shows the total business by day for that particular revenue centre. The report
is a full breakdown, which incorporates net sales, service charge, total revenue, discounts,
returns, voids, checks that have begun, transferred in, paid and transferred out.
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per guest,
number of checks and average spend per check.
The breakdown at the bottom of the report, is the same information that the user pulls off
at the end of shift report to cash up. This information includes payments, discounts and
total sales.

8.
Serving Period Financial Report - By Shift
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
This information is by serving periods

77

9.
System Financial Report - System Wide
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
This information is for the system.

The following two reports are additional reports that are pulled off weekly

10. Major Group Cost Report - Revenue Centre Wide


This report highlights costs by the major groups (food, beverage, wine,
tobacco/miscellaneous)
The major groups are shown down the left hand side of the report, with sub totals
underneath each major group shown.
The weekly sales figures are shown in the first column, followed by the sales mix
percentage.
The weekly costings, together with the weekly cost mix percentage are then shown, together
with the weekly gross margins.
Other information shown at the bottom of the report includes the total sales count, total
gross sales, total preparation count and total preparation cost.

11. Family Group Cost Report - Revenue Centre Wide


The information shown in this report is in an identical format to the major group cost
report (10),
This is for the family groups within the system e.g. starters, mains, grills, whiskey, soft
drinks etc.

78

Monthly Micros Reports


Monthly Micros reports should be printed on the last day of every month. These
reports consolidate each days information into one final selection of reports,
which can be used to assess the performance of the food & beverage team.
Examples of some of these reports can be found in the appendix.

79

Monthly Reports
Report Name
1.

Revenue Report - System Wide - Major Group

2.

OffLine Payments - System Wide


Food Discounts - System Wide
Beverage Discounts - System Wide
Outlet Transfers - System Wide
Micros/Fidelio Balance Report - System Wide
Revenue Centre Financial Report

4.
5.
6.
7.
8.
9.
10.
11.
12.

Serving Period Financial Report


System Financial Report - System Wide
Major Group Cost Report - Revenue Centre
Wide
Family Group Cost Report - Revenue Centre
Wide
Menu Item Cost Report - Revenue Centre
Wide

To Whom
FC/Hotel Micros Project Mgr
(MPM)
FC
FC/Chef/F&B Mgr/Rest. Mgr
FC/F&B Mgr/Bars Mgr
FC
FC/GM/MPM
FC/Rest Mgr/Bars Mgr/F&B
Mgr/Chef
FC
FC
GM/FC/Chef/Bars Mgr/Rest
Mgr/F&B Mgr
GM/FC/Chef/Bars Mgr/Rest
Mgr/F&B Mgr
GM/FC/Chef/Bars Mgr/Rest
Mgr/F&B Mgr

1.
Revenue Report - System Wide
This report shows revenue, by revenue centres (e.g. Restaurant, Bar, Room Service and
Conference and Banqueting).
The revenue shown is broken down further into meal periods of the different revenue
centres.
Within each revenue centre/meal period you can see the major groups (e.g. food,
beverage, wine, tobacco/miscellaneous, and tips
The final column shows the number of covers for a revenue centre, by meal period

2.
Offline Payments - System Wide
This report shows any offline payments that have been used.
It should be noted that offline payments should only be made when the front office
interface is down. If this report is showing offline payments, it should be checked very
carefully the reason for these.
The revenue centres and meal periods are shown down the left hand side of the report,
and the different types of offline payments are shown going across the report (e.g. cash,
cheque etc)

3.
Food Discount Report - System Wide
This report shows any food discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report,
and the different discount types are shown going across the report (e.g. HR11, Business
Privilege.

80

4.
Beverage Discount Report - System Wide
This report shows any beverage discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report,
and the different discount types are shown going across the report (e.g. HR11, Business
Privilege.

5.
Outlet Transfers - System Wide
This report shows any transfers that have been made from one revenue centre to
another.
The revenue centres and meal periods are shown down the left hand side of the report,
and the transfers in/transfers out are shown going across the report

6.
Micros/Fidelio Balance Report - System Wide
This report shows the balance, which has been posted into Micros to Fidelio.
The revenue centres and meal periods are shown down the left hand side of the report.
Across the report shows revenue by major groups (food, beverage, wine,
tobacco/miscellaneous and tips, with a total revenue column.
The column showing inclusives should be looked at and analyzed carefully. These are
extracted from the Fidelio balance.
Transfers in/out, covers and voids (voids from previous rounds in the Bar, menu item
voids) can also be seen in this report

7.
Revenue Centre Financial Report - Revenue Centre Wide
This report shows the total business by day for that particular revenue centre. The
report is a full breakdown, which incorporates net sales, service charge, total revenue,
discounts, returns, voids, checks that have begun, transferred in, paid and transferred
out.
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per
guest, number of checks and average spend per check.
The breakdown at the bottom of the report is the same information that the user pulls
off at the end of shift report to cash up. This information includes payments, discounts,
and total sales.

8.
Serving Period Financial Report By Shift
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
This information is by serving periods

81

9.
System Financial Report - System Wide
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
This information is for the system.

10. Major Group Cost Report - Revenue Centre Wide


This report highlights costs by the major groups (food, beverage, wine,
tobacco/miscellaneous)
The major groups are shown down the left hand side of the report, with sub totals
underneath each major group shown.
The weekly sales figures are shown in the first column, followed by the sales mix
percentage.
The weekly costings, together with the weekly cost mix percentage are then shown,
together with the weekly gross margins.
Other information shown at the bottom of the report includes the total sales count, total
gross sales, total preparation count and total preparation cost.

11. Family Group Cost Report - Revenue Centre Wide


The information shown in this report is in an identical format to the major group cost
report (10),
This is for the family groups within the system e.g. starters, mains, grills, whiskey, soft
drinks etc.

The following report is an additional report that is pulled off monthly

12. Menu Item Cost Report - Revenue Centre Wide


This report shows by revenue centre a menu item costing for each menu item that is in
that particular revenue centre.
The menu items/record number is shown down the left hand side of the report.
The columns across the top of the report show from left to right, price, monthly quantity
sold, monthly sales totals of that particular item, monthly quantity percentage, monthly
sales mix percentage, menu item cost, monthly quantity prepared, monthly cost total,
monthly quantity cost percentage, monthly cost mix percentage and monthly gross
margins

82

Miscellaneous Micros Reports


There are a number of miscellaneous reports available in Micros. There is also
the opportunity to have other reports programmed for specific needs. Examples
of the following reports can be found in the appendix.

83

Miscellaneous Reports
Report Name
A.

Revenue Centre Item Sales Report

B.

Revenue Centre Item Cost Report

C.

System Menu Item Sales Report

D.

Menu Engineering Report

E.
F.
G.

Employee Closed Check Report


Employee Financial Report
Time Period Summary

To Whom
Chef, GM, FC, Restaurant/Bars
Mgr
Chef, GM, FC, Restaurant/Bars
Mgr
Chef, GM, FC, Restaurant/Bars
Mgr
Chef, GM, FC, Restaurant/Bars
Mgr
FC, Restaurant/Bars Mgr
Restaurant/Bars Mgr
Restaurant/Bars Mgr

A. Revenue Centre Item Sales Report


B. Revenue Centre Item Cost Report
These reports highlight the menu items sold by revenue centre. You can select all of the
revenue centres (system wide) or one particular revenue centre e.g. restaurant
The menu item number and menu item names are shown down the left hand side of the
report.
The columns across the report are as follows: 1) Price - Selling price of the item
2) Current Qty Sold - Quantity of that particular item that has been sold
3) Current Sales Total - Selling price x the quantity sold
4) Current Qty % - Percentage as a quantity against the total mix
5) Current Sales Mix % - Percentage as a sales figure against the total mix
6) Item Cost - If the costings of the items have been put in the price file in the
configuration these will show in this column
7) Current Qty Prep - Quantity of the item that has been prepared by the Kitchen
8) Current Cost Total - Qty prepared x item cost
9) Current Qty % - Percentage as a quantity against the total mix

C. System Menu Item Sales Report


This report shows the same information, in the same format as reports 1&2 above.
This report is for the whole of the system rather than one particular revenue centre

84

D. Menu Engineering Report


This report gives the Chef/F&B Operators a breakdown of each menu item.
You can select all of the revenue centres (system wide) or one particular revenue centre
e.g. Restaurant
The menu item number and menu item names are shown down the left hand side of the
report.
The columns across the report are as follows: 1) Current Qty Sold - Quantity of that particular item that has been sold
2) MM % - Menu mix as a %
3) Sales Total - Total sales of that particular item
4) Sales Mix % - Percentage as a sales figure against the total mix
5) Qty Prep - Quantity of the item that has been prepared by the Kitchen
8) Prep Cost - Qty Prepared x item cost
9) Menu CM - Menu Contribution Margin - Total sales minus the preparation cost
10) Item CM - Item Contribution Margin - Item sales minus the preparation cost
11) Category - Star (high sales - high GP), Dog (low sales - low GP), Plow horse (low
sales - high GP), Puzzle (high sales - low GP).

E. Employee Closed Check Report


This report is one of the most useful and powerful reports in the system. A Financial
Controller/Restaurant Manager can see exactly how the checks are being opened/closed
by this report. This report is used by the Night Auditor/Supervisor if there are any
problems with balancing at the end of shift/night.
The Micros Check numbers are shown going down the left hand side of the report.
The columns across the report are as follows: (a) Table - Table number which the check was opened to
(b) Group - Used when a bill has been split - e.g. if there are two people sharing the bill,
there will be a 2/3 in this column
(c) Guests - Number of guests/covers on the bill
(d) Open/Closed - Date and time the check was opened/closed
(e) Prt - How many times the check has been printed
(f) Sub Total - Self explanatory
(g) Auto SvcChg - should have zeros in this field (we do not use auto service charges)
(h) Svc Charge - this is where the waiter would put in a tip payment
(I) Payments - the total amount due is shown here together with the payment method

F.
Employee Financial Report
This report shows the total revenue generated by each employee. This report is useful
for Restaurant/Bars Managers when trying to track sales by employees for sales races.
The report is a full breakdown, which incorporates net sales, service charge, total
revenue, discounts, returns, voids, checks that have begun, transferred in, paid and
transferred out.
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per
guest, number of checks and average spend per check.
The breakdown at the bottom of the report, is the same information that the user pulls
off at the end of shift report to cash up. This information includes payments, discounts,
and total sales.

85

G. Time Period Summary Report


With the advent of the new working time directive this report will become particularly
important when scheduling staff. A Restaurant / Bars Manager can see at a glance when
the Restaurant / Bar or Room Service is at its busiest and quietest. By using this report
and by multi-skilling staff we are able to schedule staff to the optimum, reducing labour
cost without impacting on service quality.
The figures on this report are easier to understand when put onto an excel spreadsheet
and placed into graph format. By doing this we can see sales peaks and troughs and
understand our busiest and quietest periods during the day.

86

Covers Definition
Brand Standard = any person ordering a food menu item including
tea and coffee
Restaurant 1
Breakfast

English or Continental breakfast served within the Restaurant up


until 11.00 am or EPOS closure whichever is the latest.

Lunch

Any cover / person served a meal in the restaurant during the


period 11.00am until 6.00pm or EPOS closure as above.

Dinner

Any cover / person served a meal in the restaurant during the


period 6.00pm until 11.00pm.

Restaurant 2 / 3 / 4
As Restaurant 1, for breakfast, lunch and dinner.
Lounge, Deli, Bar and Caffe Cino Food (not second restaurant)
Breakfast

Any cover / person served from this area between 6.00 am and
11.00 am. This includes single services of tea and coffee. Where
guests order multiple teas and coffees, this should be treated as 1
cover per person.

Lunch

Any cover as per breakfast served 11.00 am until 6pm

Dinner

Any cover as per breakfast served 6.00pm until 11.00pm

87

Functions and Banqueting


Breakfast

Any person having food served to them as a restaurant breakfast


in a banqueting or conference room 6.00am until 11.00 am. NB.
This excludes just tea and coffee.

Lunch

Any person having food served to them in a banquet room or


function related area (ie. Buffets in Lobbys etc). 11.00am until
6.00pm.

Dinner

As lunch except between 6.00pm and 11.pm

Others
Tea and coffee served in a function room or lobby or other related area
throughout the day and including nibbles and canaps, offered with
beverages (alcohol, teas, coffees).
This does not include sandwiches, which are a lunch or dinner item.

Room Service
Breakfast

Any food served in a guest bedroom from 4.00am until 11.00am

Other Covers

Any food served in a guest bedroom from 11.00am until 4.00am

Bar 1
Food and nibbles served over the bar counter and charged for i.e. pre
packed crisps and snacks.

Other Food Sales

Any Night Porter food served in public areas excluding guest


bedrooms

Any outside catering revenue


88

Non-Cover Sales

Any food consumed on a complimentary basis

Aircrew welcome lounges

Executive and / or Club Lounges.

Day and 24-hour delegates who have multiple servings of food items should be
recorded as 1 cover per item served.
i.e. morning coffee, lunch, afternoon tea is equal to 3 covers.
It is important that it is identified and trained into team members that covers
need to be accurately recorded in order to track average spend and judge
volume of business for staffing etc.
Ensure during banquets and functions that minimum numbers of covers are
charged for.
It is Best Practice that contracts are signed for minimum numbers, and that
minimum numbers are charged without fail.

89

Nominal Code Definitions


Food Sales
Breakfast

Food served between the stated opening hours of 6.00am


and 11.00am. This includes the value of food supplied with
inclusive packages.

Food served between the stated opening times of 11.00am


and 6.00pm. This includes the value of food served with
inclusive packages.

Food served between the stated opening times of 6.00pm


and 11.00pm. This includes the value of food served with
inclusive packages.

Lunch

Dinner

Banqueting Food

As above per service period.

Banqueting Food Other

Tea, coffee, nibbles, and canaps served throughout the


day.

Room Service Other Revenue

Food served throughout the day or night except room


service breakfast served 4.00am until 11.00am.

Food served as per Restaurant lunch and dinner

Bar Food

Other Catering
All Night Porter food (ex room service), all takeaway food
and all outside catering.

90

Food Tracker
Once planning, delivery, preparation and menu sales are complete, in order to
track your performance you must have a tool to combine all of your component
parts. A useful tool for this is a food tracker, which will give you a rough
estimation of week, or month to date food cost%.
See appendices.
If all the information in the example is used and data is up to date then a
reasonably accurate picture should be built of the running months food cost.
However the following should be noted and may cause adverse effects if not
controlled properly
1) Revenues will rise and fall with additional and rebated charges.
2) Credit notes will reduce costs. (Any awaiting credits should be made clear
on delivery notes).
3) Un-accrued invoices from previous periods will raise costs.
4) Invoices not received for delivered and used goods will reduce costs.
5) Invoice prices should be checked for accuracy against price list and
purchasing manual.
6) Management and entertainment figures may only be entered monthly.
7) The food tracker does not take into account the movement in stock levels
or stock valuation.
8) Invoices should be broken down into categories (meat, fish, dairy etc) and
monitored against average consumption.
Regularly liase with the Finance Department to see that revenues and invoicing
are up to date.
Regularly liase with Stores and Purchasing to see that all invoices are in place /
received.
In order to optimise use of the food tracker a weekly target of cost against
revenue should be set in order to have controlled expenditure.
It is Best Practice to use a food tracker system.

91

Stocktaking
Aim
To provide a true and auditable value of monthly assets and to provide data for
the calculation of monthly food cost profit.
It is Best Practice that a stock valuation is obtained per accounting period.
As a 24-hour business it is important that you are flexible in your approach to
stocktaking whilst at the same time ensuring accuracy and consistency.
During all stock takes you must understand that you will never get a 100%
accurate result as a) stock moves and b) you will always miss something.
The best way to ensure an accurate result is to maintain a consistent approach.
Therefore, always count in the same order and count in the same unit sizes
relevant to what you are counting. Be methodical.
Count in

, , , Whole kilos, jars, tins, bags and boxes etc.

Stock should be counted in the same units and given the


same value as that stated on the suppliers delivery invoice.

However also remember that luxury items such as Caviar, Saffron, and Fois
Gras etc have a high net value, therefore with these items you need to be more
accurate and precise.
Dont worry too much about the Pennies, it is the Pounds that are important.
A minimum of two (2) people should stock take, 1 counting and 1 recording,
checking and questioning the count and value. One of the counters should be
independent of the kitchen.

92

It is a misconception that the Head Chef has to do all of the stocktaking. The
important thing is that you have somebody who
1) Can count and judge weight and value
and
2) Who recognizes the goods / product.
Stocktaking can be carried out by anyone as long as the above rules are followed.
Therefore if a Commis is good at mathematics and is methodical there should be
no reason as to why he cannot help. This is also an ideal training method to help
them understand food costing within the kitchen.

If you count in the same order you will be able to compile and use the same stock
sheets weekly /monthly. Remember however to regularly update them as menus
and business changes.
Give realistic values to prepared or compound products;
Example;

2 Trays of Dauphinoise potatoes how many potatoes, how


much cream, how much cheese? Give these a value. Or use
the standard recipe costing.

Fresh fruit salad - How many apples, oranges, pears and


pineapples etc?

Use basic Excel spreadsheets per sub department and get each section Chef to
count his own fridge and workstation.
If you have a large enough operation Dry Stores should have a ledger that
records stock movement in and out of the store. Periodic spot-checks will ensure
that no items are missing. (Could be computerised to give a real time value).
When stocktaking, always question the reason goods are in a certain fridge or
store. For example would you expect to see 5 kg of smoked salmon in the dairy
fridge or 5 fillet steaks in the bar, knowing full well they do not have it on their
menu or indeed a grill?
Large stock discrepancies should be noted and investigated. These investigations
should be identified to the Head Chef and Financial Controller.

93

From time to time you will have items in the store that do not seem to be used.
Also known as slow moving items. As they inflate the value of stock you either
need to use them or get the Financial Controller to dispose of them.
It is Best Practice to have a 7-9 day stock holding of foodstuffs.

Method For Calculating Stock Value


Food results sheets are assembled and calculated from actual stock on hand
(stock sheets), creditors, credit notes, invoice returns and authorised journals.
1) All brought forward figures to be checked to previous result carried
forward / closing figures.
2) Non-invoiced goods (accruals) total to be supported by listing of supplier
and amounts outstanding.
3) Purchase figures to agree to appropriate payments returns i.e. statement,
invoice returns etc.
4) Closing stock total to be supported by actual stock sheets.
5) Revenue figures to agree to business and reflect sales position for exact
stock period excluding VAT.
6) Staff feeding figures to agree to set amount.
7) Stock sheets updated for price change on a weekly basis.
8) All arithmetical accuracy to be checked.
Calculations
Opening stock value + purchases value closing stock value = consumption
Consumption
Food Cost Percentage = ------------------------------------- x 100
Net Revenue ( -Allowances)

94

Taking of Food Stock


Food stocks should be taken monthly or weekly if adverse results are being
produced.
It is Best Practice that stock is counted weekly if food cost percentage is not
being achieved.
1) All stocks to be taken and calculated at current purchase prices.
2) No estimated values to be included, compound dishes made in house must
be broken down by value of their component parts.
3) The total stock valuation must be the figure used on calculation of the
trading result.
4) Stocks to be taken by competent persons (see training).
Authenticity of stock holdings and valuations to be checked quarterly by Hotel
Controller as a standard.
Stock count sheets to be kept for a period of 12 months.

95

Table Management and Food Production


The management of both hot and cold tables is a science. Look upon these as
visual Table d Hote menus. The majority of customers eat with their eyes. So
what they see forms their expectation of tastes and flavours.
In order to successfully sell buffets they must have a certain WOW factor.
Every time a customer sets eyes on the buffet they must have a Hilton Moment.
The customer is looking for
a)
b)
c)
d)
e)

Freshness
Colour variation
Uniform dish display
Attractive but not over garnished
Visual variation (height)

Understanding when and what your customer expectations are, is the


base for managing the experience.

Use the little and often principle.

Do not cook everything off prior to service; choose dishes that can be
cooked quickly.

Ensure that the Chef on the table understands all the dishes, all the
ingredients, and cooking method.

The Table Chef must have a personality and character so that they can
talk and sell food to the customers.

Carving techniques must be taught, a bad Table Chef will cost you money
in wastage.

The presentation must be checked by the Senior Chef and Restaurant


Manager prior and during service.

Fully brief all restaurants, bar, lounge and even reception staff on what is
on the menu.

When replenishing dishes, take old dishes away and replenish with a new
dish. N.B. Do not top up dishes in front of the customer.

Remember that the food quality expectation of the last customer is the
same as the first.

96

Breakfast
Using the knowledge gained from peaks and troughs, food production should be
geared up to just in time cooking.
Monitor the average consumption over a weekly period. Establish what the
average mix of business is by consumption of key production items;

Scrambled Eggs
Bacon
Sausages

Scrambled Egg

Should be produced in batches of no more that 20-25 portions for peak


times. The recipe in the breakfast specifications manual should be
followed. This will not only ensure that the product looks and tastes good
but also that wastage is reduced.

Bacon

When bacon is trayed up do not overlap the rashers. Do not stack trays
on top of each other. This will stop the rashers sticking together and
causing increased wastage or poor portion control. Bacon must be cooked
using the methods in the breakfast specification manual.

Sausages

These must be trayed up so that there is space to get an even colour on the
product during the cooking process. They should be oven baked. Under
no circumstances should they be fried.

Re-Stocking

Once peaks and troughs have been established use a size dish for
trough and a full-size for peaks.

When stocking a product, do not tip new in on top of old, this leads to poor
presentation and a build up of old product generally in fat at the bottom.
The method is to take away the dish that needs restocking, have a new dish ready
with new product and place (do not tip) the old product on top, taking care, so no
liquid comes from the old onto the new.

97

Lunch / Dinner
Production for lunch and dinner tables follows a similar system to breakfast. The
basis being the forecast of number of covers and at what time they will be eating.
This covers the majority of bookings of groups. i.e. tours and Conferences.
The entre dishes should only be cooked off for immediate use, little and often.
This will reduce wastage.
When cooking a la carte production. Ensure that your mis en place is only
sufficient to cover your immediate service needs. Do not batch cook for a la
Carte, except in the cases of Soups, Terrines and Stocks.
Take Micros sales analysis to help predict volumes. Remember sales mix will
vary according to weekend and midweek.

Room Service
As already mentioned in forecasting and planning will be busy on nights when
there are popular sporting events on the television. Using the micros room
service menu analysis you will be able to predict those nights and sales mix.

Food Production
Remembering these principles will ensure efficient food production.

Always use a standardised production method.

Recipes must always be costed, and updated regularly.

Use only seasonally available commodities.

Always use existing nominated supplier base.

Look for value for money ingredients. Look for ingredients that you can
get consistently.

Take into account pack size, yield and shelf life.

The product if used should be able to be reproduced in volume.

Preparation and production time for dishes needs to be consistent.

Customer expectations are met and exceeded by the specifications,


quality, production and presentation.

Products should be scoped so that substitutions can be made, should


availability problems occur.
98

Sharing Information
To make strategic business decisions concerning the hotels food and beverage
outlets it is essential that all data is readily available and is accurate.
It is the responsibility of the Accounts Office to supply the General / Hotel
Manager and all of the Management Team with daily accurate information
giving details of revenue, covers and average spends.
All information produced and issued daily by the Accounts Office should mirror
any revenue or statistical reports that can be produced from Oracle.
!

Without accurate information it is impossible to successfully manage a


hotel or department.

Without accurate information we cannot measure success or failure


against targets.

Without accurate information we cannot forecast business trends or plan


for the future.

Without accurate information we cannot judge individual or team


performance.

99

Information Table
Below is an example of the various information that should be shared to manage
food cost profitability.
Report Type

Use

Daily Food Supplier Usage.

Track monthly cumulative expenditure.

Daily Food Cost Tracker.

Track monthly cumulative food cost %.

Daily Revenue, Covers & Average Spend by


Department.

To ensure covers and revenue match forecast and


match dishes served from kitchen.

Monthly General Ledger Report For The


Food Cost of Sale Account (294-31001).

To ensure all suppliers on report are food


suppliers. All credits for inter departmental
transfers have been posted. All credits for
discounts, management complimentary account
and promotions have been posted.

Monthly Food Cost Result.

This should list opening and closing stocks,


supplier usage, credits for IDTs, credits for
discounts, management complimentary account
and promotions.

Monthly EPOS Sales Report by Item.

To track success of menu dishes and ensure menu


cost (if applicable) is correct per item.

Daily Revenue Deduction Tracker.

Track all deducted revenue such as allowances,


discounts, promotions and management
complimentary account.

Monthly Oracle Statistics Report.

Lists revenue, covers, average spends and


sleeper/diner ratios. Utilise for forecasting and
planning menus.

100

Optimum Food Costing


This can be simply defined as follows;
The minimum cost of product used to serve a meal to a specified standard as a
percentage of maximum achievable sales revenue.
This definition is of course not as simple as is sounds. We have seen throughout
this manual that a number of factors exist that we must take into consideration.
However, optimum food costing can be worked towards by implementation,
regular review and training of this manual.
All sections contribute towards optimizing food cost and although some sections
are small, all are as equally important to Best Practice management.

Calculating Optimum Food Cost


On a monthly basis the hotel can calculate its optimum food cost based on the
previous months sales. The calculation is made up of a combination of the sales
mix and achievable food cost exercises.
From menu costing, sales mix and the AFCEs the hotel should calculate its
forecasted monthly cost. Any variance to this forecasted monthly cost should be
investigated.
The financial or food and beverage controllers need to calculate the following;

Food cost for buffet restaurant based on the AFCE.


Food cost for restaurant a la carte based on menu costing and sales mix.
Food cost for Room Service based on menu costing and sales mix.
Food cost for banqueting based on banqueting menu cost and selling price
tracker sheet.
Food costs for any other outlet based on menu costing and sales mix

From the example below based on previous calculations the optimum food cost
for the trading period is 25%. If the calculations have been made correctly this
will give a true picture of what the food cost should be within the hotel.

101

Example
Hotel Optimum Food Cost Calculation
Sales ()

FC ()

FC (%)

Buffet

10000

3500

35

A la carte

2000

600

30

Room Service

2000

800

40

Bar/Lounge

2000

500

25

Restaurant 2

3000

1140

38

Banqueting

20000

3600

18

Total

36000

10140

26

The cost values are calculated from the menu cost sales mix analysis, AFCEs
and Banqueting menu sales / cost matrix tracker.
It is Best Practice to calculate optimum food cost as part of month end
calculations.

102

Appendices
Charts and Food Cost Calculations

FC001

Food Expenditure Tracker

FC002

Food Suppliers Goods Received

FC003

Suppliers Order Form

FC004

Hotel Audit Checklist

FC005

Outlet Manager Questionnaire

FC006

Quick Calculation Table

FC007

Menu Costing Sheet

FC008

Revenue Deductions

Conversion Formulae

Conversion Tables

List of Nominated Food Suppliers (at October 2002)

103

Conversion Tables
Exact Formulae Dry Goods

Ounces to Grams Multiply by 28.35

Grams to Ounces Multiply by 0.0352

Pounds to Kilograms Multiply by 0.4536

Kilograms to Pounds Multiply by 2.20262

Exact Formulae - Liquid

Fluid Ounces to Millilitres Multiply by 28.4

Millilitres to Fluid Ounces Divide by 28.4

Pints to Litres Multiply by 0.568

Litres to Pints Divide by 0.568

Workable Equivalents
Ounces / Fluid Ounces

Gram / Millilitres

10

25

50

75

100

125

10

250

15

375

20

500

104

Conversion Formulae
To Calculate Selling Price on known GP%

Cost Price x 100 / Known Cost % = Net Selling Price

To Add VAT

Net Selling Price x 1.175

To Find Food Cost %

Cost Price / Selling Price x 100 = % Cost

To Find Food Profit %

Cash Profit / Selling Price x 100 = % Profit

To Find (Take Off) Vat Element

Selling Price / 1.175 = Net Price

Example
Cost Price

= 1.45

= 29%

Cash Profit

= 3.55

= 71%

Selling Price = 5.00 Net


Selling Price = 5.75 Inc Vat

105

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