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INVENTORY AND FOOD COST

MONTH END INVENTORY AND FOOD COST

Managing your food cost also has a lot to do with managing your end of month inventory.  Do you count items by the sheet-to-shelf or by the shelf-to-sheet method?  Which one is better?  We explain the difference in Taking Inventory.

Are all of your food credits and transfers entered correctly?  Do you track them?

Do you verify the information on your month end inventory balance sheet?  This is extremely important if you want to be on top of your game in controlling your month end inventory accuracy.

 

FOOD COST CALCULATION

Month End Food Cost Calculator
The inventory food cost tool is an Excel sheet which will calculate your period end inventory. End of period (usually either weekly or monthly) Food Cost Calculation is as follows:

(Beginning Food Inventory + Purchases + Transfers In – Transfers Out – Credits – Ending Food Inventory) / Sales

Explanation:

  • Beginning Food Inventory is the value of the food you had at the beginning of the period, which generally is also your ending inventory for the previous period.
  • Purchases is new food purchases for this period (do not include paper, chemicals, equipment, etc…only food purchases)
  • Transfers In is for establishments which transfer product from one venue to another, or perhaps from the bar to the kitchen
  • Transfers Out is product transfered to another venue, or perhaps to the bar
  • Credits can be a variety of things including vendor credits for bad/wrong product, marketing credits, rebates, etc
  • Ending Food Inventory is the value of your food inventory at the end of the period
  • Sales is your food sales

Sales may be either Food Sales only -or- Food & Beverage Sales depending upon your operation’s accounting method.

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