Flora Richards-Gustafson reports:
"When you don’t have a good inventory report for your restaurant, you can’t really know about the establishment’s profitability. A profitable restaurant’s food cost should be 28 to 35 percent of revenue, according to the website Restaurant Report. In addition to impacting the bottom line, miscalculating the inventory can reflect on the skills of the management team and affect the quality of food and value of service provided to diners. When calculating a restaurant’s inventory, use a ledger to [handwrite] information onto a count sheet and transfer the data into a spreadsheet...Prepare five rows in your ledger and a new spreadsheet worksheet. Label each row with the following: Item, Unit of Measure, Inventory Amount, Unit Price and Total Cost...List all the items you have in your restaurant under the Item column...Keep in mind that your restaurant inventory items are the consumables — edible or not — that you use for your operation...Write down the unit of measurement for each item in the Unit of Measure column. A unit of measurement is what you use to determine or measure the quantity of an item purchased for the restaurant...Indicate the number of units you have for each inventory item in the Inventory Amount column...Write down the price you pay per unit of inventory in the Unit Price column. The unit price is the worth of an item...Multiply the figure in the Unit Price section by the figure in the Inventory Amount section for each inventory item and write the answer in the Total Cost column...Calculate the restaurant’s average daily inventory cost in a section of your ledger. To calculate this figure, divide the total inventory cost for the purchasing period by the number of days in the purchasing period. Use your profit and loss statement to determine the total inventory cost for the period...Estimate how long the inventory on hand will last in the restaurant. To find this figure, divide the cost of the current inventory you have, adding the totals on the inventory report you created, by the average daily cost of food, which you figured out in the previous step...Website Restaurant Owner states that you should ideally have less than a [week's] worth of inventory on hand, particularly for food items, so there is less waste. Smaller operations should have about three to five days of food and other inventory items on hand. If you have more than the recommended amount on the shelves, you may be purchasing too many items...Conduct an inventory of the restaurant weekly so you can have the most accurate picture of the inventory cycle in your establishment."
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