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Getting Started with the Monitoring of Purchases

Support — Mon, 21 Feb 2011 09:59:17 +0000

In an earlier feature we said that the purchase price of ingredients was low down on the priority of listing of things to do in order to create a successful business. We realise that this opinion may be contentious but is something we believe in from our experience with other customers. These customers were very organised and believed that they ran a professional multi million pound organisation.
Despite this and without changing any of their purchasing arrangements we jointly achieved an improvement of gross profit of 4 percent.
What would this mean for your company? If your annual sales were £100,000 per annum this would mean £4,000 extra profit per annum. If your sales were £200,000 this would represent £8,000 extra profit per annum. Not a trivial amount.
Most organisations think of their sales revenues but do not consider their cost e.g. purchases and salaries.
In KitMan we combine both sales and purchase analysis.
We analyse sales activities and then monitor purchases so that results can be compared against any forecast and comparisons with previous years.
These comparisons will produce results of the current gross profit levels daily and provide an automatic comparisons against the current forecasts. This highlights any deficiencies so that corrective action can be taken immediately advising menu changes etc. At all stages the customer is in control of what changes to make, if any.
For more information on the KitMan Financial Modules

Getting Started with Purchasing

Support — Mon, 14 Feb 2011 09:57:49 +0000

Clearly the cost of purchasing is an important feature of whether a company makes a profit or a loss. However, the cost of purchasing is only a small element of the whole process of calculating profits and the success of a company.
Whilst it is important that one is paying the commercial rate, the purchase price is only a small element of the factors that constitute the profitability of a business. If by aggressive purchase negotiations one is able to reduce the ingredient cost of a dish by 10p or 20p is this “the be all and end all” of everything. What is the point of negotiating the cheapest price if you cannot get delivery of the products when you want them or that only half of the goods are of the required delivery.
We consider that a more major factor of success is quality of product, quality of service, reduction of waste. In fact surveys throughout different industries have put purchase price into 6th position – should we expect that the catering industry is any different; we think not!
We believe that a balanced approach is needed to purchasing to ensure that you receive the goods when you want them and that they are of an acceptable standard.
If you have any concerns about purchasing then please contact us. We have a network of suppliers throughout the UK and Ireland who provide quality products complete with traceability, they are used to delivering to tight delivery schedules and offer competitive prices to users of KitMan.
For more information on the Catering Procurement

Getting Started with Menu Design

Support — Mon, 07 Feb 2011 09:56:19 +0000

We have discussed in earlier features the importance of creating a menu bank and having detailed costs and multiple selling prices for each dish.
From this it is able to consolidate these dishes into a complete menu, whether this be A La Carte, Table d’ Hote, a Function or any other event.
This can be a time consuming process as one has to incorporate dishes and then to include or swap dishes with suitable costs or profits.
There is a specialist Menu Module in KitMan that assists operations to create as many menus as they wish.
For some companies this may be the types of recipes as described above in which case one is able to create different section headings e.g. Starters, Soups, Main Course, Desserts. They then search menus to provide dishes within each sector below a given purchase price.
This then creates a menu detailed into different sections providing an analysis of costs, sales prices, profits.
The uniqueness of this system enables recipes and expected sales volumes to be included so that the menu can be created in an order to maximise both the sales values and profit margins.
For other establishments it maybe a daily menu or an organisation that is working to a menu cycle. In this way it will provide detailed costing and profitability based on an expected production. By having up to date costs it will quickly highlight if costs are exceeding budgets.
For more details check the KitMan menu modules and see worked examples.
For more information on Menu Design

Getting Started with the Recipe Bank

Support — Mon, 31 Jan 2011 09:55:30 +0000

In an earlier message we advised the importance of monitoring dish costs, relating these to sales values and establishing multiple selling prices to maximise the profitability in each area. For example a client is prepared to pay more for a meal in a restaurant because of the ambiance, presentation and service than they are prepared to pay in a bar where it is merely delivered to the table.
However, this is only one element of the many features that should be attached to each recipe.
For instance it is important that one relates selling prices to costs as that provides profits. Similarly it is important that the quality of the meal is consistent, otherwise if a client has a poor meal they will go to the competition. This is easy when the Chef is on duty, but what happens on the Chefs day off or when he is on holiday or sick.
Then customers have to satisfy all of the other legal requirements such as Health & Safety, recording of nutrition such as amount of calories, fat content and then dietary elements e.g. does not contain nuts.
In short this can be a nightmare to satisfy and is an influential factor why companies fail to be successful.
KitMan can help in all aspects. Each recipe includes methods of cooking, presentation and an ability to have photographs so that a consistent quality may be maintained even in the Chefs absence.
All other legal requirements such as Health & Safety, Nutrition, Dietary are also covered in what must be the most comprehensive menu bank on the market.
For more information on the Recipe Bank

Getting Started with Sales Tracking

Support — Mon, 24 Jan 2011 09:54:41 +0000

An important element of a successful business is to record not only sales values but also the various food service areas in which they are sold.

By recording this information one is able to know which are the most profitable areas and the most profitable dishes. This highlights areas where marketing should be focused assisting the operation to grow its business and improve profitability.

This valuable information also assists in planning staffing levels for individual areas at various times so that one is not paying for resources when they are not required.

KitMan, of course, enables customers to forecast their business by food service area. Once this is created one can then record and monitor actual sales revenues against the forecast. In this way a customer can easily identify which sales area is profitable. It also calculates the sales mix for each area highlighting where they can improve profits.

The recording of the number of sales covers each day for each service provides valuable protection enabling management to have detailed analysis of sales covers so that if there is any concern of fraud this is quickly and easily highlighted enabling management to take corrective action.

For more information on the KitMan Financial Modules

Getting Started with Menu Costing

Support — Mon, 17 Jan 2011 09:38:32 +0000

The success or failure of any establishment is dependent upon accurate costing of menus and portion controls.

In an environment where product cost fluctuate as frequently as food does it is essential that one is aware of all price changes. If one costs all of the menus today it is almost guaranteed these will not be the same in three months time. An unawareness of these changes can quickly erode profit margins.

The use of the KitMan System removes all concerns in this area. Each recipe includes a list of ingredients used and provides a complete cost, provisions can be made to include labour if required.

The unique method of attaching ingredients to recipes ensures that the cost of each recipe is updated following the change of price of any product.

This means that customers are aware of the cost of each dish continually. If the price of any product increases such that the profit margin is affected this is quickly highlighted.

This is an invaluable feature as if one is using an old recipe it automatically costed at today’s prices.

KitMan also provides an additional feature of allowing customers to sell a dish at different selling prices.

For more information please visit Recipe Costing Software

Getting Started with Forecasting

Support — Mon, 10 Jan 2011 09:36:07 +0000

Many operations do not prepare a forecast of either potential revenues or associated costs. Yet these are critical to the success of any business for how can one manage its activities if it does not have anything to compare it against.

At the very least one should establish a forecast of what sales they expect to achieve in total for each week of the year. When this is compared to the anticipated gross profit margin it will provide a cost price so one knows how much can be spent to achieve the objective.

In this way one is comparing purchases against a targeted sales revenue. However, the problem is when one is continuing to spend money in line with the forecast but not achieving the level of sales that it was expecting.

The KitMan System handles forecasting in a flexible way that enables customers to compare forecasts daily, so if there is an underperformance of sales the level of purchases is automatically reduced so that at least gross profit margin is being achieved.

KitMan also enables forecasts to be broken down on a daily basis and for individual food service areas so that controls can be created for every department of the establishment. In turn this also highlights what staffing levels are required each day.

For more information on the KitMan Financial Modules

Getting Started with Suppliers and Products

Support — Mon, 03 Jan 2011 09:30:47 +0000

Suppliers and Products lie at the heart of the KitMan System, set suppliers up once and they are used in raising Purchase Orders and receiving deliveries, in monitoring expenditure and profitability on a daily basis and performing a stock take. Products are used in recipes, in purchases and in stock takes, when a price is changed, from the date it takes effect, all recipes, purchases and stock values are updated automatically.

Tip

When setting up a Supplier always fill in as much as possible – this appears on Purchase Orders so can help suppliers to process orders much more easily.

Products

We suggest setting up products in batches of up to ten.

The unit of measure cannot be changed once the product has been created so it is worth spending a few minutes considering how a product will be used by different parts of the system.

Example One a box of 40 1/2lb blocks of butter could be setup
in a number of different ways

Count	x	Size	Unit	Notes
1	x	1	box	We do not have ‘box’ as an option because it is not easily divisible if you need 50g in a recipe for example.
1	x	40	ea	Possible but once again 50g in a recipe would be 0.2ea.
40	x	250	g	Preferred – easy to order, easy to stock take and easy for recipes. grams versus kilograms is whichever you prefer, but we would suggest standardising on one or the other and using that unit for all weights.
40	x	0.25	kg

Example Two a box of 200 butter portions weighing 7g each

Count	x	Size	Unit	Notes
1	x	1	box	We do not have the option.
1	x	40	ea	Preferred – you can then use 1ea in a recipe but you would be ordering in multiples of 1x200ea, put 7g in the specification for information purposes.
40	x	250	g	Not much use as you would never use butter pats to weigh out 100g of butter.
40	x	0.25	kg

Final Tips:

Think of each being the individual item, not the box it comes in.
Use each not weight or volume for all single portion items such as yoghurt pots, cans of drink, individual portion cereal etc.
For weights and volumes agree to work in either g and ml or kg and ltr, whichever you prefer then stick to it.
Be as descriptive as possible in the product name so that you can easily distinguish the item and use the common term first so that similar products are grouped together when listed alphabetically e.g. Butter Salted or Herbs Parsley Curly Fresh or Cheese Cheddar Mature Coloured.