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Ideas on How to Utilize your Newfound Rebate Savings

Finding savings where you can and then putting those savings towards ideas that will increase traffic to your restaurant is a great way to expand your business. But are you taking advantage of every savings opportunity available? Continue reading “Ideas on How to Utilize your Newfound Rebate Savings”

Advantages Of Comparing Prices From Multiple Vendors

When ordering items for your restaurant, do you shop around for the best deals? Or do you feel more comfortable making all your purchases from one vendor?

Of course there are advantages to sticking with one vendor. You get one big delivery instead of several small ones, you get to know your delivery guy, and you feel like it saves you time. But in the long run, does it really pay to stay loyal to one vendor?

Here’s our take on it.

With one vendor, although it seems like you’re getting a great deal, that is often not the case. You often end up paying more for items that fluctuate in price (seasonal items for example), prices tend to slowly increase over time, and you are limited to only the products they offer.

With multiple vendors you have the advantage! You are able to find the best price available on any item, you have access to even more products, and when vendors find out that you’re shopping around they will often bargain their prices to gain your business. Not to mention, restaurants that shop multiple vendors with RebateEdge are able to save 8-12% (on average) over restaurants that stay loyal to only one vendor.

Of course saving money sounds great to everyone, so maybe the bigger question here is, “Who has time to shop around?”

The great news is there is now a way to save both time and money. With DiningEdge Technology, you can compare live prices from multiple vendors, replace discontinued items, and find comparable products. Reporting and the ability to order directly from the platform is also built in, so you can stay on top of your game.

Contact us today for a free demo. We would love to show you how ordering from multiple vendors can save you money.

10 Best Practices for Counting Inventory

Here are 10 things that should be part of your best practice on counting inventory

  1. Take inventory frequently. For some items it should be done daily, for others twice a week. At a minimum it needs to be completed before placing weekly orders.
  2. Take inventory after the restaurant has closed or before it opens. You cannot take accurate inventory while goods are being sold. Whatever time you pick, stick with it. If you always take inventory on Tuesdays, but sometimes you do it at night and sometimes in the morning, there will be fluctuations in week to week results.
  3. Take inventory before a new shipment arrives and then add the new stock to your counts. Do not attempt to take inventory while deliveries are being made. Items will end up being double-counted.
  4. Clean out and organize your stock areas before taking inventory. Throw out items that have expired, move similar items to the same shelf and in general, tidy up.
  5. Use Inventory Count Sheets. Have one for daily, one for weekly and one for monthly counts (or whatever periods you use) and standardize the items included and the unit (pounds, number of items, boxes etc) each item is tracked in. Changes in what items are tracked can cause large fluctuations in recorded inventory.
  6. When taking inventory, make part of the practice ensuring that items are being used on a First In, First Out (FIFO) basis. Older goods should be rotated to the front of shelves so they are used first. Additionally, try to keep the amount of items you have on hand as low as possible to reduce theft and spoilage.
  7. Use two people to take inventory. They should count items separately and then compare results for anomalies. Pairing reduces errors and the temptation to manipulate results or pocket goods.
  8. Use the same staff to take inventory. They will not only get faster, but they will tend to be more consistent.
  9. If you use scales to weigh inventory and measure portions, calibrate them weekly.
  10. Use FIFO (First in First out) costing. The price of many items (like ground beef) changes week to week. Using the latest price is not accurate in costing.

Purchase Order to Bid Price Management

Good Invoice management should start with creating a Purchase Order (PO) with bids on all products within an inventory software that will help you manage your Cost of Goods.

You can read my earlier blog on buying smart to learn more about bidding on products.  Many times, the manager/chef that is receiving the goods is not the same person that ordered them, so having a PO on a clipboard or tablet by the back door helps with receiving.

With today’s technology you can have all of your invoices automatically import into your inventory software. No more manual importing or coding invoices.  But automation can lead to increased costs.  Included in your automation should be PO to invoice discrepancy reporting.

 

Discrepancy reporting should include the following information

  • Price change from bid to PO
  • Catch weight adjustments
  • Items shorted
  • Replacement items
  • Invoice number

Best Practice when automating this process

  1. Create PO’s whenever possible that included bid price
  2. Continue to check and sign all paper invoices
  3. Verify paper or scanned copy of paper invoice against accounting software before paying invoice

Buying Smart

I spend my days talking to restaurateurs and chefs about their purchasing and inventory practices. It’s very interesting to hear so many different ways of running a restaurant, especially when it comes to managing food cost. When you get into food cost, it’s all about vendor selection and what they have to offer.

There are 2 schools of thought around vendor selection. Some restaurants prefer to purchase from one broadline purveyor and others like to shop prices each week and buy from multiple purveyors.

Here are some Pros and Cons of each:

Pros and Cons – Single Broadline Vendor
• One order and one truck Delivering
• Strong Relationship with sales rep
• Contract Pricing
• Pay more for products that fluctuate
• Price creep up over time
• Limited product options

Pros and Cons – Multiple Broadline Vendor
• Multiple orders and trucks to check in
• Best Price on all items
• Larger Variety of products
• Sales people fighting for your business weekly

As you look through the Pros and Cons, do you think are there others that affect you? Do the Pros outweigh the Cons?

If you could save 8-12% off purchases ordering from multiple vendors, would it be worth it? Does that help the Cons outweigh the Pros to purchase from multiple vendors?

The largest advantage to multiple vendors is the ability to compare pricing, but this can also be a very difficult and time-consuming process.

To help keep food cost down, DiningEdge can do this for you automatically:
• Import vendor pricing automatically via EDI, Online portal or Email
• Parse the pack and size to the lowest common denominator
• Compare like products
• Discrepancy report from Purchase Order to Invoice

Email: Naomi.canning@diningedge.com or Contact Us at 561-880-2970 for more information.

Why do Most Restaurants Fail?

Most independent restaurants fail because they don’t spend the time to understand their largest cost, the cost of goods. Cost of goods represents as much as 18-40% of every dollar in sales. If not controlled, it can be much higher, and unfortunately, some restaurants don’t even know this number.

Calculating the Cost of Goods Sold (COGS).

COGS = Beginning Inventory + Purchases during the period – Ending Inventory

Take this quick Survey!

Do I have processes in place to manage my largest cost? Are these processes documented, and all my staff trained?
Do I shop multiple vendors?
Am I doing all I can to manage my inventory
Is this on my mind each and every day?
Do I count Inventory at least monthly?
Based on sales, do I know how much inventory I am missing based on least my high-cost items?
Do I know the theoretical cost of all my menu items?
Do I manage my rebates?

If you answered NO to any of these questions, you can benefit from taking advantage of a Purchasing and Inventory system and/or company to help you manage your costs.

In upcoming blogs, we will breakdown managing your inventory into small steps that, if followed, will help you have full control over your largest cost.

Steps:
1. Rebate Management
2. Purchase Smart
3. Verify bid price matches invoice price
4. Accounting integration
5. Count Inventory
6. POS Integration
7. Recipe Analysis
8. Analysis your business

Email: Naomi.canning@diningedge.com or Contact Us at 561-880-2970 for more information.

Rebate Management

The hospitality business is a business of saving every penny.  One of the easiest ways to add some profits to your business is through rebates. A rebate is a money that if offered by manufactures for buying their product. Rebates are available to anyone who buys qualifying products.

Rebates are offered on many of the products you are buying for your business.  So how do you take advantage of these rebates?

  1. Research all of your products to see what rebates are available
  2. Research different products. You may find another product is less expensive after a rebate.
  3. Research the process submitting your rebate. It can vary by manufacturer.
  4. At the end of the Quarter (or the manufacture reporting period) collect your purchases from each of your distributors.
  5. Complete rebate forms.
  6. Mail all in…
  7. Checks will be mailed to you within 3 months.

I’m sure you are thinking to yourself, “This is way too much work, I’m way too busy for this.”  So, what are some other steps you can take?

  1. Hire a rebate management company.
  2. Cash your check every quarter.

If you hire a rebate company, what should you look for?

  1. No upfront fees or hidden costs
  2. State-of-the-art reporting
  3. Negotiate with manufactures to use their buying power to maximize rebates
  4. Collect all of your purchases from your vendors
  5. The detailed statement with each check received
  6. A distribution calendar should be supplied to you
  7. Consulting on purchases
  8. Market Trends and Newsletter
  9. Rebate earnings have no limit… more participation yields higher earnings!

DiningEdge Offers rebate management – Email Naomi.canning@diningedge.com or Contact Us at 561-880-2970 for more information.

Example Report:

Best Practice for Taking Inventory

  1. Take inventory frequently. For some items, it should be done daily, for others twice a week. At a minimum, it needs to be completed before placing weekly orders.
  2. Take inventory after the restaurant has closed, or before it opens. You cannot take accurate inventory while goods are being sold. Whatever time you pick, stick with it. If you always take inventory on Tuesdays, but sometimes you do it at night and sometimes in the morning, there will be fluctuations in the week to week results.
  3. Take inventory before a new shipment arrives and then add the new stock to your counts. Do not attempt to take inventory while deliveries are being made as this can cause some items to be double-counted.
  4. Clean out and organize your stock areas before taking inventory. Throw out items that have expired, move similar items to the same shelf, and in general, tidy up!
  5. Use Inventory Counting Sheets –Have one for daily, one for weekly, and one for monthly counts (or whatever periods you use). Standardize the items included and the unit each item is tracked in, for example, pounds, number of items, boxes etc. Changes in what items are tracked can cause large fluctuations in recorded inventory.
  6. When taking inventory, make part of the practice ensuring that items are being used on a First In, First Out (FIFO) basis. Older goods should be rotated to the front of the shelves, so they are used first. Additionally, try to keep the amount of items you have on hand as low as possible to reduce theft and spoilage.
  7. Always take inventory with a partner. Pairing reduces errors and the temptation to manipulate results or pocket goods. Always count shelf to the sheet.
  8. Use the same staff to take inventory. They will not only get faster at it, but they will tend to be more consistent.
  9. If you use scales to weigh inventory and measure portions, calibrate them weekly.
  10. Use FIFO (First In, First Out) costing. The price of many items (like ground beef) changes week to week. Using the latest price is not accurate in costing.

Email: Naomi.canning@diningedge.com or Contact Us at 561-880-2970 for more information.