You may not be surprised to hear us say that stocktaking is the answer to your restaurant, pub or hotel’s stock control management. You may be surprised though about the direct benefits regular stocktaking could bring your hospitality business! It’s more exciting than you’d think!
1. Stocktaking brings gross profit margins under strict control. Without this, net profits would be indefinable.
In these times of ever higher costs, a successful hospitality operator relies on several factors to keep tight control over gross profit margins. One of the most important of these factors is control over the efficient replenishment of stock. That’s where proper stock control management is key to success and a professional stocktaking service is of prime importance. And with the increasing likelihood of longer opening hours and the employment of more staff to cope with them, stocktaking will assume an even greater role in the future.
No business is too small or too large for stocktaking. Even the smallest village tenancy can benefit from the advice and expertise that a stocktaker can offer. Sadly, small and medium sized businesses (SMEs) tend to avoid paying for regular stocktaking. Often when the end of the year comes around the corner they will be shocked to hear their accountant say that their gross profit is 3 to 4% lower than their selling prices were geared to show.
A stocktaker is able to point out to you in real-time when profit margins are not up to expectations. Even if you only had a quarterly trading account prepared by your stocktaker it would give you more timely warning of poor performance. You would also find the VAT and Inland Revenue Inspectors are much happier to accept accounts that are backed up by a full regular stocktaking report prepared by a reputable company.
2. Stocktaking safeguards your business against theft and fraud.
Proper stocktaking has the additional benefit of acting as a check on the honesty of staff. It sets in place procedures that aid the security of both stock and cash. It is in fact a deterrent to staff contemplating theft or fraud. In larger premises the need for regular stocktaking is therefore even more vital. Dealing with large numbers of staff means that the need for constant supervision and control is obvious.
A stock shortage could be caused by a number of reasons, the most common of which are:
- theft of stock or cash
- undercharging or not charging for drinks
- short deliveries
- stock wastage
- incorrect analysis of takings or claims for allowances
A professional stocktaker will provide deeper insight into which of these causes are the greatest areas affecting the stock shortage in your stock control management system. They will also offer credible advice on the best methods to combat them. This will often include the introduction of new procedures for:
- goods received and returned
- issuing and control of stock from cellar to bars
- chargeable containers
- tills and cash
- allowances for beer wastage
- retail sales
- food stocks
Specialist stationery to aid the stock control management process can also be provided.
3. Regular stocktaking data provides the basis for comparative analysis on stock levels versus consumption levels.
A full extended computerised stock result following a stocktake will provide invaluable information for the owner or manager of an establishment. As well as showing an actual cash shortage or surplus and gross profit, it will also highlight over-stocking and slow moving lines. Therefore helping to establish ideal re-ordering levels.
Most importantly, however, the modern stocktaker can pinpoint exactly where shortages are occurring by analysing the PLU sales from the tills and by drawing a direct comparison with their calculated sales. A PLU variance report will show you on a line by line basis exactly where discrepancies are occurring.
4. Stocktaking will point out where stock holding can be reduced, freeing up previously tied up cash.
It is certainly important to mention too that achieving the optimal stock levels versus consumption levels will ensure stockholding is kept to a minimum at all times. Reducing stock holding is important as it ties up cash and reduces potential losses. This is particularly relevant on draught beers and other products that have relatively short best before dates.
As a rule of thumb, stock holding on draught beers should be no more than seven to ten days maximum and packaged beers, cider and minerals should be no more than 14 days. Operators can use Venners stock sheets to highlight potential problems with stock holding. The result summary shows stock holding by section and if any section shows up as being high they can then look through the results detail pages which show stock holding by individual product.
5. Stocktaking will uphold required working conditions, such as a tidy, organised and efficient operational working space.
Operational efficiency relies on clear and organised work spaces. Stocktaking provides the data necessary to keep stockholding to a minimum at all times. This means that the space you have in your establishment is utilised as effectively as possible. More space means better movement in the venue for your staff (with automatic health and safety benefits), as well as better oversight of the stock holding areas, such as the cellar and fridges. Instead of employees having to search through stacks of unused (and possibly out-of-date stock), they can find the next batch of stock as required easily. Not only that, it will make it much easier to keep all stock holding areas hygienically clean.
Stocktaking is foundational to stock control management. It provides you with the information you need to run a profitable and operationally efficient business. A good stocktake report will include: cost prices from supplier invoices, selling prices based on price tariffs and wine lists, opening and closing stock figures, purchases and sales for each individual stock line, the value of sales at cost and selling price, gross profit percentages achieved on each stock line and the number of days stockholding. Speak to us today about our services and start benefitting today!
For more information about our stocktaking services click here or simply call us on 01279 620866.