THE PREVENTION AND DETECTION of fraud and theft are just ancillary benefits of a cost-control program, a premise that is not always clear to independent operators. Over the years I have implemented cost controls at several independent restaurants. Once completed, they would tell me that they now understood the true purpose and value of cost controls. A few independent owners felt that their physical presence and the hiring of family members eliminated the need for cost controls. Once they progressed beyond the singular idea that cost controls are to keep people from stealing and understood that the primary purpose was to provide feedback on day-to-day operations and decisions, they appreciated the real purpose and value.
Why don’t all restaurant operators have cost-control
programs? The answer is that they are not aware of the waste that is taking
place around them. It is not very complicated, as it is all basic management.
You have to be able to identify value, and you have to know your costs and
detect where they are excessive. Cost control encompasses all areas from the
back door to the front door; from purchasing to paying your bills; from
recording each transaction to depositing the sales receipts in the bank. Cost
control is also more than just computing percentages and ratios; it involves
making decisions after the information has been compiled and interpreted.
Cost control is used to monitor the efficiency of
individuals and departments; to inform management of what expenses are being
incurred and what incomes are being received; and whether they are within
standards or budgets. In essence, cost controls are for knowing where the
business is headed, not for discovering where it has been. That enforces the
preventative and proactive purposes of cost controls.
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