Thursday, August 29, 2013

Cost Controls Are Not Just For Detecting Dishonesty

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. Many independent operators feel that their physical presence and the hiring of family members eliminates the need for cost controls. Once they progress 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 and 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.

 Return to Restaurant Experts