Losses and Gains
Possible Losses or Gains are calculated in one of two main ways:
- Total expected sales from changing stock levels are compared against total receipts for the venue or product type. This gives you a rough idea of whether shinkage is at an acceptable level.
- Expected Sales for every product line is compared against actual sales reported by your EPoS system. This gives you higher fidelity results but requires you to take into consideration the different sizes sold and cocktail recipes etc.
There are a number of reasons why the change in stock levels may not match your actual sales and not all of them point to dishonesty in your staff:
- "Ullage" or Wastage in Beer - this term is generally applied to the beer in a Keg of Beer that is expected to be wasted, primarily at the bottom of the barrel, at the top of the next or spilt into drip trays while pouring. Storing and handling beer correctly, keeping pipes clean and staff training can help minimise this. The amount of acceptable Ullage can vary from beer to beer so you should record these amounts when checking beer losses.
- Breakages - accidents happen, but these must be recorded and staff must understand that it is better for breakages to be known than being suspected of something worse.
- Over-pouring and under-pouring - whether free-pouring, using a thimble measure or an optic spirit measure, both over-pouring and under-pouring are possible both accidently and intentionally. Under-pouring can often be employed to hide other pilfery and can seriously damage service levels. If you suspect either, try retraining or check the CCTV.
- Complimentary Drinks or Mistakes - these are expected in most establishments so make sure these are recorded properly. Complimentary Drinks require proper approval and re-occuring or expensive mistakes may require further investigation.
- Unaccounted for Transfers - transfers to other bars or into the kitchen must be recorded correctly at both locations.
- Unaccounted for Deliveries - take care with delivery notes and ensure all arrivals are checked properly when they arrive. Also make sure they are stored correctly in a secure location and ensure proper stock rotation.
- Returns, credits and free samples - these must also be recorded and accounted for correctly as they can lead to confusing and suspicious results if missed.
- Not ringing in - this indicates theft in its purest form, there should be no honest reason why a sale should not be rung in immediately. Note that under-pouring in combination with not ringing-in is a classic combination for the more cunning pilferer.
Once regular and accurate stock checks are made and correct processes are in place, the opportunity for losses going undetected are significantly reduced and consequently will become a rarer thing.
Profitability Indicators
In addition to highlighting losses, your stocktake can also help with running a profitable business.
- Days Stock and Ordering - the stocktake can show how many days stock you have based on period sales, this way you can stop over-stocking (which reduces return-on-investment and can increase wastage and shrinkage) and prevent under-stocking (which can effect revenue and service levels).
- GP % - your Gross Profit indicator against each product shows you the percentage profit based on the cost of the expected sales and the expected or actual takings. This can help when fixing or updating prices, or determining which brands you want to focus on for marketing or promotions.
- Product Performance - product performance indicators can show which are your best and worse product lines. Badly performing products take up valuable shelf space and should be swapped out for new or different brands. Small price changes or cost negotiations of well performing products can lead to significant improvements in profitability.
- Total Gross Profit Amounts - these tell you how much money you have made by taking into account of the receipts, actual or expected sales and the cost of the actual stock used (excluding labour and other costs).
Current Stock Valuation
This shows the entire stock, often including fixtures and fittings for the entire business.
If this is for the sale or transfer of a business this would normally be performed by an independant auditor or Stocktaking Firm.
This kind of stock take is also used for calculating the stock value for quarterly or annual accounting. |
