Fiscal management in food service

ELLA MAY N.
MENDEZ
At the end of this lesson you will be able to.
Discuss the restaurant investment
structure.
List types of restaurants operating
expenses
Understand and calculate labor cost.
Describe types of financial
management software used by food
service management.
Grasp the restaurant business plan.
Explain what include in a restaurant
income statement.
Demonstrate knowledge of the
restaurant budget.
Define and describe a restaurant daily
sales report.
Examine restaurant financial
statement.
FISCAL MANAGEMENT
 The process of keeping an organization running
efficiently within the allotted budget.
 “Fiscal” can be used interchangeably with word
financial.
 Fiscal management refers to the money
management within government entity.
What is financial management in
food service?
 Financial management is a vital part of the food
service industry.
 It is important that you are able to control costs,
use the budget wisely, and make profit in order to
successfully run your business.
Different financial aspect
of food industry.
Restaurant investment structure
Investment represent an
allocation of money with the
expectation of repayment with
interest.
Restaurant operating expenses (types
and examples)
Before running a restaurant, it is
helpful to understand restaurant
operating expenses. Find out
more about restaurant operating
expenses, including food, staff,
venue, and overhead.
 The Food in the Restaurant
-food is the most costly operating expenses.
The Staff in Restaurant
-the food you order does not just come out on your
plate raw. Instead someone cooks it, and someone
cleans the plates and the pan, and so on.
The Venue of Restaurants
-a restaurant needs to pay for its venue or the
physical location of the restaurant. Its not only the
rent that needs to be paid but also the utilities, taxes,
and even cleaning crews as well.
 The Overhead of Restaurants
-overhead or a fixed cost that doesn’t change with the
amount of business done, associated with a restaurant.
Restaurant often do not own their linens, even staff
uniform.
Restaurants Labor Cost
 Restaurant managers must be aware of and
carefully control the cost of labor. Labor cost are
the expenses of employee wages.
 Separating labor cost into job roles and categories
such as kitchen staff and front of the house staff.
Financial Management software for
restaurants
 Financial management software contributes to
improved profitability, customer loyalty, and
reduce employee theft.
 It falls into two categories.
Front of the House
 Front of the house software focuses on interactions
with customers. This is the software that handles
things like reservations, input of orders, customers
checks, payments and customer behaivior.
Back of the House
 Softwarefocuses on managing and monitoring the
behind the scenes operations such as inventory
management, supplier orders, employee
scheduling, and over all analytics.
Restaurant Business Plan
 A business plan for a restaurant is a blueprint for
the future of the organization, helping you attract
investors, chart a direction, help bring in partners
and executive, helps you clarify your purpose and
manage aspect of your establishment/ business.
EXECUTIVE SUMMARY- provides one
or two pages summary of the entire business
plan.
BUSINESS DESCRIPTION- it includes all
the aspects of your service offerings, the
history of your market, evaluation of your
competition, current event happening in
restaurant industry and your goals and
objectives.
PRODUCTS AND SERVICES- use to
describe what you are selling and identify
how your restaurant is unique or different
than the competition.
TARGET MARKET- who are you selling
to?
 Restaurant Income Statement
 Is a record of the money that comes in and the money that
goes out. For a restaurant, it means recording your sales along
with the expenses.(food and drink inventory and operating
cost)
Income amount
Food sales 40,325.76
Drink sales 32,567.82
GROSS PROFIT
42,030.71
Expenses Amount
Food cost 22,329.94
drink cost 8,532.93
 Restaurant Budget template
A budget is a plan to spend a certain amount
on various items. A budget for opening a
restaurant will include a start up cost such as
purchasing new kitchen supplies and
appliances, renting and remodeling the space,
food cost, license fees, and employee training
and wages.
 Restaurant Daily Sales Report
It is the report that shows how much the
restaurant makes each day. You can use this
report and compare your daily earnings to
your daily break even amount that you need
to earn each day.
It can also be used to compare the previous
reports to see if the business has grown or
not.
 Restaurant financial statement
The restaurant income statement not only
measures income, but it is also a great tool for
managing business.
The main components are sales, cost of meals
served, overhead and capital cost.
 Sample analysis of financial
statement
 Time series analysis- compares different months
income statement side by side to look for trends and
seasonality in sales or cost item.
 Contribution percent- which is the percentage of
what is sold that goes to pay all of the other
expenses.
 Benchmarking- calculate cost items percentage of
sales and compares the percentage to industry
standard to identify strong and weak areas.
 References:

https://study.com/academy/lesson/restaurant-financial-s
tatement-template.html
How important is financial
management in establishing
and running a business?