Wastage??

How do you account for wastage in relation to your food cost and P&L statement? Thanks

waste is part of your food cost…no need to make another line item - better off ensuring you have little 2 no waste!

Even a buffet throws stuff out, but it still must be included in your food cost, else your P & L is bogus, reporting low FC but inflated “waste” expense

Semper Fi!
U.S.M.C. Auditor

It is part of your food cost but how you track it is more of a personal preference…When I was in business I tracked it as a separate line item so I could see it and work on improving it if it became a big enough number to worry about…

PS…Cheesy I am hearing lots of good feedback on your place…

Thanks Royster - still hoping you will drop by soon so I can pick your brain.
Like you I have a line on my P&L statement to track it.
Thanks

I don’t mean 2 start an “argument”, but I will

Tracking waste - why is there waste? Did you buy/produce 2 much? - then stop!

In my 30+ yrs, you need to watch your food cost & how it compares to your “projected” cost…

A “Waste” line item is usually padded because you aren’t watching the pennies further up…

Your true food cost is then misrepresented…

If, say, your cooler goes down & you truly have spoilage, you should reduce your purchase account & then have a “spoilage” line item, under other or misc. expenses

It does not matter how you “slice and dice” the numbers so long as you know what they mean…The thing to remember is more detail always gives you more to work with than less detail…

And perhaps you need to track waste and spoilage and any other food cost that does not get sold…At a steakhouse I used to work at they counted dishes and cutlery every night and every item ended up as a line item on the report prepared by the manager who was responsible…When the office manager consolidated all the reports from all the departments most of the detail was not shown…But it was always available as required…

When I file my income tax, I give the the Feds the 20 or some lines they require which means there is very little detail…But in my Quick Books I do very detailed tracking so I can produce any breakdown I require…If you want a report that reads your way I can do it…If someone else want a report another way, I can do that as well…

2 continue the “arguement” - it DOES matter how you slice & dice the #'s!

Generally accepted accounting principles, especially when dealing w/a banker or broker, want 2 know “hard” #'s - if the bank see’s your “waste” why of why are you the best candidate for a loan, if you have “waste”

Brokers want to know “cash flow” and the “magic” %'s when selling your biz - your asset should show itself in the best light!

IMHBCO - waste = poor management…

Dardens, Chili’s, CiCi’s, U.S.M.C., Holiday Inn, Hilton, Sheraton and even Golden Corral don’t track “waste”

What are they doing and why?

Counting silverware & linen is useful or tracking “actual” costs, as your actual food cost s/b tracked…

Follow “accepted” accounting principles…

Semper Fi!
U.S.M.C. Auditor

And with good data you can generate any kind of report the banker or broker wants…For internal use I prefer lots of detail…And you are right, waste may not look good to “your” banker…But if it is a line item and shows up as a real small number it may suggest to another banker you pay more attention to details than most…And we know bankers are fickle…A business plan that may be “brilliant” to one banker is “trash” to another…All personal preference…

I wasn’t expecting this type of response but since you are wondering why we produce waste I will answer it. We do over 20 16" inch pizza by the slice each day. Based upon the activities at the high school right beside me I may have 4 or 5 slice left over at the end of the night and felt it prudent to track them so I could hold people accountable.

I should also clarify that the P&L statement I refer to is “in house” not something I would submit for income tax or “out of house” business.

Whilst I fully agree that ‘waste’ is a subset of food cost I would seriously challange Patroit’s point on why you would track waste?

Why wouldn’t ANY good operator track something which is a cost to the business??? Anyone who doesn’t track or manage waste is IMO foolish to say the least.

'Tracking waste - why is there waste? Did you buy/produce 2 much? - then stop!

We operate a strict shelf life policy and unfortunately we do waste items; yes it comes up in my food cost BUT I still track it so that I know what I am wasting and why I am wasting it. IMO any business will have a guenuine waste unless they have either huge volume or buy in small quantities or have LONG shelf life.

So Cheezy, don’t show it in your P&L but DO track it in your management info.

I agree, if you’re running a tight ship, you NEED to track waste. If you have enough waste in a week to make a pizza, then you should want to know where that pizza went.

Agree with the shelf life part too. My other 2 places I worked for allowed no more than 5% food cost waste. And with short shelf life items, there will be waste, especially for items that didn’t particularly move that week.

as I fuel the flames…

tracking waste on the side & in a P & L is another…

Follow acceptable accounting practices & look @ industry leaders…

There is no way CiC’s could track “waste” - its just a cost of business…(we threw bus tubs full of “stale” pie away each day) but we still ran low 30’s food cost…

waste is food cost

sure, its food cost but if you don’t track it then you’re leaving yourselve wide open to theft no matter how big or small the business, mom and pop or cici’s

I write from experience and yes I have always tracked it hence I knew straight away!

What are you doing, weighing the trimmings from slicing veggies and the catch tray from the make line? Counting boxes used on mistakes? Wait, STOP!! count those souffle cups that just fell on the floor during the rush… Did we drop two skins last night, or was it three?

This is absurd. There is no way to measure “waste.” There are far too many things to keep track of as it is. Waste is part of food cost. If cost is too high, you try to figure out if the issue is price, portions, theft or waste but seeking to track waste is not useful.

Accounts/Auditors are quite ana*l & are trained to follow “generally accepted practices…”

Tracking high FC is important and a “waste” sheet, for instance, can be helpful…

but collecting “data” for data’s sake is indeed futile…

comparing boxes used to dough balls made & pies sold will catch many an inexperienced thief, but those that want 2 steal will figure out a way around many of your traps…

weigh your cheese on the make line & you’ll save a tone of cash…

Again, I don’t believe in re-inventing the wheel - high food cost is just that…there are many culprits that may need investigation, but - look what successful operations do & mimic their good/strong traits…

Listen to Bodega

Semper Fi
U.S.M.C. Auditor

The way we track waste is if we have to remake pizzas. A remake gets entered into the POS system and then gets discounted to zero. We do a daily cheese inventory to see how our portion control is doing, so we need to know that those pizzas get accounted for, lest we believe our cooks are using too much cheese.

We try to maintain cheese usage to 1% of ideal, so a couple of extra pizzas is important to account for.

Other than that, we don’t track waste at all and there’s no entry on the P&L for it.

sorry I’m not talking about remakes or the casual/minor item dropped on the floor’. My definition of waste is any significant item of food which is disposed of i.e. an item has say gone out of date or has been damaged etc not a handful of cheese or a pie which has been dropped or made extra.

Looks like we’ve been talking about slightly different things.

I make mental note of significant items that end up being tossed but it does not amount to enough to make a difference in food cost even at the weekly level. Once or twice a year we toss 3 lbs of spring mix or a flat of mushrooms. A little more frequently we dump a few trays of over-proofed dough but even 10 trays of dough only amounts to maybe $30. $30 into our weekly sales is a rounding error. In ten years there have been maybe 10 times that we had to toss 2-3 lbs of some meat and even fewer that we spilled a bucket of sauce or a whole tray of cheese.

I agree that if I had to toss 100lbs of cheese during a slow week (has never happened) I would want to be aware of that fact to understand why my cost for the week was a couple of points high but in the end, waste is part of food cost and except in exceptional circumstances, (which I have never experienced working in five different pizza operations at various times since 1978 and owning two stores for 10 year) I can’t see it being a meaningful factor.

In the course of a year I think we might “waste” a few hundred dollars of product in 200K of total food cost. As PP points out above, portion control is a much bigger factor. Uncontrolled, my kitchen could use that much extra cheese in a week.

Wouldn’t waste be able to be tracked with Actual Food Cost minus Expected Food Cost?