Sample Paper on Financial Controls Used In Food and Beverage Operations

Introduction

Food & Beverage operations not only deals with the preparation and service of food in the eateries, but is also concerned with how the guests experience the service in their rooms, restaurants, bars, banquets, pool, conventions, corporate meetings and or small seminars; these are the places where most guests interact. The food and beverage operations, also referred to as food service operations take place in a continuous cycle that entail various activities at various levels (Richard, 2003, 73)[1]. The cycle incorporates identification of the consumers and the target markets, formulation of policies to govern the operations, interpretation of the market demands, planning and designing of facilities required, provision for foodservice and other purchase requirements to meet the needs of food production, production and services, cost and revenue controls and monitoring of customers satisfaction. The food cycle can be used as a basis to analyze how different food service operations work. The result of this report will provide an opportunity to investigate the importance of financial controls within foodservice operations, plan and develop recipes and menus better, and think about how to apply them into future work (Roy, 2013, n.p)[2].

a)     Use of financial statements in food and beverage operations

The financial control is an important aspect of the cycle, it regulates the costs of foodservice provision giving the service providers competitive advantage by trying to keep their costs as low as possible. These cost controls, also referred to as systems of measure, are important in gauging the progress of the business towards achieving its intended goals, they establish standards and procedures and help in monitoring performance of the business. The food and service operators can improve profitability with efficient purchasing, stock management and cost controls through strategies such as purchasing stock using free credit from suppliers, maintaining minimal yet sufficient stock, use of quick turns to provide space for goods to be sold before the bills are due (Chand & Ambardar, 2013, 6)[3].

The uses of financial statements in this case, include evaluation of the business performance, which incorporates the use of Income Statements, Balance Sheets, Cash flow Statements, the Operating budgets Statements and other management tool. The income Statements provide details on the gross income and the expenditure over accounting time. This helps the service providers to estimate on the average requirements and plan for the future budgets as well as monitor rooms for expansions (Chand & Ambardar, 2013, 6)[4]. Income statements are also beneficial in establishing profits and losses of business, and recommend adjustments. The Balance sheets show the business assets and liabilities. It can be helpful in calculating the Net Worth of a business, thus establish the financial health of the business. Cash flow compares the accessible cash within the business to the bills due in the year hereafter. The operating budgets forecasts on the inevitable expenditures of the business in achieving its objectives. For effective planning for the ‘end of Term’ Party, the hosting pub would revisit its financial statements and review operating budgets in regard to the number of clients it serves, available cash and the range and costs of provisions for the projected population (Chand & Ambardar, 2013, 6)[5].

b)    Demonstrate the use of cost and pricing processes

The prices of foods and beverages provided by a restaurant are direct determinants of profit or loss in the business. While considering the most appropriate cost and pricing process, the service providers take into account various influencing factors. These factors act as guides in pricing or changing menu prices. The factors include Direct Costs, which are the prices of the ingredients associated with the food itself, Indirect Costs that do not include the ingredient costs but other aspects that add value or quality of the service, Preparation and labor, overhead expenses, Volatile food costs, competition, price boundaries and the type of services offered. Ideally, the prices set for various products and services are viewed from different points of view namely; the demand driven, Competition and the Ideal food cost pricing methods (Chand & Ambardar, 2013, 6)[6]. These views help in compounding reasonable prices for the food items and other services to gain competitive advantage. Using the financial records and statements, the service providers can determine the most cost effective suppliers in order to reduce production costs, thus provide equally cost effective food service operations (Roy, 2013, n.p)[7].

c)     Compile food and beverage menus for a hospitality event

For a hospitality event comprising 50 Adults and 10 Children among whom 10 are Vegetarians and 4 are Diabetic, the most cost effective menus would be the Buffet, which covers a wider range of products at lower costs. In this case, all the foods are prepared and display made elaborate on the tables so that the guests are able to help themselves (White, 2007, n.p)[8]. With the knowledge of the guest profile, this menu would incorporate a number of milder provisions to serve a portion of the group, some seafood and vegetables for the vegetarians and a lot of spicier more adventurous meals for the younger and the middle aged attendees (White, 2007, n.p)[9]. The menus for the event for the 50 guests would include the following;

Meats

Herb Roasted chicken, Peach Glazed Pork Loin, Fried Chicken and Seasonal Fish

Starches

Wild Rice Pilaf, Garlic Mashed Potatoes, Cornbread Dressing, Baked Potatoes, Roasted Red Potatoes, Sweet Potato Mash and Twice Baked Potatoes

Vegetables

Glazed Carrots, Sweet corn, Roasted Seasonal Vegetables, Sweet peas with Bacon Sautéed Green Beans and Steamed Broccoli & Carrot

Salads

Caesar Salad with Fresh Parmesan and House made Crotons, Citrus Salad of Spring Greens, Orange Supremes, Pine nuts and Feta with Balsamic Vinaigrette, Garden Salad of Romaine, Tomatoes, Mushrooms, Mozzarella, Bell Pepper, and Italian Dressing (Bond, 2014, n.p)[10].

Desserts

Chocolate Decadence Cake, Apple Pie, Strawberry Cheesecake, Strawberry Shortcake, heesecake with Chocolate& Strawberries

 

Refreshment Break

Assorted domestic Cheeses, served with Crackers, Fresh Fruit, freshly brewed Coffee, selection of Hot Teas, Bottled Water, Variety of Candy, Freshly Popped Popcorn and Sodas (White, 2007, n.p)[11].

d)    Justify the selection and suitability of recipes for menus

By reviewing the food costing as well as the dietary requirements of the recipes menus, the stipulated recipes is effective as the event provided the wider range of coverage by the food (Keil et al., 2004, 27)[12]. It has incorporated a variety of options for the guests thus, each group of the guests can get an interesting assortment of interest. On the other hand, it also includes low calorie foods and drinks to serve the dietary needs of the Vegetarians and the Diabetics. The menus also cover interesting range of foods and beverages that are low on costs and easily available yet still very enjoyable for the entire categories of the group (Forger, 2007, n.p)[13].

Hospitality events are usually expensive and challenging to execute. However, with good planning and review of the financial statement in the Foodservice operations, it is easier to formulate cost effective budgets and menus to serve a larger number of individuals in a given event. Suitable menus on the other hand, are considered to have low cost, yet capture the wider spectrum of individual dietary requiremen

End Notes

1, Richard, W.E. 2003, “Introduction to Management in the Hospitality Industry”, Journal of Travel Research, vol. 31, no. 4, pp. 73.

2, Roy C. W. 2013. “Key concepts in hospitality management.”  Reference and Research Book News, vol. 28, no. 3.

3, Chand, M. & Ambardar, A. 2013, “Management Accounting Practices in Hospitality and Service Enterprises: A Comparative Research”, Journal of Commerce and Accounting Research, vol. 2, no. 3, pp. 1-9.

4, Chand, M. & Ambardar, A. 2013, vol. 2, no. 3, pp. 6.

5, Chand, M. & Ambardar, A. 2013, vol. 2, no. 3, pp. 6.

6, Chand, M. & Ambardar, A. 2013, vol. 2, no. 3, pp. 6.

7, Roy C. W. 2013. “Key concepts in hospitality management.”  Reference and Research Book News, vol. 28, no. 3.

8, White, E. 2007, Time to soup up your menu, Reed Business Information United Kingdom, Sutton.

9, White, E. 2007

10, Bond, J. 2014. Food and beverage distribution: a healthy part of a balanced supply chain, [Warehousing Management Edition] edn, Peerless Media, Framingham.

11, White, E. 2007, Time to soup up your menu, Reed Business Information United Kingdom, Sutton.

12, Keil, C.B. et al. 2004, “Kitchen Hood Performance in Food Service Operations”, Journal of environmental health, vol. 67, no. 5, pp. 25-30.

13, Forger, G. 2007, Food and beverage: Top practices, issues and metrics, [Warehousing Management Edition] edn, Peerless Media, Framingham.

 

 

 

 

 

 

 

 

 

 

 

References

Bond, J. 2014, Food and beverage distribution: A healthy part of a balanced supply chain, [Warehousing Management Edition] edn, Peerless Media, Framingham.

Chand, M. & Ambardar, A. 2013, “Management Accounting Practices in Hospitality and Service Enterprises: A Comparative Research”, Journal of Commerce and Accounting Research, vol. 2, no. 3, pp. 1-9.

Forger, G. 2007, Food and beverage: Top practices, issues and metrics, [Warehousing Management Edition] edn, Peerless Media, Framingham.

Keil, C.B. et al. 2004, “Kitchen Hood Performance in Food Service Operations”, Journal of environmental health, vol. 67, no. 5, pp. 25-30.

Richard, W.E. 2003, “Introduction to Management in the Hospitality Industry”, Journal of Travel Research, vol. 31, no. 4, pp. 73.

Roy C. W. 2013. “Key concepts in hospitality management.”  Reference and Research Book News, vol. 28, no. 3.

White, E. 2007, Time to soup up your menu, Reed Business Information United Kingdom, Sutton.