How to Control Food and Beverage Overhead Budget

26/01/2015 02:27

mixed foods and various spirits and wines in the table with white color table cloth

How to Control Food and Beverage Overhead Budget

 

Cost Control Guide

 

Every food and beverage manager have own style on how to control the food and beverage overhead budget and cost onboard the ship. To control the cost is not easy tasks is a matter of knowledge and expertise. Planning and set up cost control procedures are the first priority when you begin to your new challenge.  If you are new to the industries and it’s your first time to work onboard the ships, here are some tips.

 

Maintaining the overhead budget is additional working power of food and beverage manager but some are made a mistake even they are only doing the jobs. Maintaining budget sets by management is the top priority of food and beverage manager and you never change the budget just like that, may be with your recommendation to shore side office they can change as quickly as possible. Make sure Captain knows and aware for changes. I’ve been experience in my previous ship, the food and beverage manager is very smart in controlling overhead budget and the management is happy because too much money saves for every cruise. But, what happens, the captain notice that the food serve in officers mess is not same as before, steak, seafood, salad, etc. All crew members are complaining about the food changes in crew mess. So, What happens next, the captain call the Food and Beverage Manager to explain what happens and the food and beverage manager explained that he cut the food budget and he already reported to the shore side office the changes. The food and beverage manager declared the 15% under budget to the shore side to gain more appreciation which is good, but onboard the ship is not good everybody suffer for that action. The budget for the officers and crews must be spend before end of the month, food and beverage manager jobs is to maintain the budget level or if you wish to work more years onboard the ship you have to make sure that for every decision is favorable and balance. Remember, Captain is the powerful man onboard the ships he can do anything to stabilize the ship and crew and be a good captain. So, be careful if you make a decision.

 

If you wish to have a good control in your budget in the galley department you must give complete food supplies for crew in the crew mess 24 hours. Never closed the crew mess room, I mean after the dinner time in crew mess you must put some foods likes cereals, milk, bread, pastas, fruits, coffee & tea, or light food available. This is to avoid the ninja’s style to get food from the galley by the cook or crew.

 

The food and beverage overhead budget control

1)      Every department head have a list of overhead budget on their department they must   aware in reducing their spending and not exceeding to the budget.

2)      Be careful on purchasing items, must have a policies that requires bids at least (3) three suppliers or vendors, (actually in the cruise ship food and beverage purchasing is not responsibilities of the food and beverage manager this is shore side  office jobs-accounting department)

3)      The food and beverage manager is responsible to plan, direct, supervise and control all activities of the food and beverage operations. Set up plan/procedures and monitor every details of actual consumption or budget. Spending and operations on menu, food and beverage inventory, deliveries, food consumption, non-food items, etc.

4)      Must be aware to all small things food samples, cleaning supplies, office supplies, visitors, special request, complimentary, parties, menu planning etc. and to make sure that all items are recorded. Familiarize all information below that can be helping your cost control as follows:

 

Examples:

Galleys and Provision Cost Control

Procedure 1

Passengers budget per day is $13 x 2,000 = $26,000  x  7 days = $182,000

Crew food budget per day is   $ 9 x 1000      = $9,000  x  7 days = $  63,000

Total food budget per day ------------------------ $35,000  x  7 days = $ 245,000

==========================================================================

Total 7 days Cruise Budget ________________________________$245,0000    

==========================================================================                                               

 

Procedure 2

Provision Store

Provision master is allowed to issues or release food and beverage stocks, only the maximum of $35,000 budget per day. Exceeding from the budget is not recommended. This procedures is to give more power to the chef to plan/study and accurate the food menu for the day. Normally the Provision Master is allowed to issues food and beverage stocks to galley department with the approval and signed by the executive chef.

 

Procedure 3

Galley Store Keeper

All food issued from provision stores must be stored in the galley store. (The galley store keeper is very important help to control the cost) Some passenger ships they don’t have galley store keepers, which is a big mistake that is why they are always loss of cost control.

 

Make sure that every food item issued from the galley store keeper has corresponded food requisitions from the executive chef or chef de partie. This is to control the flow of the food stocks and budget.

 

Procedure 4

Executive chef and Chef de Partie

The $35,000 budget per day must be monitored by the executive chef and supervise by every galley section in-charge. So that at the end of the day there is a check and balance of the food budget for every galley section.

 

Sample of cost control: if you have 2,000 passengers you must prepared 2,000 salads, 2,000 main courses. If you prepared more than 2,000 then you must write down the reasons.

 

Procedure 5

The executive chef must check the food cost of all food served in the restaurant against galley store inventory every day after restaurant operations. If you do it after the restaurant operations you can do it. Because, too much galley personnel to manage the small inventory before galleys will close. All food stock issued or released by the galley store keeper must be recorded after galley operations for the day.

 

Restaurant Department

Restaurant must be reports all staffs and officers’ food served including all extra food served or special food request by the guests, visitors, port authority, special function or parties.in the dining room daily.

 

All food served from restaurant for the day must be tallies against food released from the galley daily. (This is not common happenings onboard the ships but need to control the cost)

 

After dinner time when the restaurant closed mostly of the dining room crews are always having a dinner in the side part of restaurants, which is not included on the budget.  If you have 100 dining room crews that having a dinner every night is a big food cost discrepancy at the end of the cruise report. I suggest to include all dining room crews for dinner food cost (for record purposes only)

 

Make sure that all food served in the dining room is recorded and use as counter check from the galley food cost consumption, and also  to double check if the officer, staff, entertainers and concessionaires are having food in the dining room, because, they have food budget prepared in the officers and staff mess.

 

For all food and beverage wares such as: glass, plate, silver, flat, china, cup and saucers etc. there must be a rules to maintain the stock inventory. It’s a normal that accident can happen while the waiter is serving the food its either carelessness or accident and at the end the company will suffer for the wrong judgment, I am favor to pay what you break. It’s a simple judgment.

 

The procedures are more effective control from provision to galley stores, from galley stores to galley preparation, from galley preparation to restaurant, from restaurant to executive chef.

 

Bar Department

For every bar outlet must have daily physical inventory and the bartenders are responsible to conduct bar inventory every after operation time.  The bartenders are more responsible for the bar stocks once they prove that the systems worked and at the end of the cruise you don’t need to dig and dig or searching for the problem

 

Some bartenders are irresponsible or they don’t care about the cost. To avoid higher bar cost at the end of the cruise the cost control procedures must be apply that bartenders are responsible to pay all bar stock missing in the bar outlets. This is very effective control to maintain the bar cost on level.

 

Cleaning Supplies (all department)

Cleaning Supplies are hidden cost but can become your problem when balancing the budget, must be aware on the inventory restriction to make sure that all stocks including loose stock must be include in the inventory report. This is the way on how to get the actual consumption of the operation perfectly.

 

The preparation of food and beverage overhead budget is an exciting job especially if you really monitored the operations 100%. With the above procedures and you have an opportunity to monitor your food cost daily and nothing to worry at the end of the cruise. To prepare the budget you must collect all reports from bar, restaurant, provision and galley department. Please see below:

___________________________________________________________________________________________________

Sample of Overhead Budget Report (7 days Cruise)

Passengers budget per day x 7 days is $13 x 2,000 = $26,000 x 7 days  =   $182,000

Crew food budget per day x 7 days is   $ 9 x 1000 =    $9,000 x 7 days   =    $ 63,000

Total food budget per day x 7 days-------------------- $35,000 x 7 days  =  $ 245, 000

___________________________________________________________________________________________________                                                                                                                          

Description/                                Beg.                     Delivery              Stock               Consu              Closing

Items                                           Invty.              Received             Issued              mption             Balance

Provision Inventory Report - Food Item and Non-Food Item (7days Cruise)                                 

Beg. Inventory                      $269,500

Stock Delivery                                      $245,000

Stock Issued                                                                                           $245,000

Closing Inventory                                                                                                                                                     $269,500

____________________________________________________________________________________________________

Galley Food Cost Report (7days Cruise)

Passengers                                                                                                                               $245,000                                           

Visitors, Port authority,                                                                                            -0-

Officers  & Staff                                                                                                                                -0-

Entertainers                                                                                                                          -0-

Concessionaires                                                                                                                         -0-

Crew Members                                                                                                                             -0-

Others Food Cost                                                                                                                            -0-

Non-Food Item                                                                                                -0-

____________________________________________________________________________________________________

Restaurant Food Served Report (7days Cruise)                                                                      -

Passengers                                                                                                                              2,000                                             

Visitors, Port authority,                                                                                                                 -0-

Officers  & Staff                                                                                                                             -0-

Entertainers                                                                                                                                   -0-

Concessionaires                                                                                                                           -0-

Crew Members                                                                                                                          1,000         

Others Food Cost                                                                                                                          -0-

Non-Food Item                                                                                                 -0-

___________________________________________________________________________________________________

Bar Cost Report for complimentary drink served (7days Cruise)

Visitors, Port authority,                                                                                                                -0-

Special Parties                                                                                                                                -0-

Captains Party                                                                                                                                 -0-

Officers Complimentary Drinks                                                                                             -0-

Others  Complimentary drinks                                                                                                 -0-

Others Food Cost                                                                                                 -0-

Non-Food Item                                                                                                 -0-

=======================================================================================

Total                               $269,500          $245,000           $245,000               $245,000        $269,500

=======================================================================================

Sample Computation:

( 269,500 + 245,000 =  514,500)

(514,500  -  245,000 = 269,500 )

=======================================================================================

Closing Inventory - End of the Cruise                                                             $269,500

=======================================================================================

 

Summary Report:

Beginning Inventory from day 1                                                              $269,500

Less: Closing Stock Inventory on day 7   End of the Cruise                               $269,500

Overhead Budget Cost of End of the Cruise (No Variance)     ($0.000)

=======================================================================================

Beginning Inventory for the next cruise                                                           $269,500

=======================================================================================

 

The above food and beverage overhead budget format is an only sample report onboard ship that can be guide and help others that are willing to learn and work in passenger ships.  You can make a template or format in the excel and program automatically with complete result of food cost monitoring system.

 

The provision stock delivery from chandler or suppliers was always delivered on the last day of the cruise. At the end of the 7 days cruise the ship has a remaining 10% stock on hand that can be used for the day. To make everything easy to control including the placement of provision purchase requisitions or order to shore side office must have systems to follow.  The standard procedures of placement of provision requisitions or order are:

 Examples:

Date: February 01, 2015

a)One set of Provision Requisition or Order (for 2,000 pax) – To be delivered on  February 7, 2015

b)One set of Provision Requisition or Order (for 2,000 pax ) – To be delivered on February 14,2015

c)One set of Provision Requisition or Order  (for 2,000 pax ) – To be delivered on February 21, 2015

 

You must have 3 sets of Provision Requisition or Orders

a) 1 set  is stock on hand (The stock was already consumed from previous 7 days cruise)

b) 1 set is for delivery when at port or end of the cruise.( To be deliver once the on port)

c) 1 set is for preparation of Provision Requisition at the end of the cruise.(Ready to Place the Provision Requisition or Order to Shore side.)

The above system is a 3 cycle provision requisition or order, and this is to avoid out of stock onboard the ship.

 

You can see the opening inventory of the provision is $269,000.  The reason is 10% of total cruise budget must reserve for un-predicted situation onboard the ship and to use for emergency plus and minus, now, it’s defend on the company policies. I like to explain that the provision stores must have more or less 10% stocks on hand reserved and you cannot put more stocks in the provision store, if you stored more stocks there are a possibility to loss income, from the point of view of the accounting management, if you have 50% extra stock in the provision store is a big money loss, like for example, if you have 50% stock in provision stores and is not moving just for reserved you have a total $122,500 sleeping money. If you put $122,500 in the bank for time deposits you can earn more or less $9,800 per year or it’s defend on the bank agreement.

 

All above mention is security of cost control. The food and beverage manager in passengers ships are more concern on food and non-food items or operating and departmental budget and other budget is shore side office or accounting department jobs.

 

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