From the time an invoice shows up at your restaurant until it shows up on your profit and loss statement, it travels through every significant control system you have- or don’t have!
Your account number with the vendor- what are your terms? Have they been updated after doing business with them for six months? Did they require any contract or deposit that should be adjusted? Vendor terms affect your cash flow so a review of terms every six months can really be beneficial.
Items you purchase may have discount or rebate programs you are eligible for if you are specifying certain labels- has your distributor mentioned any? Have you asked? If you are in rebate programs, who is tracking your rebates? You should have a quarterly update from your distributor to ensure you are remaining eligible for rebates.
Are you checking in your order from your order sheet? Most vendors do not make you aware of any shorts. If you are checking your order in off the invoice all that you will know is what they sent you- not what they didn’t send you. Delivery guys want to make the stop at your restaurant as quickly as possible- they want you to check the invoice only- you will be running around looking for a product you know you ordered at the busiest time of the shift and it won’t be there.
Have you set up exact specifications or labels for your products? You should definitely do this with items that you use a lot. Changing labels can adversely affect your yields from recipes. Always check the price if a substitution is made from your specs- they love to charge you the same price for a different product. Does the person checking in your product or coding your invoices know your specs? Have a specification list easily available to all.
How many vendors are you using in each category? The answer should be at least two. You should have credit terms set up with at least two vendors in each category (meat, dairy, produce, etc…). They should send you a price list each week so you can compare between the two. Don’t get fooled into thinking that you get better pricing or service by staying with one vendor- you actually get the opposite.
Make your kitchen and bar staff code their invoices per your General ledger codes – it does absolutely no good to have an office person do this. They know what they bought and what they will be using it for- make them put the codes down so your cost of goods categories are accurate.
What’s your policy for handling shorts and returns? It’s your policy that’s important- not the driver or the vendor. Writing it on the invoice accomplishes nothing. Have the items marked by your staff as short/refused and call your salesman immediately to have a credit invoice sent out. Pay by invoice and credit by invoice always.
Invoice approved by employee. Checking order in:
• Right order
• Right amount
• Request Credit Invoice
• Posting Price Change on Inventory Sheets
• Coding to correct GL Code
• Verify Extensions
• Verify Coding
• Apply credits
• Load into accounting package
• Generate Payment
• Reconcile Statement
As you can see- the real determining factor of receiving the correct product is heavily weighted on the employee who first handles the invoice- this is most times a lower level and lower paid employee. Think about your procedures and who you want to be handling this transaction- in the end, whoever touches the invoice first is going to have the most impact on your profit!!
Author: Jean Hagan