Planning process has been referred to as one of the most important task within the food and beverage sector. Proper planning will help to ensure smooth operations of the event or function. The planning process in food and beverage event takes into consideration the use of financial statements, the ingredients as well the recipes to be included in the menu. This assignment takes into consideration the proper use of financial statements along with the purchasing process and the factors to determine the success of the service followed by recommendations for further improvement.
Discuss the use of financial statement in food and beverage event
Definition & Purpose: Financial statements refer to the statement which is used by any organization to keep a record of all the financial transactions along with the various accounting details in different manner. The financial statements can be regarded as useful in various ways while planning an event or series of events (Rotan, 2005). The use of financial statement in planning food and beverage event is to see what it costs to plan an event taking into consideration various variable & fixed costs. It is an important task to maintain the financial statements so as to see whether the event has generated profit/loss and thereby decide what is to be to improve the operations in the near future.
Income statement: The income statement for food and beverage industry consists of the following aspects such as:
- Cost of goods sold (COGS)
- Utilities expenses
- Interest expenses
Balance Sheet: The balance sheet for food and beverage industry consists of the following aspects:
- Food costs
- Food purchases
- Food inventory
- Account receivable (B/R)
- Accounts payable (B/P)
Advantages & Dis-advantages: One of the major advantages of financial statement in food and beverage events is that, recording of all the expenses is done in an appropriate manner. The expenses and its list are very high as every event demands for the same (Rotan, 2005). Hence, financial statements help to ensure proper recoding of all the expenses in a systematic manner. The planning or the event manager who is responsible for the event will be able to have an idea as to where the money has been invested and how much. These financial statements will also provide the event planner whether profit or loss would occur in the event. This will help the person responsible for the same to manage the accounts as well as the funds accordingly. The event planner can make a budget and the financial statements might help in identifying whether the arrangements are done in a proper manner or not and see whether the event is managed within the stipulated budget or not (Davis, Lockwood, Pantelidis & Alcott, 2013). Financial statements in food and beverage event can also act as a transparent piece of paper for the external parties i.e. to transfer the valid finances to various other parties. The use of financial statements in food and beverage event is immense, the difference between earnings and expense could be made and then, appropriate managerial decisions can be taken by the event planner in the due course of time. With the help of a detailed balance sheet, one can have a look at the assets, list of creditors, liabilities, etc. Such types of information have been referred to as very crucial for the success of any event. The financial statements will help the decision makers to make long term decisions which might affect the success of any event. Lastly, financial statement will help to analyse the financial health of any planned event (Rotan, 2005).
Dis-advantage of financial statement in food and beverage event is that, it can mislead the user as the statements prepared are not very accurate. These statements cannot be used for future planning as these statements are prepared by using historical data and past situations.
Analyse the purchasing process
Once is event has been planned, the next step is to purchase the raw materials for the production of the same. The purchasing process in food and beverage industry has been listed as follows:
Requisition of the equipment
Ø Menu style
Ø Organization’s standards and aim
Ø Service style
Ø To look for fresh products
Ø Look into the expiry dates
Ø Have enough stock in order to run the event hassle free
Look for Suppliers
Ø Local suppliers
Ø Food brokers
Ø Location & facilities
Options for Delivery/ Receiving
Ø Short notice
Ø Best value at affordable prices
Options for payment/ Invoice
Ø Bank transfer
Storage of equipment supplies
Ø Cold storages
Ø Big freezers
Ø Walk in coolers
(Source: Principles of food and beverage management, 2013)
Factors to determine the success of the service
Factors which determine the success of the service has been referred as under:
Team work: Working in food and beverage industry means performing all the activities in a team. The key to success in food and beverage industry is a well-co-ordinated team who motivates each other and encourages performing at its best (Rotan, 2005).
Food safety: In today’s environment with an increase in the number of health hazards, food and beverage industry is incorporating various food and safety norms to provide the best quality food to its customers. ISO 22000 is the standard which takes into consideration food safety.
Equipment: Food and beverage industry is a complex industry which deals in diverse equipment’s. For example, use of mobile equipment’s such as different types of trolleys to carry food from one guest to another; glassware, linen/ table cloth, all-purpose spoon, fork, knife, etc. It is the main task of the event manager to see what all equipment’s are required and in what quantity (D'souza, 2009).
Health and safety: Health and Safety plays an important role in the success of the food and beverage event. It shall be taken into consideration that, every food and beverage industry shall be accompanied with OHS regulations which help in prevention of accidents and injuries. A proper program shall be made in order to deal with the same (Ninemeier & Hayes, 2010).
Security: Like any other industry, food and beverage industry is also susceptible of various cyber threats and attacks. Big companies who deal in food and beverage industry are found to be cyber-attacked with respect to payment information (Dopson & Hayes, 2009).
Presentation food: Presentation of food plays an important role in the success of food and beverage industry. Better the presentation of the food more is the demand of the same. Presentation plays an integral part in the sales of the same.
Recommendations for improvement
Some of the recommendations for improvement in the food and beverage industry has been listed as follows:
- Proper menu: A set of relevant menu plays an important role in the success of food and beverage industry. These days’ people look for healthy options such as baked chicken, wraps, salads, energy bars, soy products, gluten free pizza, sandwiches, etc (Davis, Lockwood, Pantelidis & Alcott, 2013).
- Efficient operations: With the help of efficient operations, the food and beverage industry will be able to enhance its level of sales. For example, placement of menu plays an important role in grasp more number of customers. Leaflets for the same shall be kept on the counter so that people can read it without fail (Cousins, 2014).
Hence, it can be concluded that in order to make service success huge requirements are to be focused upon. One of the main requirements is to use the financial statements in the best of its manner followed by the purchase process as discussed in the above assignment.
Cousins, J. (2014). Food and Beverage Service. 1st ed. London: Hodder Education.
Davis, B., Lockwood, A., Pantelidis, I. and Alcott, P. (2013). Food and Beverage Management. 1st ed. Florence: Taylor and Francis.
Dopson, L. and Hayes, D. (2009). Managerial accounting for the hospitality industry. 1st ed. Hoboken, N.J.: John Wiley & Sons.
D'souza, M. (2009). Food & beverage. 1st ed. Chandni Chowk, Delhi: Global Media.
Ninemeier, J. and Hayes, D. (2010). Procurement of hospitality resources. 1st ed. Upper Saddle River, N.J.: Prentice Hall.
Principles of food and beverage management. (2013). 1st ed. Boston: Pearson.
Rotan, B. (2005). Analysis of financial statements. 1st ed. Washington, D.C.: U.S. Dept. of Agriculture, Rural Business-Cooperative Service.
Ward, L. (2005). Extended performance reporting in the Australian food and beverage industry. 1st ed.