monthly expense spreadsheet for catering

Get the basic Declining Budget template below!ĭownload a basic version of a restaurant Declining Budget below. Note: A good rule of thumb is to forecast on Monday and make your adjustments on Thursday (prior to placing your weekend orders). In turn, this allows you to work with your vendors proactively on procuring the highest quality products while sticking to your budget. Thus, staying disciplined and following a Declining Budget enables you to notice pricing fluctuations on critical items. Product prices are volatile, especially on produce, dairy, meat, and seafood. The Gallon of Gas Syndrome simply means you can only go so far with what you have. Do you have the “Gallon of Gas Syndrome” ? You’ve forecasted your revenue correctly, and you’re ordering the correct amount of product.Targeting too low won’t allow you to spend enough on product to service your forecasted sales (even when they are accurate). Are your targets reasonable ? Can you run a 33% food cost when you’ve been averaging 38%? It is vital to be realistic in your expectations.For example, if you notice that your week is busier than usual, but you don’t adjust your spending accordingly, you may not order enough product to satisfy all of your hungry guests. Not doing so places your operation in a bind. Is your revenue forecast accurate ? Pay attention to your daily sales and make adjustments.However, when you do, it typically means one of a few things: What happens when you spend more than your budget amount? The result is your available spend amount. The total purchases are summarized and subtracted against the forecast. How a Declining Budget actually works:Įach day, your sales are updated, and your purchases are recorded. You can see the adjustments to your spending targets and adjust ordering behaviors accordingly to hit budget goals by adjusting your total budget revenue in real-time to correlate with actual sales.

Thus, if used daily, supports keeping your variable spending in line with your fluctuating sales.Įxample #2) What TO do! A Declining Budget In the example above, we’re stating the following: Ultimately, using a Declining Budget gives you the ability to keep one eye on the fluctuation in your sales, and the other on how much you’ve spent IN RELATIONSHIP TO THOSE SALES. Total Cash On Hand $26,500 – Total Product Costs $40,000 = $13,500 of OVERSPENDING in one month. So, what happens if we spend the same amount of money buying our product each week, without actually knowing that we should reduce it based on the sales? Looking at the sales above, we’re $13,500 off in revenue from the 1st week through the 4th week ($20,000 – $14,500 = $13,500). Our sales can easily decline for the last four weeks because of the weather, a big sports game, or the holiday season. Examples of a Declining Budget: What NOT to do vs What TO do!

It’s easy to budget how much you’re going to spend (and ultimately make) when both the revenue you bring in and the product costs are static, but that’s simply not the nature of the game. Shelf lives can range from one day for produce to indefinite for items such as paper supplies. Product pricing also fluctuates tremendously based upon seasonality, availability, purchase quantity, quality, and total purchases made with a specific vendor.Īdded to the instability is that products have varying shelf lives (the length of time a product can remain on the shelf before it spoils). Many restaurants obtain revenue from multiple revenue centers, with Dining Room, Bar, Catering, Banquets, and Retail as the most common.Įach week, the sales from these revenue centers can vary widely based upon seasonality, weather, holidays, sporting events, construction, and new competition. #1) Restaurant Sales (Revenue)įactually, restaurant revenues are variable. To grasp how we use a Declining Budget, we must first identify the two vital factors for its success: restaurant Sales (Revenue) and Product Pricing. Ultimately a Declining Budget will support management in monitoring variable spending and fluctuating sales (revenue). What is a Declining Budget?Ī Declining Budget is used in the restaurant industry to help controllers and operators manage operational costs – more specifically, the relationship between sales (revenue) and the amount spent in relation to those sales. When used properly, a Declining Budget can be one of the best tools for stabilizing your costs as well as increasing your cash flow. One of the most essential tools in restaurant accounting to effectively manage food cost is a Declining Budget.

Monthly expense spreadsheet for catering