Cash on the Shelves? Maximize Cash Flow with the Days Left Method
The pandemic changed the way business is done in many ways – especially in the foodservice world. The significant reduction or even elimination of business made the focus on expenses critical. Operations that could cover mistakes with volume were no longer able to do that. While that situation was unprecedented, the lessons learned from it could prove invaluable. Operating with as little excess inventory, waste, spoilage, theft or portioning issues was critical then but there is no reason it should be less important now. Perhaps the cost control approach used to survive the pandemic could now be used to boost profitability.
If someone asked me what one thing I would do that would have the greatest impact on cost control, I would probably choose to implement the days left method. The method itself is fairly simple, but the ripple effects are significant and touch almost every aspect of cost control in foodservice. It can be stated simply by saying the goal of days left implementation is to have only enough inventory of each item used in the F&B operation to get to the next delivery of that item.
In order to determine how many days are left on the shelf, we need to know our average daily usage. For example, if we use 10 cans per day and we have 30 cans on the shelf, we have 3 days left. If we get shipments every 3 days, we have exactly as much as we need, but if we get shipments every 2 days, we have 10 more than what we need.
Since the abacus has gone out of fashion, and spreadsheet technology from the 80’s has been replaced with more specialized and capable “apps”, we now have automated tools to help with this process. But yes – you can still use a spreadsheet for this! To perform the calculations and complete the report, the data required would be:
1. Data to calculate average daily usage – this would be a beginning inventory, purchases, transfers and ending inventory
2. Delivery frequency
3. Average cost over the period
These are all things F&B management systems would have, but might be more difficult with spreadsheets from a manual entry labor cost standpoint. With this data, the system could produce a report showing the overstock levels of all items in inventory. Taking it a step further, it could rank the overstock by dollar value, so you could easily see where the most excess cash on the shelf is sitting. The drawback is that this data is most relevant right after a physical inventory is taken which may beg the question – how often are you willing to count? Technology to the rescue again with handheld scanners! Inventory times are vastly reduced allowing you to take inventory more frequently. By the way, there is a direct correlation between frequency of inventory and food cost. As inventory frequency increases, food cost decreases.
Once the overstock offenders are identified, steps can be taken to reduce the levels by adding specials to the menu that use the item, by offering them as raw materials to members or staff at sale prices, by finding other creative ways to reduce the levels and certainly by refraining from ordering more until the levels are appropriate.
Another interesting idea is to order less than full cases if you end up with too much excess when you order in case lots. Besides maximizing cash flow, sometimes paying slightly more to split cases results in savings in ways you may not expect. For example, less can spoil if it goes unused. Less will be wasted or overportioned if staff is aware supply is very limited. In all cases, less inventory is better than more inventory. In a perfect world, there would be no inventory. Vendors would just hand you what you need as you need it! This approach is called “just in time inventory” and it is favored by most manufacturers over keeping inventory.
While that may not be possible, I have worked with many operators who have found ways to increase the frequency of deliveries with less volume per delivery. They have found that paying more for delivery and split cases is still less than the cost of waste, spoilage and theft. Everything is fresher as well – which many chefs believe is a critical advantage. Find what works for you. If you master the concept of keeping days left to a minimum, you will find yourself with maximized cash flow and added profitability now.
Back to Top
 Development News
SCI recently released FOOD-TRAK version 6.1. As with other updates, this version introduces a number of improvements. Some are based on client suggestions, others fix obscure bugs and it also includes new features corresponding with our system enhancement blueprint. Among the objectives for the version 6 series are the following:
- Redesigned input forms
- Adding tab separated value (TSV) output options for key reports
- Improving system speed
- Adding new features to mobile devices
With regard to input form design, the sales mix form and the production form have been converted to the new design. TSV options now exist for Profit Center Transfers by G/L Account, Purchase Recap by Profit Center, Cost of Goods and Inventory Extension. Speed improvements have been addressed by adding a new table which stores last cost by profit center. This new table is being populated in version 6.1 and will start being used in version 6.2. We have also made some changes to the FOOD-TRAK Mobile Partner (FMP) including the ability to examine forms that fail to upload.
We anticipate with version 6.2, to be released later this year, a few more data entry forms will be converted to the new design and additional TSV options will be introduced along with a number of other features. We intend to release some new interfaces and additional updates to the FMP software.
New TOAST POS interface introduced!
We are pleased to announce the addition of a TOAST POS interface to our growing list of Point of Sale interfaces. Contact your Account Manager for details.
Back to Top
 FOOD-TRAK University
Training Packages & Schedule
FUNdamentals Package: Our most popular course! Train from virtually anywhere. Now offered in person in Scottsdale or online, the 4-day FUNdamentals training course is designed for convenient distance learning and is led by a live instructor with complete training guides. Working on your own computer workstation and the latest version of FOOD-TRAK, your instructor will take you through a series of lectures explaining the "how to" functionality of each process, followed by practice exercises outlined in the comprehensive training manual. This "real world" foodservice operation approach prepares you to return to your place of business with a clear path and the knowledge to meet your goals, control costs and maximize cash flow using your FOOD-TRAK System.
The Fundamentals course was created to teach clients how to operate and maintain an effective food and beverage database while practicing inventory techniques and methods, forecasting, ordering and procurement approaches that help drive cost savings to your bottom line.
 Crash Course Package: This 7.5 hour online course is provided over 2 half-days. It provides a jump-start on system utilization and is ideal for both new and existing staff that doesn't require as much time as the FUNdamentals class. Topics covered include inventory and purchasing as well as their correlating standard reports. The curriculum is designed to give students the essential knowledge of the basic functions needed use the system effectively for routine tasks. The Crash Course includes one hour of customized Advisory Services training to cover or supplement any additional FOOD-TRAK topics of interest. Mark your calendar for our upcoming training dates!
Comprehensive Recipe Construction Package: Offered online, this 1.5 day course focuses on clients who want to build recipes that can be used for costing, production and menu plans, catering and ideal use calculations. Ideal for culinary staff, this package provides much more depth in recipe construction for costing and ideal use purposes than the 2 hour recipe course offered through FOOD-TRAK University. Learn how to include choices (sides, salad dressing, etc.), substitutions, and even condiments or complimentary bread in recipe construction. Create accurate buffet recipes, production and menu plans, catering menu recipes and even recipes structured for integration to your POS system if desired. If you need accurate recipe costs and margins, are interested in determining your ideal food cost and finding inventory variances by item, automating production scheduling or even running perpetual inventories, this course is for you!
September 19-22, 2023 FUNdamentals
September 26-27, 2023 Crash Course
September 7-8, 2023 Comprehensive Recipe Construction
October 17-20, 2023 FUNdamentals
October 25-26, 2023 Crash Course
October 11-12, 2023 Comprehensive Recipe Construction
November 14-17, 2023 FUNdamentals
November 9-10, 2023 Crash Course
November 7-8, 2023 Comprehensive Recipe Construction
Back to Top
 New Team Member: Welcome Mike!
 We want to welcome Mike Fontes as the newest member of the FOOD-TRAK Account Management Team. Mike’s background included mastering and explaining details about many different software systems to clients and prospects. Combining that skill with his “How can I help?” approach made him a great fit for our team. As an avid outdoorsman Mike likes to spend his off time in the wild areas of Arizona. Family and friendships hold the most value for Mike and those are the kind of connections he treasures and works to foster.
Back to Top
 Trainer's Tip
Form Completion for Accurate Reporting
If you use requisitions and purchase orders, it would be a good idea to check the status of those forms periodically. POs need to be converted to invoices and requisitions need to be converted to transfers. If this step is skipped your Purchasing and Transfer reports would be inaccurate.
A handy tool to view open POs and requisitions is the Alerts function where you can view all open reqs and purchase orders. Some may be open for a good reason. You are looking for open forms that should be converted. You can also go into the Data Entry area of FOOD-TRAK and view open purchase order as well as internal and external requisitions.
Best practice would be to view this information before running reports – and at the very minimum view this information at end of period.
Back to Top
Welcome to the Cloud!
 |
Colorado Convention Center
Denver, CO |
 |
Crowne Plaza Lake Placid
Lake Placid, NY |
| |
Hotel Villa Creole
Port Au Prince, Haiti |
 |
Waialae Country Club
Honolulu, HI |
| 
Trainer's Tip
