Increase Profits With Reduced Food Waste
November 14, 2019
For a food production business wastage can be a huge make or break factor for your business.
You must be sure to have enough stock to produce the expected demand that your customers require. And if you run out due to not making enough or having to throw out food because it has expired, the cost to the business can really add up.
So how do you manage to avoid this situation? By having a well-designed food inventory management system. Food inventory management is your system for tracking stock coming into your business, what leaves and what’s leftover. A good food inventory management system is also the most useful tool for gaining insight into the ways you may be losing money.
Reducing wastage is key to growing profits. The following are a few tips to get started on the right foot.
Perform Regular Stocktakes
Having a consistent stocktake system in place is one of the most important parts of a food inventory management system. Create a stocktaking schedule and stick with it. How often is up to you, but keep in mind the more often you take inventory, the better. The important thing is to have a system that takes into account the different types of stock you have and the different ways you use or sell it.
Set A Reorder Point
Knowing the minimum limit you have on stock before you reorder will help you determine exactly when you need to place an order. A “par level” is the minimum amount of any item you can afford to have on hand to satisfy customer demand before ordering more. Once you hit that level, it’s time to place a purchase order. Knowing your reorder point or par level is essential for avoiding stockouts.
Efficient Product and Menu Design
It’s more economical to use one ingredient for multiple products or menu items than using one product for one item. For example, ordering strawberries for only one dish can become expensive if that dish isn’t a top seller. Instead, you could use strawberries to make a sauce, to garnish a dessert, and to flavor a cocktail.
Menu design goes hand in hand with effective food inventory management. The more you can reuse your products the lower your cost of operation.
Use Food Inventory Management Software
Instead of calculating everything by hand or complex excel based spreadsheets, you can invest in a food inventory management software that tracks it for you automatically.
A good software can automate purchase orders when you reach your reorder point, can report on stock expiry dates, can implement batch to reduce spoilage, and can optimise your stock for long-term business growth.
Watch this recording from our founder PK as he introduces the use of Dear Systems for food-based businesses.
If you have any questions about this video and would like to know more about this system for your business book a chat with PK here.
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Staying Organised: Financial Document Management Tips In today's fast-paced world, keeping your financial documents in order can seem like a daunting task. However, proper financial document management is crucial for everything from tax season to personal financial planning. This blog post will provide you with practical tips to help you stay organised and on top of your finances. Why is Financial Document Management Important? Effective financial document management offers several benefits: ● Easier Tax Preparation: Having all your documents readily available makes tax season less stressful and reduces the chances of errors. ● Improved Financial Planning: A clear overview of your financial records allows for better budgeting and future planning. ● Protection Against Fraud: Organised documents can help you quickly identify and report suspicious activity. ● Access to Important Information: Whether it's for a loan application or an insurance claim, quick access to your documents is invaluable. Essential Tips for Financial Document Management 1. Digitise Your Documents One of the most effective ways to manage your financial documents is to go paperless where possible. ● Scan and Save: Use a scanner or a scanning app on your smartphone to convert physical documents into digital files. Save them in a secure, cloud-based storage system like Google Drive or Dropbox. ● E-Statements: Opt for electronic statements from your bank, credit card companies, and utility providers. This reduces paper clutter and often provides immediate access to your statements. 2. Create a Consistent Filing System Whether you prefer physical or digital files, a consistent and logical filing system is key. ● Categories: Create clear categories for your documents, such as: ○ Bank Statements ○ Credit Card Statements ○ Loan Documents ○ Investment Records ○ Tax Documents ○ Insurance Policies ○ Utility Bills ● Sub-Categories: Within each category, consider sub-categories by year or type. ● Naming Convention (Digital): For digital files, use a consistent naming convention (e.g., "Bank_Statement_2025_October"). 3. Implement Regular Review and Purge Cycles Don't let documents pile up. Schedule regular times to review and purge unnecessary papers and files. ● Monthly Review: Dedicate an hour each month to sort through new documents, file them, and shred anything you no longer need. ● Annual Purge: Before the end of the year, do a comprehensive review of all your financial documents. Dispose of anything that has exceeded its retention period. 4. Secure Your Documents Protecting your financial information is paramount. ● Physical Documents: Store important physical documents (e.g., property deeds, birth certificates) in a fireproof safe or safety deposit box. ● Digital Documents: ○ Use strong, unique passwords for your online accounts and cloud storage. ○ Enable two-factor authentication (2FA) wherever possible. ○ Back up your digital files regularly to an external hard drive or another secure cloud service. 5. Know What to Keep and For How Long It's important to understand the retention periods for different types of financial documents. Document Type Tax Returns & Records Bank Statements Credit Card Statements Loan Documents Investment Statements Insurance Policies Utility Bills Property Deeds 6. Utilise Financial Management Software Consider using personal finance software or apps to help track expenses, manage budgets, and even link to your bank accounts for automated categorisation. This can significantly reduce the amount of manual organisation required. Conclusion Organising your financial documents doesn't have to be overwhelming. By implementing these tips – digitising, creating a consistent filing system, regular reviews, securing your information, and understanding retention periods – you can achieve a more streamlined and less stressful approach to financial management. Start today, and give yourself the peace of mind that comes with being financially organised. For more financial tips and advice, subscribe to our newsletter and follow us on social media!
Simple Financial Habits for Business Owners Running a business comes with a myriad of responsibilities, and sometimes, financial management can feel overwhelming. However, by adopting a few simple financial habits, business owners can maintain better control over their finances, ensure long-term stability, and reduce stress. This blog post will outline some essential practices that can make a significant difference. 1. Separate Business and Personal Finances This is perhaps the most fundamental rule for any business owner. Commingling funds can lead to confusion, complicate tax filings, and make it difficult to accurately assess your business's financial health. ● Open Separate Accounts: Set up distinct bank accounts and credit cards for your business. ● Avoid Personal Expenses from Business Accounts: Even small, seemingly insignificant personal purchases from your business account can create headaches. ● Pay Yourself a Salary: Treat yourself as an employee of your business and pay yourself a regular salary. 2. Track All Income and Expenses Accurate record-keeping is crucial for understanding where your money comes from and where it goes. This information is vital for budgeting, forecasting, and tax preparation. ● Use Bookkeeping Software: Invest in reliable accounting software like MYOB, Xero, or QuickBooks. These tools automate many tasks and provide clear financial reports. ● Categorise Transactions: Consistently categorise your income and expenses. This helps you identify spending patterns and areas for improvement. ● Keep Receipts: Digitise or keep physical copies of all business-related receipts. This is essential for auditing and expense verification. 3. Regular Review of Financial Statements Don't just record transactions; understand what they mean. Regularly reviewing your financial statements will provide insights into your business's performance. ● Profit and Loss (P&L) Statement: Review your P&L monthly to see your revenues, costs, and profits. ● Balance Sheet: Check your balance sheet quarterly to understand your assets, liabilities, and equity. ● Cash Flow Statement: Analyse your cash flow regularly to ensure you have enough liquidity to meet your obligations. 4. Create and Stick to a Budget A budget is your financial roadmap. It helps you allocate resources effectively, prevent overspending, and work towards your financial goals. ● Develop a Realistic Budget: Base your budget on historical data and realistic projections. ● Monitor and Adjust: Regularly compare your actual spending to your budget and make adjustments as needed. ● Allocate Funds for Taxes: Set aside a portion of your income for taxes, as estimated taxes can be a significant surprise if not planned for. 5. Build an Emergency Fund Just like personal finances, businesses need an emergency fund to weather unexpected challenges, such as a sudden drop in sales, equipment breakdown, or economic downturns. ● Set a Target: Aim to have at least 3-6 months of operating expenses saved. ● Automate Savings: Set up automatic transfers from your operating account to your savings account. 6. Regularly Reconcile Bank Statements Bank reconciliation ensures that your internal records match your bank statements. This helps catch errors, detect fraud, and verify the accuracy of your books. ● Monthly Reconciliation: Reconcile your bank accounts and credit card statements every month. ● Investigate Discrepancies: Promptly investigate any differences between your records and the bank's records. 7. Seek Professional Advice While these habits provide a strong foundation, there will be times when you need expert guidance. ● Consult a Bookkeeper or Accountant: A professional bookkeeper or accountant can help set up your systems, ensure compliance, and provide strategic financial advice. ● Tax Planning: Work with a tax professional to optimise your tax strategy and ensure you're taking advantage of all eligible deductions. By consistently practicing these simple financial habits, business owners can gain a clearer picture of their financial health, make informed decisions, and pave the way for sustainable growth. Start implementing these habits today, and watch your business thrive. For more detailed guidance and personalised support, contact us at 360 Accounting Bookkeeping Services. We're here to help your business succeed. Contact Us: Phone: Parikshit Kikla (PK) Email: pkikla@360accountingservices.com.au Website: https://www.360accountingservices.com.au/
How Automation Can Transform Your Business Finances
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How Automation Can Transform Your Business Finances
