Increase Profits With Reduced Food Waste

stocktake, reduce food wastage

Increase Profits With Reduced Food Waste

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.


Be Prepared EOFY Is Almost Here


The end of financial year is June 30th, less than two months away. In the dynamic small business and hospitality space your end of year position can change right up until the last minute.

That doesn’t mean that there is no way to prepare in the coming weeks. With planning you know where you stand, what you owe and more importantly how to invest in new services or equipment.

Profit And Loss

Prepare a summary of income and expenses in a profit and loss statement. The profit and loss (P&L) statement is a financial statement that summarises revenue, costs and expenses incurred during a fiscal quarter or year. These records provide information about a company’s ability or inability to generate profit by increasing revenue, reducing costs or both. It is important to know how much you are spending and generating in terms of income prior to the end of the year.

Stocktake

If your business buys or sells stock, a stocktake will establish the value of your stock at the end of the financial year. You will need to do one if:

  • your business turnover is $10 million or more
  • your business turnover is less than $10 million and the difference between your stock level at the beginning and end of year is more than $5,000 (you can make a reasonable estimate to determine this).

If a stocktake is required, do it as close to June 30th as you can and keep the following records:

  • a list describing each article of stock on hand and its value
  • who did the stocktake
  • how and when it was done
  • who valued the stock and the basis of the valuation.

Based on this information you may decide to do a stocktake sale to boost sales or to create an offer to boost sales the final week of trading.

Record Of Debtors And Creditors

To ensure your records are correct at the end of financial year is it important to reconcile your accounts. Be sure that your debtor accounts are reconciled to your general ledger account. Ideally the total of your outstanding invoices equals the balance of your trade debtors account.

Like your debtors, your creditors also need to be reviewed and balanced to your general ledger account. Confirm that purchase orders are fulfilled. If the goods have been supplied, the order should be closed or turned into a bill for payment before the end of year.

Expense Claims

Now is the time to find your records for purchases of new assets. Remember there is a $30,000 to $20,000, depending on the date of purchase, instant write off for small businesses.  Also bear in mind expenditure on improvements to a business location can also be claimed so be sure to find those receipts as well.

Compliance For Tax and Reporting Requirements

Be sure to complete your personal income tax returns. Ensure that all lodgings for

PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting is up to date. Of course, there are also superannuation considerations. Be sure that all of the year’s tax obligations are lodged and complete. This will make the end of year reporting much easier on you and your accountant.

2019 Here We Come!

It can be a bit stressful for business owners at this time of year. However, with online systems and cloud-based accounting it does make things easier. And if you are feeling really overwhelmed please get in touch with us for a quick end of financial year health check. There is no need to go it alone!