Managing Paper costs
Managing Paper cost inside of our
account is very important. Like Food cost, paper is just as relevant to
being successful hitting you budgeted expense targets.
Paper costs can change/move
throughout each week of the month so it is important that you do not purchase
all of your anticipated paper needs for the month on the first delivery of the
month. While this may seem “easy” and to some may seem efficient,
it is important as operators that you manage these expenses expertly.
There are many reasons as to why you
should spread your paper purchases throughout the month:
- Set weekly paper purchase targets
- Keep weekly inventories consistent
- Having too much paper on the shelves takes up valuable product space
- If you are not hitting your food cost target, you can reduce paper purchasing to help insure you will hit your overall weekly target for COG’s
- Paper is a consumed product and should be closely monitored
Some additional suggestions for
effective management of your paper cost
- Paper purchasing targets should not exceed 3.5% of your weekly revenues. This is a different way to look at paper consumption as in the past we have always looked at paper as a cost per email. Following the 3.5% rule follows a true PL mindset mentality.
- Set standards for what paper items you will purchase and completely utilize
- Do not change from your standard. Often when you change it for a specific reason usually for a one time need. Pack sixes of paper do not follow your one tome need and you could be buying something that may not use all of and it will sit on your shelf
- Remember that items sitting on your shelf, even when inventoried cause in increase in expenses related to “cash outlay” related to purchases just to have it sit on your shelf.
- Remember that there is cost to money having items sitting on the shelves
Improving the management of your
paper costs could improve your overall bottom line compared to budget.