This week’s financial footnote is a reminder to update all Floor Stock, Nourishment and Supplement pricing in eMorrison
Managing your food cost is an integral piece of financial success as well as accuracy at you’re account. Keeping pricing updated in your system is a simple way to insure that your billable items and tracked items are registering accurately. Keeping prices updated quarterly is a standard operating practice and should be completed by each account.
In many accounts, we bill back the client for these tracked items or at least keep track of expenses by pantry area. It is essential to insure that you are capturing all of the credits possible to insure that you are managing a healthy, accurate and stable food cost each month. It’s a good rule to remember to update these tracked items prices at the end of each quarter. We just completed period 9 which would be the end of the third quarter, so now would be great time to complete this process.
Recognizing that managing your food cost has many moving parts, accuracy in price paid for each item is crucial. As with inventory pricing, it is equally as important to successful account management and accountability. To see the impact that “not updating” your tracked item pricing see the below.
SAMPLE COST IMPACT SCENARIO
Over the past 90 days the cost of small yogurts that are in your tracked items as a floor stock for a specific pantry have been stable at $.48 per unit. It is the end of the quarter and you are updating prices and find that your small yogurts are now landing into your account at $.59 per unit, a difference of $.11 per unit. If you deliver 550 small yogurts each month during the billing cycle, this cost increase would impact your food cost by $60.50 on just that one line item. This is significant as it just shows the impact of not updating pricing for one tracked item.
Additionally, keeping your tracked item prices updated is great information to share during your weekly RDO calls to help to inform other accounts of a specific variance.
Following the process of updating tracked items quarterly will help to insure solid food cost performance.
Kevin J Mclaughlin | Regional Director of Operations