Stock variances are caused by either inaccurate recipes which affect your theoretical usage, or inaccurate data entry which affects your actual usage.
This document will help you troubleshoot your stock variance report.
The formula to work out what you actually used is Opening Stock + Purchases + Net Stock Movement - Closing Stock = Actual Units Used
1) Incorrect Counting
If your opening stock or closing stock is incorrect, then your actual units used will be incorrect. Recount your stock. Pack fridges neatly so that counting stock becomes easy. Be careful of having single cans of coke at the back of the fridge where they cannot be seen. Remember that if your closing stock is captured incorrectly, it becomes the opening stock of the next day which will make the next day's stock take also not balance. If you see a negative value for Actual Stock Usage, 9 times out of 10 you have miscounted, and your closing stock is greater than your opening stock (the stock had babies).
2) Incorrect Purchases
Incorrect capturing of GRV's is the single biggest cause of stock errors and incorrect GP's. It is absolutely vital that both the quantity and the price of each stock item is always captured correctly. Be sure to capture your quantity of the unit of measure! There is a big difference between a unit of measure of "Each" compared to "Box of 1,000" such as in the case of straws.
If you are constantly short of a particular stock item, then the problem is usually over-topping. Understand that this term is relative to the recorded recipe for the item. It can be a worthwhile exercise to get each person in the restaurant to create 10 sample portions and weigh the total and divide by 10 to get an average. The results may surprise you. In almost every case, some staff will be overtopping and others won't. The investment in training will usually solve this problem.
4) Short Deliveries
When last did you check that the case of 24 coke cans actually had all 4 packs inside it? 1kg packs of pre-sliced salami should have a certain number of slices in a bag, especially if you always use 8 slices of salami on a pizza. If the slices are suddenly cut thicker, then you could use up to 100% more salami. Are you getting 8 kg's of cheese in your 8kg box or does the box itself weigh 0.5kg leaving you with only 7.5kg cheese?
5) Mistakes with Manufactured Stock
If your brand has provided recipes for manufactured items, then are you making sure to tick the box that says 'use master recipe'? Make sure your batch quantities are correct. The batch quantity can be thought of as the number of times you are making the recipe.
6) Stock Locations
If you use stock locations, then you need to make sure that you have done your stock takes, purchases and stock transfers in the same location that you are running your report for.
7) Stock Transfers
If you transfer stock between two or more stores, then those stores' locations need to have been flagged as 'external locations'. If you use internal stock locations, you must make sure that you are transferring correctly. For example, if you are a multi-brand operation, one brand's can of coke might be a different stock item to the other brand's can of coke. If this is the case, then you cannot transfer cokes from one brand to the other because the cokes are different stock items in each brand.
8) Discarding Stock to Wastage
If you have stock that goes stale or is damaged and you discard it to the rubbish bin, this will show up as a variance on both the stock variance report and the GP report. If you use the facility to transfer stock to wastage then the stock will be considered 'accounted for' and will appear on the variance report in the net stock movement column. This will cause your variance report to only show variances of further unaccounted for stock. This activity has no effect on the GP report. The wasted stock will still appear as a variance in the GP report.
9) Incorrect Overring Procedures
When you cancel an invoice, Aura asks if the stock was wasted or not. You need to make sure that you are doing this correctly. If a pizza was dropped on the floor and the customer canceled the order, were the drinks possibly put back in the fridge? If so, then overring the order and select the option 'stock was not made and wasted'. Then ring up the damaged pizzas again and discount them by 100% with the reason 'wasted'.
For most of our customers who are part of a franchise group, the recipes are already entered for you. These are created by your brand in conjunction with Cosoft. Any mistakes found are always fixed very quickly and a new menu will be released to the group. It is therefore prudent to always activate new menus if Aura prompts you to do so. An incorrect recipe will have no effect on your actual units used or your actual gross profit. It will only affect the theoretical values.
This is the last resort, but it is also a real possibility. I have listed this as an additional 11th option because before accusing anyone of theft, you should always eliminate all other possibilities. Are all invoices being rung up? If not, then you are losing money as well as stock. Some clues of suspicious behavior are:
- Till drawers that are being opened with keys or are often left open after a sale is concluded
- Locked till drawers that have scratch marks slightly to the left of the keyhole that can indicate that they are being forced open
- Small denominations of coins lying around the tills. These can be used for change
Run the activity log report and look for the following suspicious behavior:
- Many abandoned orders
- Many re-printed orders
- Items being deleted off the invoices
- A high number of voided items
- Opening the till draw without doing a sale
It might be worth blocking cashiers from performing the above activities by using the access permissions section of Aura. If you want to still allow managers to perform these activities then you can enable the SMS agent and configure it to secretly SMS you every time someone performs suspicious activities. Our helpdesk can help you to set this up.
Is stock going out the back door?
Is the door locked?
Have random searches been implemented?