Utilizing Financial statements in Food and Beverage Operations
Unlike other industries growth and success of food and beverage, industry depends on accounts and finance. According to the food event, it is found that making financial statements is much vital than only relying on the bills and vouchers. Financial statement analysis, costing, sale and purchase management, determination of factors and amendments in certain laws and regulations keeps the industry running flawlessly. In this study, efforts have been made in order to make the food event successful by analysis financial requirements.
2.1 Usefulness of financial statements in food and beverage operations
One of the benefits of financial statement is that it gives the clear idea to the prospective and real time investors regarding the strength and weakness of a particular company. Moreover, it allows the government's agencies to inspect the company (Robinson, et al. 2015).
Creating trial balance:
It is the initial step that not even a company takes before preparing a financial statement but any event whenever is planned as in this project college students have organized food event, as all the initial debit and credit entries are recorded in it to tally both debit and credit side. If it is not tallied then the difference is to be examined and need to be sorted out before making income statement.
Cash flow statement:
It gives the idea to the public and investors how the operations of a company are going on. Based on the event the cash flow statements assist the event planner to a greater extent because it will let the event planner to gather the idea regarding the inflow and outflow of cash and how money is utilized.
Variance analysis is the second most important tool of financial statement in event planning after cash flow statement because it shows the difference between the budgeted cost and actual cost in relation to the business. In budget cost and revenue to be generated in advance from business or event are anticipated At the completion of the event variance analysis is prepared to tally budgeted cost and actual cost with that of income and expenses incurred from the food and beverage event.
Analyzing profit and loss statement:
The income statement is sometimes referred as profit and loss statement, it holds the majority of the financial part and it is the core system of financial statement analysis as it reveals the profitability of the industry for a particular financial year. Only revenues, gains, expenses, and losses are recorded in order to calculate the final net profit before tax. Further tax is deducted to obtain net profit before tax.
2.2 Utilization of cost and pricing strategy
In order to maximize profit an event planner needs to set the right price for a particular piece of item, it is the most crucial and difficult task to fix the price of an item to reasonably sold in the market. Cost here simply means expenditure in making a product and price means the effective rate to be set for that particular item so that it can be materialized by the buyers according to his/her purchasing ability, keeping in mind the achievement ofsurplus over that fixed price,
Factors and steps to be followed to calculate the cost and set price.
It demonstrates the details of the different types of variable and fixed cost in order to run the event or making food items.
Overhead is sometimes called an operating cost, as it is a flowing expenditure of a business. All direct and indirect cost comes under this segment, like labor cost, direct material cost, beverage cost, utensils cost, and other factory and manufacturing cost.
2.3 Examining the purchase process
The purchase process is the core process of any business especially in food and beverage industry including events as well, because the quality of the final product solely depends on the effective purchase planning. In order to justify the effective and efficient purchase process, purchase auditing requires being performed (Le et al. 2016, p.11).
Different sections are given below to conduct such process.
● Selection potential and prospective suppliers
● Proper quotation of a purchase order
● matching the quantity of items with the purchase receipt
● analyzing the carrying cost
● determining the right place for proper storage
2.4 Factors to be determined for the success of the event and for the required amendments
In order to make the event, successful various steps should be taken into an account.
A good leader in an event is in charge to organize the event properly, he/she must guide others to perform their duties. (Hollensen, 2015, p.36).
Presence of a skilled chef:
A skilled and good chef can make the food more delicious and he will also utilize food materials according to the need without wasting time and raw materials.
Nothing is attained without a proper teamwork especially in the case of this kind of events. As food and beverage, the event requires effective understanding and companionship among the team members in order to fructify the result (Knowhownonprofit.org, 2016).
Everybody is attracted to the alluring things because it pleases their mind and motivates them to do good and creative things in their life. This kind of events gives an additional boost apart from the entertainment world to change their lifestyle. Hence, it is advisable to invest the major amount of budget in decorations of the event.
Feedback from customers helps in finding the mistakes in those areas, which we are not aware of it and thus we can take required steps for the betterment and improvements in the organization of the events (De Haan, et al. 2015, p.200).
Recommendations and amendments:
After taking proper measures in accordance with the feedback, recommendations regarding the quality and management should be noted down for the further amendments in their organizing structure. Whereas fresh ideas should be given preferences, in order to add them in proper planning.
An unbiased discussion is done in this project just to understand the use various financial section in performing such food and beverage event. A complete discussion regarding the usefulness of financial statement in food and beverage event, utilization of cost and pricing strategy plus every step regarding purchase process is given along with factors, which determine the improvement, and amendments are highlighted to make the event more successful.