Preparation and control of budgets of food and beverage

Overview

The administrator of a business linked to A and B, so you acquire and apply practical techniques for drawing up a budget in the operation of its establishment, is necessary to get the criteria to properly budget under the specific requirements that practical daily exercise I will asking properly, adjusting to their real needs, in the same manner to cases of special type.

Among the functions of an administrator, it is necessary to plan and then evaluate constantly the progress of the strategy carried out, to execute and monitor activities related to budgets, which can be interpreted in a quantifiable way.Giving support to the business results in each of the requirements in the operation of the business, knowing the main problems, handling basic criteria and techniques of budget, that will help us in a most appropriate way the decision making of a job.

The budget

The budget is the main element to objectively evaluate the result of a settlement of A and B, estimating program and systematise each year over a set period, anticipating the results obtained, representing the goals to achieve the business, taking into account the analysis that allows include elements that make a working environment and quality that makes it easy to do things right the first time.

A manager of a restaurant can budget based on criteria such as:

  • The objectives of the business.
  • The expectations of the vision and mission of the business.
  • The above results.
  • The flexibility of modifying what has been done.
  • The criteria, techniques and experience.
The budget system process

Fig. 1. process of the budget system.

  1. Formulate the (the) budget (s), in accordance with the objectives, criteria, techniques and experience of the administrator.
  2. The budget has been operating for direct functional business decision, implementing tactics and strategic to achieving the goals.
  3. Assesses the actual results, comparing them against budgets, determining the degree of scope achieved.
  4. Constant control.
  5. Annually on the basis of quarterly or half-yearly revisions revisions.

Constant review of budgets and their comparison with actual results, allow you to adjust the operation in search of the goals, correcting the causes of any deviation that may affect the company’s goal of strategic character.

Classification of budgets

There are different classifications of the budgets of which we can mention the following:

(a) by its period or term:

  • In the short term.
  • In the medium term.
  • In the long run.

(b) because of its importance:

  • Financial situation.
  • State results.
  • Changes in the financial situation.
  • Sales.
  • Costs.
  • Shopping.
  • Operating expenses.
  • Cash flow.

Secondary or analytical:

  • Sales service, type of customer, area, etc.
  • Cost per service type.
  • Operating expenses.
  • Purchase of land, premises, furniture and equipment.

(c) by its origin and effects:

  • Operation or economic (which refer to the statements of income).
  • Financial:
  • Cash flow.
  • Schedule of payments.
  • Shopping.
  • Inventories.
  • Capital projects.

(d) by its flexibility:

  • Fixed assignment.
  • Flexible.

(e) by the limit to express:

  • Maximum reach.
  • Minimum cover.
  • Mixed (combines both).

(f) by units that manages:

  • Currency: Numeric and graphic.
Large groups of budgets

Figure 2. Large groups of budgets.

Operating budget: estimated statement of income for the operation of the restaurant in the budgeted period.

Financial budget: is based on general or State balance of financial position.

Note: the administrator must always properly conform to the purpose of the restaurant to make budgets.

The budget as a forecast of the future

Facilities budgeting allows you to predict what will happen in the future, if there will be gain or loss, being able to then determine corrections and the necessary diversification pathways that allow increasing the efficiency of the entity. Many of the closures had been avoided, by means of an appropriate effort to quantify in monetary terms the objectives that it wanted to reach. Starting from this may prepare a plan master budget covering the financial budgets and operations, having the latter, a vitally important since it is covering the income and expenditure of the running of the company performances, being that most frequently is used and must be prepared on the basis the organizational structure of the entity and assigning responsibility for achieving the objectives, adapting to the scenarios to leaders and actual conditions to which the entity will face during the time.

At the restoration the cost of food and its constant variation, depends only on the relationship between the purchase price and the amount of raw materials used in the making of an offer, so for the design of the budget should be considered some factors affecting the control of costs, such as :

  1. Cost of food: food are considered the largest feasible cost control section and the more indeterminate within food operations. According to different fluctuations in prices of edible products, which have increased in recent years, the selling price should be commensurate with the costs of operation depending on the type of service.
  2. Labour costs: are more difficult to control than the cost of the food. There are some factors that influence, such as: the type of service and the extension of the services offered; the hours of service; the kind of menu;the physical plant; the size of the business, the arrangement of units of preparation and service; working conditions; the amount, kind and distribution of automatic equipment; the programme and the rules on selection of the personnel; the training and the overcoming employees schedules; (quantitative and qualitative); the scale of wages; the average in the rotation of employees and the standards that must be kept in production and services.
  3. Other expenses: control does not end with consideration of the costs of food and personnel, one way or another 12 to 18% of the budget of the Department, are used in other fixed costs such as lost: laundry, toiletries, maintenance, items of office, depreciation, etc.

The budget occurs in the main financial statements, in order to anticipate a result in a future period of interest of the administrator, accountant or a business owner of A and B, some common examples of cards budget, applicable in all cases are annexed to the characteristics and type of restaurants, adapting to the needs of the business.

Budget

What is the budget?

It is the quantified expression of the action plan and is a great tool for the coordination and implementation of this plan or production process, economically assessing the amounts obtained in the metric computation for a certain task, installation or service, in advance to its execution.

The budget is the calculation and negotiation anticipated revenues and expenses of an economic activity (personal, family, a business, a company, an office, a Government) for a period, usually on an annual basis, involving an action plan to meet a goal provided, expressed in values and financial terms that must be met in certain time and under certain conditions This concept applies to each responsibility center of the Organization, such as the annual development tool in enterprises or institutions whose plans and programmes are formulated, making a plan operations and resources in the company, to achieve the objectives expressed in monetary terms, simply sit down and plan what you want to do in the future and put it into quantifiable numbers within a certain time period to the displayed objectives in a certain time and is expressed in monetary terms.

Concepts of information that should be considered when the budget

  • Suppliers.
  • Quality and price.
  • Prices of the suppliers.
  • Sales: They are usually prepared for months, geographical areas and products.
  • Costo-produccion: Sometimes this information is included in the production budget. When comparing the cost of production with the sale price, displays utility margins are suitable.
  • Shopping: This is the budget which provides for purchases of raw materials or goods that will be made during a given period. Usually are done in units and costs, involved the applicant than formula requirement of one well’s heritage as a commodity for consumption in the process of their activity within the institution.
  • Income: Tickets for non-recoverable payments, with consideration and without it; except non-mandatory, non-recoverable entries and non-payment, without payment received from national or foreign Governments and international institutions. Income appears net of refunds and other adjustment transactions.
  • Cost: Action of spend (spend the money on something, deteriorate with use). In an economic sense, referred to as spending to the amount that is spent or has been spent. Spending is a useful concept both for families and for companies or for the Government.

Budgets relate to the administrative process

Budget plays a fundamental role within an organization, so through the administrative area may be inspected easier accounting operations or online bookkeeping services, which allows each of its members have a general awareness of the balance sheet, expenses and income that sales and production company.

The budget and accounting have some relationship, it involves an accounting system where is the basis for the preparation of budget reports; therefore to realize the control of results obtained and recorded in the accounts of the company, a general awareness of the economic situation of it, can be achieved through the balance sheet and the statement of profit and loss; information as requested by the Administration to conduct activities and projects effectively.

At the same time, accounting as a tool for internal control, contributes with the collection of data that requires the budget to evaluate the performance of the economic projections in previous periods. Therefore, an adequate accounting system guarantees a reliable and successful; financial budget in such a way that the information provided by the accounts of an organization influences decision-making by executives that compose it, in relation to the goals to achieve.

The budget is conducted according to the objectives that have been set, taking into account the planned means to reach these, can be considered part of the classic administrative process that involves planning Act and control (efficiently) human, technical resources, materials, etc., with which the company has. Budgets are used as media of plans of any organization, providing the bases that will evaluate the performance of different sectors or areas of activity of the company.

Why is that the budgets are based on the concepts contained in financial statements it important?

  1. It allows us to know how much spent, saved, invested, etc, which tends to translate into a better planning for the following year.
  2. In assessing excessive expenditures in some areas and in other benefits we can reflect and design best tactics to correct errors and take hits.
  3. A business lets handlers know what so profitable it is, and provides them with the possibility to compare the actual performance of the company annually.
  4. It allows individual users know how much spent, saved, invested, etc, which tends to translate into a better planning for the following year.
  5. In assessing excessive expenditures in some areas and in other benefits we can reflect and design best tactics to correct errors and take hits.
  6. A business lets handlers know what so profitable it is, and provides them with the possibility to compare the actual performance of the company annually.
  7. These documents should be stored to be able to compare each other and know, with actual numbers, what year was better. We must remember that the empirical perception is often imprecise and leads to errors.
  8. Creditors and potential providers of financing it may help to know how are the finances of the user or company, to determine the risk of the operation and the ability to pay.
  9. If a financial status is good, it can help to be given a good credit, mortgage or financing.
  10. The financial statements are important because they are serious documents and with official validity (if made with someone with proper authorization) that allow to have a very organized idea about finances.

Operating budget

One of the primary with a budget purposes is that you can determine revenues that you intend to get in your business, as well as the costs that will be produce.So it is very important that this information is well detailed. Estimates are that directly in process has to do with the neurological part of the company, from the same production, up to the expenses that resist offering the product or service, are components of this item:

  • Budget sales (estimated produced and in process).
  • Budget production (includes direct and indirect costs).
  • Budget requirement of materials (raw materials, supplies, auto parts etc.).
  • Budget labor (brute, qualified and specialized force).
  • Budget expenditure of manufacturing.
  • Budget cost of production (without the profit margin).
  • Budget expenditure for sale (training, vendors, advertising).
  • Budget expenditure management (all types of labor and work distribution requirement).

Financial budget

Is he dealing with the financial structure of the company, i.e. the composition and relationship that must exist between assets, liabilities and capital. Its objective is summarized in two factors, liquidity and profitability.

Composition of financial structure:

  • Cash in cash and banks and short-term investments.
  • Accounts receivable from customers.
  • Permanent investments.
  • Short and long term debt.
  • Accounts payable to suppliers.
  • Expenses and taxes payable.
  • Social capital and retained earnings.

Planning is the key to a good administration. This is true for individuals, family business, large companies, government agencies and nonprofit organizations. For example, the most successful students who get good grades, are financed his education and obtained their titles as they plan their time, work and recreation.These students are budgeting their scarce resources to make the best use of time, money and energy. Also, the owners and managers of small and large companies, survive and grow even during economically difficult times, because they plan and estimate the costs of their operations and the expansion of its facilities.

A dynamics of research in a class, where requires the skills of each of the members of the team, demand a plan part of each of its participants, bearing in mind the deliver time and forms established by the teacher, as I condiciono with one of my groups of the Universidad Tecnológica de Cancun (GA37), obtaining a short-term contributions who collaborated with this overview of an indirect way , rain of ideas that a group of pupils, involved to the cuisine gives you more projection and support research on costs and budgets in the area of food and beverage.

The budget requires a commitment from the senior management of the participation of all levels, an administrative process that organize, provide, apply, and control resources, an organizational structure that identifies roles and responsibilities, a process of control and coordination of functions on a permanent basis, for this must have clear concepts of budgets and their relationship with the financial statements.

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