Calculating yield
QMy stock report shows a yield but I don't really understand what it is. Can you explain how it is calculated?
AThe yield percentage displayed on your stock report is really another way of looking at the result.
The yield percentage is arrived at by expressing the cash that has been recorded through your tills ie, your declared revenue, including VAT as a percentage of what your stocktaker has calculated your stock usage at selling price value to be, before any allowances have been applied.
The theory is that if you sell everything at full selling price, and do not waste anything, or give anything away, you should achieve 100% yield. A yield higher than 100% is possible if you sell high-volume draught beer for example on freeflow into 20fl oz glasses (because the glass is not quite full and there are average savings of 3%), although obviously beer is wasted when, for example, beer lines are cleaned, staff pour drinks incorrectly, and you run promotional offers.
There can be numerous occasions in a pub where stock is used and no money enters the till. The approximate difference between what your yield percentage actually is and the full 100% should be reflected in any allowances and adjustments. So, if the yield percentage says 98.3% and the allowances represent 1.5% then this would be normal in my opinion. If the yield is only 88.3% and the allowances represent 1.5%, then the alarm bells should start ringing and this usually means one of two things; either the revenue figure is incorrect or there is an error that affects the sales at selling price on the stock report. Always look at the yield percentage and make sure that it stacks up.
Food for thought
QI asked my stocktaker to allow for wastage on my food stocktake, but he refused. Why should this be?
AYour stocktaker was quite right to refuse. The reason is that unlike a liquor stocktake, which is usually calculated at both cost and retail value, a food stocktake is generally only calculated at cost price.
The reason there are allowances on a liquor stock report is because the customer is charged at retail price (which includes the VAT element) for each individual measure of wine, spirit, beer etc. that is purchased, so that each product has a full retail price attached to it.
If a bottle of whisky, for example, is broken, then it is reasonable to allow the retail value of it against the stock result, as no money has gone into the till and you know what has happened to it. The cost of it is still charged on the result, as the supplier will not compensate you because you've dropped it.
So it is with food stocks, where each individual product does not have a retail value attached to it on the stock report. If it is wasted then it must be charged against the result, as the supplier will not compensate you for stock wasted.
Take true stock
QI will shortly be entering the trade and taking on a pub tenancy. What should I look out for when buying the stock-in-trade?
AIt's good that you are thinking of this well in advance so many people just do not.
Common sense will often see you through, but make sure whoever represents you in terms of stocktaking will do the following:
l check the dates on all stock
l refuse any stock that is out of date
l check spirit strengths for abv
l look at the condition of the stock
l look at glassware for suitability
l value stock at invoice prices if possible
produce a costed list of all the products you have purchased on the day.
It is also worth inspecting the stock on the day in the company of the stocktaker so that any problem areas can be anticipated, discussed and resolved without fuss. It is also worthwhile thinking about the listing and valuation of trade furniture, fittings and effects, as this will represent your biggest outlay.
Make sure you have a professional valuer in your corner looking after and protecting your interests.
