FOOD &

BEVERAGE
COST
CONTROL
WEEK 8
PURCHASING AND
RECEIVING CONTROL
PART 2
 Purchase Order
 Purchase Orders are a formal agreement that a product is going to be bought
at a specific price This is a promise to purchase goods as opposed to an
invoice, which is created by the purveyor for goods already delivered.
 Advantages of a Written Purchase Order
 1. Written verification of quoted price
 2. Written verification of quantity ordered
 3. Written verification of the receipt of all goods ordered
 4. Written and special instructions to the receiving clerk, as needed
 5. Written verification of conformance to product specification
 6. Written authorization to prepare vendor invoice for payment
 Computer Applications
 One of the best applications of a computer system is purchasing.
 A good program will allow the manager to track the rise and fall of
food costs automatically, and it should also generate customized
reports on such items as purchases and price variances.
 Establishing Price Standards
 Means of Obtaining Price Quotations
Today purchasing stewards have several means of obtaining price
quotations: •
1. Telephone
2. Fax
3. Quotation sheets obtained by mail
4. Fax modem
5. Information supplied by salespersons who call on customers
6. Direct computer links with purveyors via the Internet or dedicated
telephone
 Perishables
 Prices for perishables generally change daily,
 It is necessary for the steward to contact several different
suppliers by one or more of the aforementioned means to
determine current prices each time an order is to be placed.
 If copies of specifications have previously been sent to suppliers,
the steward has reasonable assurance that each is quoting on
products of comparable quality.
 Nonperishables
 Sometimes stewards obtain nonperishables from the same
supplier that provides perishable products.
 This is particularly true in smaller establishments that do not
purchase large quantities of any one item.
 Centralized Purchasing
 Centralized purchasing systems, widely used by chain operations
and occasionally established by small groups of independent
operators with similar needs.
 Under a centralized purchasing system, the requirements of
individual units are relayed to a central office, which determines
total requirements of all units and then purchases that total,
either for delivery to the individual units by the dealer or for
delivery to a central warehouse.
 Advantages of Centralized
Purchasing
 1. Foods and beverages can be purchased at lower prices because of
volume.
 2. Desired quality can be obtained more readily because the purchasing
agent has a greater choice of markets.
 3. Foods can be obtained that meet the purchaser ’ s exact specifications.
 4. Larger inventories can be maintained, ensuring reliable supply to
individual units.
 5. The possibilities for dishonest purchasing in individual units are greatly
reduced.
 Disadvantages of Centralized
Purchasing
 1. Each unit must accept the standard item in stock and has little
freedom to purchase for its own particular needs.
 2. Individual units may not be able to take advantage of local
specials at reduced prices.
 3. Menus are normally standardized, thus limiting the individual
unit manager ’ s freedom to change a menu.
 STANDING ORDERS
 One arrangement calls for the delivery of a specific quantity of a
given item each day (e.g., 12 loaves of bread).
 The number remains constant unless specifically changed by the
steward.
 The second arrangement calls for the replenishing of stock each
day up to a certain predetermined number.
 RECEIVING CONTROLS
 In our discussion, we use the job title receiving clerk to identify
the individual to whom management assigns full responsibility for
receiving food deliveries and carrying out the control procedures
set up by the food controller.
 In larger operations, particularly those with complete food control
systems, one person may be so designated.
 Establishing Standards for
Receiving
 1. The quantity delivered should be the same as the quantity
listed on the Steward ’ s Market Quotation List, and this should be
identical to the quantity listed on the invoice, or bill, that
accompanies the delivery.
 2. The quality of the item delivered should conform to the
establishment ’ s standard purchase specification for that item.
 3. The prices on the invoice should be the same as those circled
on the Steward ’ s Market Quotation List.
 The Invoice
 An invoice is usually presented to the receiving clerk in duplicate
by the person making the delivery, who will expect the receiving
clerk to sign and return the second copy.
 This serves as an acknowledgment to the purveyor that the
establishment has received the products listed on the invoice.
Invoice No. xxx21
Market Price Meat Co.
300 Market St., Makati City
To Bistro Manila Date: 5
May 2021
QTY Unit Description Unit Amount
Price
3 kilos Strip loin P 350.00 P
1,050.00
5 kilos Spareribs P 320.00 P
1,600.00

Total P
2,650.00
ESTABLISHING STANDARD PROCEDURES
FOR RECEIVING
 1. Verify that the quantity, quality, and price for each item delivered conform
exactly to the order placed.
 2. Acknowledge that quantity, quality, and price have been verified by
stamping the invoice with the rubber invoice stamp provided for that
purpose.
 3. List all invoices for foods delivered on a given day on the Receiving Clerk ’
s Daily Report for that day and complete the report as required, or enter
appropriate information directly into a computer terminal.
 4. Forward completed paperwork to proper personnel.
 5. Move food to appropriate storage areas.
 Verifying Quantity, Quality, and
Price
 To carry out the verification procedure suggested here, the
receiving clerk must have certain supplies and equipment
available, including the following: • A permanent copy of the
standard purchase specifications
 • Appropriate equipment for determining weight, including such
items as a hanging scale (for whole fish and large meat items) and
a platform scale (for boxed items)
 • Certain paper forms, tags, rubber stamps, and related office
supplies
 Quantity Verification
 Quantity verification entails weighing, counting, or otherwise
enumerating the quantity of a particular food delivered by the
vendor and then checking to see that the same quantity appears
on both the invoice and the order (the Steward ’ s Market
Quotation List).
 Quality Verification
 Quality verification requires knowledgeable inspection of delivered
foods and careful comparison of perceived quality with the quality
established in the standard purchase specifications.
 For example, the individual receiving strip loins of beef should be
able to determine that the beef conforms to the restaurant ’ s
standard purchase specifications.
 Stamping the Invoice
 It is generally good practice to provide the receiving clerk with an invoice stamp
— a rubber stamp to be used on all invoices. It provides for the following:
 • Verification of the date on which the food was received
 • The signature of the clerk receiving the food, who vouches for the accuracy of
quantities, qualities, and prices
 • The steward ’ s signature, indicating that the steward knows the food has been
delivered
 • The food controller ’ s verification of the arithmetical accuracy of the bill
 • Signatory approval of the bill for payment by an authorized individual before a
check is drawn
 Receiving Clerk ’ s Daily Report
 Directs are those foods that, because of their extremely perishable
nature, are purchased on a more or less daily basis for immediate use.
 Stores , by contrast, are those foods that, although ultimately perishable,
will not diminish significantly in quality if they are not used immediately.
 They can be held in storage and carried in inventory for a day or so or, in
some instances, for considerable periods of time.
 Meats, for example, if stored under proper conditions, can be maintained
for reasonable periods of time.
 So, too, can grocery items that are purchased in cans, bottles, and boxes.
Forwarding Completed Paperwork
 Moving All Delivered Food
 Completing the Control Process
 In previous lessons , we outlined the complete control process, which has
four steps:
 1. Establishing standards and standard procedures for operation
 2. Training all individuals to follow established standards and standard
procedures 3. Monitoring performance and comparing actual
performance with established standards
 4. Taking appropriate action to correct deviations from standards