Food and Beverage Cost Control Strategies

This assignment delves into the strategies employed by a Food and Beverage (F&B) Manager at Restaurant Attica to effectively control costs. The focus is on both front-of-house and back-of-house operations, highlighting methods like employee training, efficient resource utilization, and regular financial monitoring through reports and statements. The manager emphasizes the importance of constant vigilance and appropriate action to address deviations, ensuring financial stability and profitability.

Running head: FOOD AND BEVERAGE
Food And Beverage
Name of the Student
Name of the University
Author Note

1FOOD AND BEVERAGE
Executive Summary
The report is aimed to look into the aspects of enhancing the skills required for applying the
relevant hospitality concepts in a live business case. Through this report, the aim is to help
understand the importance of financial management and cost control practices applicable within
the hospitality industry. Financial Management is a crucial aspect of any business and more so in
case of restaurant business. This is the core aspect which requires careful planning on the part of
any restaurant to avoid wastage and minimize losses. To accurately allocate finances for
undertaking different activities which would allow enable a restaurant to conduct their business
in a smooth and efficient manner, is a must. Keeping a close watch on how the finances are
managed is the responsibility of Food and Beverage Manager along with the person responsible
for taking care of the accounts. The restaurant Attica located in Ripponlea, Victoria is being
considered.

2FOOD AND BEVERAGE
Table of Contents
1. Introduction..............................................................................................................................3
2. Discussion................................................................................................................................3
2.1 Interview...........................................................................................................................3
i) Which type of hospitality enterprise does the interviewee manage?.......................................3
ii) How does the interviewee maintain the cost control of the....................................................4
a) Front House Operations...........................................................................................................4
b) Back House Operations...........................................................................................................4
iii) Which financial control methods do the manager use in daily business operations ?......5
3) Investigation Report On The Findings Of The Interview About Cost Control And Financial
Management Practices And Evaluation Of Effectiveness...............................................................6
4) Conclusion...................................................................................................................................6
5) References...................................................................................................................................8
6) Appendices................................................................................................................................10

3FOOD AND BEVERAGE
1. Introduction
The main aim of the report is to understand the details regarding the practices followed for
financial management and cost control in Hospitality Industry. For any business to attain
profitability on a regular basis, the important thing is to find out ways through which costs can be
controlled and finances can be managed constantly so that there is no chance of the resources
getting wasted (Bratton and Gold 2012). To look into aspects of finances by making full use of
the resources is essential to get the business in order. Cost Control is required because a business
should always be on the lookout for expansion, through opening up of new branches, adopt
proper marketing strategies to draw attention of the target customers. These can only be achieved
when expenses get controlled by a significant margin through adopting certain measures to carry
out activities within a threshold (Brigham and Ehrhardt 2013).
2. Discussion
2.1 Interview
Now the Food and Beverage Manager of restaurant Attica of Victoria is being
interviewed for the purpose of finding out information regarding cost control and aspect
of financial management. The interview questions and the responses are as follows :
i) Which type of hospitality enterprise does the interviewee manage?
The food and beverage manager of Attica had responded by saying that he is the food and
beverage manager of this multi-cuisine restaurant, where footfalls are very high in this season.
Restaurants are always in demand especially when they are able to maintain the quality with
moderate pricing for all the items (Brigham and Houston 2012). The seating arrangement and the
menu provided also have bog roles to play for determining the number of employees required.

4FOOD AND BEVERAGE
ii) How does the interviewee maintain the cost control of the:
a) Front House Operations-
Front House Operations basically deals with maintenance of the ambience, the dining
room, waiting room and the bar. Managing the front of the house includes customer service,
training of the staff, ways to design the dining room and look after ways to promote the
restaurant in every possible way (DRURY 2013). Cost gets controlled through developing
cordial relationships among the employees, thereby reduce the training period of people looking
to learn the art of customer service and hospitality. The manager said that the cost control is done
by allowing experienced staff to take over the jobs. Reports of how cost is getting incurred on a
regular basis help in keeping a check over the expenses (Epstein and Buhovac 2014). Decoration
part of the rooms are done through the recruitments of professional interior designers.
Maintenance of quality food as per the cost incurred for the preparation of food is of utmost
importance.
b) Back House Operations-
Back House Operations of a restaurant refer to the activities that take place behind the
scene. To allow the business to run smoothly, the back end staffs play vital role to ensure
procurement of raw materials is done in an appropriate manner and they are in line with the
budget ascertained (Healy and Palepu 2012). Then, the number of items are prepared as per
specific instructions so that nothing goes awry. Most importantly, there is a need to keep a
constant watch over the fact that the raw materials procured for the preparation of different items
are used proportionately by keeping in mind the cost factor, so that there is no wastage. Thus
keeping a weekly or daily track of the costs is essential. because money is a precious resource

5FOOD AND BEVERAGE
which no business can afford to let them go in waste. He makes sure to monitor closely on all the
happenings of the back house so that no untoward incident takes place as far as theft of goods is
concerned and also materials get utilized properly (Kerzner 2013).
iii) Which financial control methods do the manager use in daily business
operations ?
Some of the methods used by the manager for controlling finances in daily business
operations are :
a) Maintenance of financial reports – The best way to track the return on investments
acquired, the expenses incurred for procuring of various items, is through the Profit and
Loss Account. This is being taken care of on a daily basis by the manager, by acquiring
information from the accounts manager. This helps to ascertain the profit or losses
incurred over a period of time and take appropriate measures to make sure that losses get
minimized to a great extent (Lam 2014).
b) Review of key financial data – The next important method which the manager
implements, is to keep a track of the financial data on a regular basis and review them
from time to time, so that the deviations can be taken care of.
c) Act upon the trends and findings – The manager, in order to let the functioning of
business happen smoothly, the reporting system gets compared with the monthly
financial statements and internal source documents.

6FOOD AND BEVERAGE
3) Investigation Report On The Findings Of The Interview About Cost Control And
Financial Management Practices And Evaluation Of Effectiveness
The reponses gathered from the food and beverage manager of Attica goes to show that
he has been extremely particular about proper financial dealings and regulation of costs as per
the needs and requirements (Sekaran and Bougie 2016). The fact that, Attica is regarded as one
of the best restaurants of Australia, the food and beverage manager deserves a lot of credit to
ensure that resources are utilized in an optimum manner, menus are updated on a regular basis as
per the changing environmental needs and ultimately give the customers, an experience of a
lifetime, everytime they go over to Attica for dining (Vernimmen et al. 2014).
The fact that he has talked of keeping regular track of financial statements, goes to show
how particular he is about maintaining the image of the organization and make the restaurant
thrive even more across the region of Australia (Xu and Gursoy 2015). He has also talked of
ways to handle finances and keeping a check over them through constant monitoring of the
finances through seeking reports from the accounts section. Another critical aspect is that he has
made sure to coordinate the cost incurred with the maintenance of quality food on a consistent
basis (Zairi 2012). The interview responses from the manager also gave the impression that he is
a hard task master, who is very particular about maintaining the standards and most importantly
take care of the expenses, so that the resources are utilized in the best possible manner.
4) Conclusion
The interview with the food and beverage manager of Restaurant Attica for understanding
the cost control and financial management practices followed gave an insight on the kind of
steps, a manager takes to ensure smooth functioning of a restaurant. This interview report

7FOOD AND BEVERAGE
concludes that maintenance of proper financial reports and statements and taking appropriate
control for the deviations, are the secrets behind the making of a top class restaurant. The
manager stressed on the fact that regular monitoring has always been his sole motto as this
approach would enable the employees to be on their toes and make sure that the resources are
utilized appropriately. When the raw materials are used judiciously and wastage gets avoided as
much as possible, automatically the finances would be managed better and cost would be
controlled.

8FOOD AND BEVERAGE
5) References
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave
Macmillan.
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage
Learning.
Brigham, E.F. and Houston, J.F., 2012. Fundamentals of financial management. Cengage
Learning.
DRURY, C.M., 2013. Management and cost accounting. Springer.
Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing
and measuring corporate social, environmental, and economic impacts. Berrett-Koehler
Publishers.
Healy, P.M. and Palepu, K.G., 2012. Business analysis valuation: Using financial statements.
Cengage Learning.
Kerzner, H., 2013. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Vernimmen, P., Quiry, P., Dallocchio, M., Le Fur, Y. and Salvi, A., 2014. Corporate finance:
theory and practice. John Wiley & Sons.

9FOOD AND BEVERAGE
Xu, X. and Gursoy, D., 2015. A conceptual framework of sustainable hospitality supply chain
management. Journal of Hospitality Marketing & Management, 24(3), pp.229-259.
Zairi, M., 2012. Measuring performance for business results. Springer Science & Business
Media.

10FOOD AND BEVERAGE
6) Appendices
The Interview Script
i) Which type of hospitality enterprise does the food and beverage manager manage?
Ans - He is the food and beverage manager of Restaurant Attica
ii) How does the interviewee maintain the cost control of the
a) Front House Operations
Ans – Train employees to be courteous, take care of designing of the dining place
within the budget ascertained.
b) Back House Operations
Ans – Take care that the raw materials procured are used efficiently so that money
is not wasted
iii) Which Financial Control Methods do the Food and Beverage Manager use in daily
business operations?
Ans – Look after the financial statements on a regular basis, keep track of the
expenses incurred through reports from accounts department.