Maximize Your Hotel’s F&B Profit: Expert Tips for Success

Managing a hotel’s food and beverage (F&B) operations can be challenging, requiring meticulous oversight to avoid financial pitfalls. Without rigorous control, F&B can quickly become a significant drain on resources. To ensure profitability, asset managers must focus on four key areas: purchasing, sales, cash, and banqueting.

Purchasing
Efficient purchasing practices are crucial in controlling F&B costs. Here’s how to optimize this area:

Establish Clear Procedures: Develop standard purchasing procedures, including guidelines for petty cash and emergency purchases. Ensure there is a segregation of duties to prevent fraud and errors.
Separate Receiving from Purchasing: Assign different staff to handle purchasing and receiving to maintain checks and balances.
Supplier Management: Regularly review and update your list of suppliers to adapt to changing trends and supply chains. Always obtain three documented bids for new suppliers, and if not possible, document the reasons.
Verify Deliveries: Check all goods against purchase orders upon arrival. This is especially important for perishable items where mistakes are common.
Inventory Checks: Implement policies such as the empty-for-full bottle policy for liquor requisitions. Finance should investigate and resolve material variances in inventories and conduct surprise checks on par stocks for liquor and wine.

Sales
Sales operations in F&B can fluctuate daily, requiring constant attention to detail:

Daily Reporting: Print a daily report of all void invoices from the POS and have the F&B Manager provide reasons for each void. The Director of Finance should verify these reports to prevent losses.
Complimentary Checks: Maintain a daily list of all complimentary checks, with signatures and reasons for the complimentary service. This report should be countersigned by the Director of Finance and the GM.
Revenue Reconciliation: Reconcile revenues between the POS and the PMS regularly, ideally weekly or daily, depending on your software capabilities.
Spot Checks: Conduct surprise checks on departmental par stocks and open table checks, verified by the Director of Finance.
Recipe Management: Keep all recipes updated and calculate the theoretical cost of sales at the end of each month. Investigate significant variances between actual and theoretical costs.
Menu Engineering: Update menu engineering monthly to make informed decisions about pricing and menu items.

Cash Handling
Despite the rise of cashless transactions, cash management remains a critical aspect of F&B operations:

Prompt Deposits: Ensure all cash is deposited promptly and securely, supported by daily reconciliations.
Float Management: Have contracts for each cash float provided to restaurants. In the case of rotating floats, ensure shift handovers are documented with both parties signing to confirm amounts handed over and received.
Surprise Counts: Conduct surprise counts of all cash floats by the Income Auditor in the presence of the cashier and a supervisor. Track and investigate any discrepancies thoroughly.

Banqueting
Banqueting operations require careful management to ensure profitability:

Written Agreements: Ensure all banqueting functions have a written agreement outlining rates, terms, and conditions, signed by both the guest and the hotel representative.
Approval of Price Deviations: Any price deviations must be approved by both the GM and the Director of Finance.
Deposits: Request deposits in line with the hotel’s credit policy to secure business and support cash flow.
Performance Reviews: Hold weekly meetings to review past performance and identify opportunities to increase revenue.

Conclusion
F&B is one of the most dynamic and challenging areas of hotel operations. However, with an asset manager who pays close attention to detail and follows structured procedures, it can become a significant profit center. Regular monitoring and strategic management of purchasing, sales, cash, and banqueting will help ensure the financial health and success of your F&B operations.