Accounting Systems

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Michael Hoffman
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2006/06/06 11:18:31 (permalink)

Accounting Systems

From the Columbus (Ohio) Dispatch -- 6/6/06

By Barnet D . Wolf THE COLUMBUS DISPATCH




For some restaurant and bar owners, making a nice profit from their liquor sales is good enough.
But accountant Chuck Deibel says many of these businesses could do better if they had stronger inventory controls.
For the past 12 years, Deibel has been a Columbus franchisee and a five-state master franchiser of Bevinco Corp., a company that helps tavern owners boost and protect their profits.
Now, Deibel has joined with several other senior Bevinco licensees to introduce Food Controllers, which will do for the food business what Bevinco does for bars.
Food Controllers is running tests in Columbus and five other markets to fine-tune its processes and computer software before expanding the concept nationwide.
"Food is a little trickier than alcohol in terms of all of the categories, but we’re working that all out," Deibel said.
He has two partners in the local Food Controllers franchise, but owns the Bevinco franchise and master franchise by himself.
In 1987 in Toronto, Bevinco began selling software that was designed to help bars better account for their costs. However, the focus soon shifted to a service business, using the software to help clients.
Deibel purchased a franchise for Columbus in 1994. His first client was Gibby’s, which remains a customer.
Bevinco has saved Coaches Bar and Grill, 1480 Bethel Rd., nearly $100,000 annually, said owner Jason Painter. "The cost of the service has been worth it for us," he said.
All bars and restaurants suffer some degree of liquor-inventory loss, called shrinkage. The reasons can range from unintentional errors caused by carelessness to less honest mistakes, including failure to charge for drinks and outright theft.
Deibel, or one of the four auditors he employs, visits each client either weekly or biweekly. Every bottle and keg on site is weighed, using a sophisticated scale linked to a computer.
Each drink has a set amount of alcohol in it, and weekly sales are measured against the inventory.
"Most analysis methods that are done really don’t get at shrinkage," he said. "They basically have a (profit) percentage they look at, and if that’s in line, people think that’s fine."
However, the bar operation often could be making even more money if controls were put in place.
Electronic-sales systems can allow restaurants and bars to track food or alcohol orders given to a server, but that doesn’t help when orders are verbal, particularly in busy bars.
Deibel has a restaurant background. His family began the former Deibel’s restaurant in German Village. The restaurant is now Barcelona.
His experience made him aware that employees can be unhappy if outsiders are brought in to examine their activities.
"We know the reaction, that the employees may think they aren’t trusted, so we’re very sensitive about that," he said. "Most of the problems are very easy to fix and aren’t on purpose."
In a sense, Bevinco is no different from an accountant the restaurant or bar hires. "It’s a matter of checks and balances. You’d think any owner would want those in place," Deibel said.

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    pdxyyz
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    RE: Accounting Systems 2006/06/06 12:02:50 (permalink)
    Very interesting article. And it's true, the restaurant business only cares about margin and not waste/ shrinkage/ theft. And there is a greater chance for these issues in food service than in standard retail where inventory control is the life blood of a retail operation.

    I do think the fact that the owner has to buy into someone coming on site to weigh your product is a bit much. There wasn't any mention of cost to the business in the article. How many installations and where they are located currently? If this takes off how well will his 5 employees be able to handle the work load.

    Might be better if he sold the tools so the restaurant owner could do the audit himself.


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    MilwFoodlovers
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    RE: Accounting Systems 2006/06/06 13:17:22 (permalink)
    Around these parts, bars that use measured shots for mixing cocktails do not see repeat business and when repeat customers do come in, they see a beer sale. Increase the price, but mix a good drink.
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    tacchino
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    RE: Accounting Systems 2006/06/14 04:05:06 (permalink)
    I guess I am a little too cynical...these bar set-ups always seem to me to be a sort of dance of the seven veils, and in some cases, both employees and employers are in on it for increased margins.
    I have heard from too many trusted friends who have tended bar who talk about owners pouring generic spirits into high-end label bottles (without many patrons knowing, and quite frankly, if the alcohol is mixed with something else, can most people really detect the difference?), peak hours when bartenders get slammed with verbal drink orders and accountability flies out the window, etc.

    Even trusting in the honesty of the servers, mix-ups can happen, so if I am asked for a "brand" of alcohol in my mixed drink order, I never specify high end brands. Too much margin for error! I don't even like when, in a few (French) restaurants that I dine in here in New York, the waitstaff pours the wine, and then removes the bottle to the bar, where it sits along with other opened bottles that other tables have ordered...to me, this presents too much of a possibility for confusion.
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