The Issuing Control Point
Issuing is more prevalent in food service operations where more than one outlet uses a food storage area. Such as in a hotel where the coffee shop, banquets and the fine dining restaurant all share a central dining room and a storeroom. As it would be impractical for each of the food and beverage operations to have their own storeroom. A formal issuing process is needed so each area can be properly charged for the food items they use. The is crucial so an accurate food cost can be maintained for each area. As the manager of any of the outlets in an operation you would want an accurate costing of the food you used and not have it mixed with the other outlets that you share a storeroom,
In small operations, those with only one food outlet, formal issuing may be
eliminated entirely. In such cases, all purchases are regarded as direct purchases
and charged to the single food outlet.. Supplies are charged directly to the
department or unit in which they are used. This accounting transfer occurs even
though the products are held in a central storage area. The direct purchase
system eliminates the critical from a cost control standpoint because it is
where the food products change departments. The objective of issuing is to ensure
proper authorization for the transfer of food products to production department(s)
of the operation. The issuing function should be designed to guarantee that
only authorized personnel order and receive products from the facility's storage
areas. A properly designed issuing system also aids in the calculation of the
daily food cost.
Although this system is simple and less time-consuming, it does not provide as much control as the formal system described in the section below.
Issuing and Personnel
In a formal issuing system the person in charge of the storeroom checks to determine that each order has been properly authorized, removes product storage tags, and proceeds to fill the order. The storeroom person then costs out each item ordered and totals the costs. A copy of the completed requisition is sent to the operation's accounting office along with any storage tags removed from the items. This system prevents personnel from helping themselves to whatever they want, whenever they want it.
While putting orders together, the storeroom person should note any items in short supply and direct this information to the operation's buyer so the items can be reordered. Careful inspection of written requests for inventory items and accuracy are important during product issuing. In some establishments, the storeroom person not only assembles the order for a department, but also delivers it to that area. Prearranged issuing times for each department can eliminate confusion and enable the storeroom person to work more efficiently.
Generally, the same kinds of equipment are used during the receiving and issuing of inventory. Products issued on the basis of weight should be weighed before they are released to the production department. Calculators are useful to determine the dollar amount of each department's order and the total of all issues for the day. Handcarts and dollies are used to transport the products from storage facilities to production areas.
Requisitions are the backbone of a successful issuing control point. Written and orders are required from a department before any products are released. The requisition forms may be sequentially numbered and/or color-coded by department for control purposes. Putting requisitions in writing provides documentation and, therefore, greater control. The need for documentation exists whenever a product is transferred from one area of responsibility to another. In this case, the products are transferred from storage to production. Usually a supply of products sufficient for one day or one meal period is issued to each department.
Issues should be properly costed This facilitates the calculation of daily food cost and reminds employees to think of inventory as money. Requisitions must be subtracted from perpetual inventory records to maintain accuracy. Daily issues help establish usage rates and reorder points.
When products are issued, the FIFO [first in - first out] system must be followed. Proper stock rotation minimizes spoilage, contamination, and loss of product quality. The order in which products are assembled for issuing is the reverse of the order in which they are stored. That is, the least perishable items are taken from storage first and the most perishable products last. This minimizes possible contamination and maintains product temperature control. The food production manager (chef or assistant manager) should be notified if perishable products are nearing the end of their shelf life.
Storeroom facilities should not be left unattended if the issuing control system is to remain intact. For maximum security, storeroom facilities should be kept locked with access limited to the storeroom person and the manager. Staff needs to be organized and request the items they need for the day rather than running in and out of the storage areas all day. Restricting unauthorized access to storage areas helps to eliminate losses due to thefts and pilferage.
It is management's responsibility to establish policies and standards for issuing. Although some operations do not find it necessary to use a formalized issuing system, managers who view their inventory as a form of money realize the importance of carefully controlling the issuing function. It is management's job to follow up on the issuing control point to determine that standards are being maintained.
Requisition forms are used to control the issuing function. Inventory items can only be issued to employees with properly authorized requisition forms. At this control point, products are changing departments, and documentation for cost control is critical.
To complete this Topic successfully, please complete the following activities in the order shown below:
ASSIGNMENT 1: Evaluate the issuing process
Go on to Preparation
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