Team Up for School Nutrition Success July 20-22, 2015 Financial Management Team Up for School Nutrition Success July 20-22, 2015

Objectives of Presentation Review Financial Management Basics Controlling Labor & Food Costs Revenue Co-creating Your Budget with Your Business Office Sales & Participation Using Your Budget as a Tool Profit & Loss Statement Meals Per Labor Hour Summary References

Basics If you don’t know your numbers, you don’t know your business. “Cost control is one of the basic functions of management”. Costs/revenue gives you your %’s Revenue – Expense = profit or loss Food, supply and labor costs usually represents around 90% of all costs and can be the most controllable. Identify all revenue/expense centers Accurate/timely accounting system Accurate analysis is a must – allow for accruals

Controlling Labor & Food/Supply Costs Review monthly Take corrective action monthly Count inventory monthly Review all food/supply orders before they are sent Cost out your meals Price your ala carte correctly Accurate job descriptions Adjust labor based on sales, participation Meals per Labor Hour as a guide

Reducing/Controlling Labor Costs Training & motivation Increase productivity Use more self service Job descriptions Improve meal schedule Pre-portion food Simplify and standardize Prepare work schedules – match jobs w/ employees Use attrition to your advantage Set attainable goals!

Revenue Identify profit centers with related expenses Review your pricing annually for: Meals Ala Carte Adult Meals Catering Reimbursement Rates Don’t forget Inventory Other revenue source ideas: Partnering with another school district, sports sacks, etc..

Co-Creating Your Budget w Your Business Office Your business office will provide you with a budget that follows state regulations. Once these budget lines have been established, expound on them. Instead of meal revenue, create meal revenue for each school or profit center – do the same with reimbursements, catering, ala carte, etc. Create expense lines for each school or profit center – food, labor, benefits, supply, etc. Summarize each center separately

Business Office Budget

Sales & Participation Daily, weekly, monthly, annually – the frequency of your analysis will result in more detailed, helpful and timely information. Empower your managers and staff with timely information so they results of the efforts are consistently measured and reviewed. Information gained: what meals/ala carte items drive up sales and participation; how similar schools compare with each other; year to year comparisons essential for your forecasting and “economic indicators”.

Use Your Budget as a Tool Review your budget lines monthly – mistakes happen! Learn to recognize trends. Summarize fund balance (+ or-) monthly, don’t forget those accruals! Figure daily budget accruals for revenue & expense: budget amount/# of school days = daily goal Accrue as the year progresses Makes sales/costs forecasting and budget writing much simpler Do not let your budget be rolled!

Budget Accruals as a Tool Food Service thru Dec 89 days Annual Budget School days 166 thru Jan 102 days MMS Food $ 185,385.87 $ 2,082.99 $ 360,000.00 $ 2,168.67 $ 215,392.11 $ 2,111.69 WMS Food $ 40,319.74 $ 453.03 $ 76,000.00 $ 457.83 $ 46,801.43 $ 458.84 OMS Food $ 45,170.47 $ 507.53 $ 85,000.00 $ 512.05 $ 52,062.93 $ 510.42 MHS Food $ 79,954.87 $ 898.37 $ 150,000.00 $ 903.61 $ 91,521.42 $ 897.27 LHS Food $ 116,366.90 $ 1,307.49 $ 218,000.00 $ 1,313.25 $ 134,609.53 $ 1,319.70 HHS Food $ 1,359.95 $ 15.28 $ 2,700.00 $ 16.27 $ - GSRP Food $ 3,892.25 $ 43.73 $ 7,500.00 $ 45.18 Total $ 472,450.05 $ 5,308.43 $ 899,200.00 $ 5,416.87 $ 540,387.42 $ 5,297.92

Profit & Loss Statements Individualize for each profit center Include inventory Review monthly with managers and staff Summarize food/labor costs along with participation I use only revenue and costs that my managers and staff have direct control of Remember to accrue all expense and revenue DO MONTHLY!

Profit & Loss/Costs Tool

Meals Per Labor Hour (MPLH) Meal Equivalents/Labor Hours Meal Equivalents: 1 lunch = 1 ME; $3.00 ala carte = 1 ME; 2 breakfast = 1 ME 301 ME – 14-18 MPLH 700+ - 17-22 MPLH Consider – type of food production, level of service, menu, preparation, equipment, staffing, scheduling, training, motivation, serving period schedule, size of facility, etc. Use information for staffing, union stewards, goals, planning, reduction of labor, etc.

Meals per Labor Hour Meals Per Labor Hour HVS thru Jan 2015   thru Jan 2015 Ala Carte ME Breakfast ME Lunch ME Meal EquTotal Labor Hours MPLH Low High Muir Middle School 154 350 1580 2084 129.25 16.12 19 23 White Lake Middle 121 16 266 403 33.00 12.21 14 Oak Valley Middle 159 263 441 34.25 12.88 Lakeland High School 357 36 528 921 67.00 13.75 Milford High School 256 47 394 697 59.25 11.76 20 District 1047 468 3031 4546 322.75 14.09 to meet minimum by ME needed ME 2461 129.50 19.00 377 462 14.00 59 480 38.00 12.63 39 1273 79.50 16.01 352 948 16.00 251 6460 340.00 1914 Difference -1914

Summary You are in control Knowledge is power Communicate your information Don’t let your business office assume anything Develop your own tools and customize them to your district’s needs Network with others

References www.restaurantowner.com Cost Control for School Food Services, Dot Pannell Martin Financial Management: A Course for School Nutrition Directors, NFSMI, 2005