1. Financial Management l Budget = financial plan used to forecast needs, allocate resources, and track progress »set goals and objectives »record what is accomplished »evaluate progress »take corrective action quickly l Based on past experience or industry-wide data

2. Kinds of Budgets l Operating: day-to-day guide »for statistics, estimate volume indicators »expense »revenue l Capital = long-term planning »equipment »renovation »construction l Master = overall coordinating budget

3. Types of budgets l fixed l flexible l zero-based l cash

4. Budget Planning 1. Evaluation of past performance and likely changes 2. Preparation: Forecast, draft A.List all sources of income and projected amounts B.List all expenses A.food, labor, overhead, operating expenses C.Add other volume indicators D.Justify requests for new funds 3. Justification: review, revise 4. Implementation: use it! 5. Control: ongoing monitoring

5. Types of Records/Reports l Purchasing and receiving l Storage and inventory l Food production l Operating and maintenance

6. Types of Records/Reports l Service records »use categories as needed –schools –hospitals –commercial enterprises l Cash transactions l Personnel records

7. Important Calculations (N321) l Per portion food costs »food AP; food EP l Selling price »Raw-food cost method »Demand-oriented pricing »Prime-cost pricing »Competitive pricing l Inventory turnover rate

8. Important Calculations l Daily Food Cost Report l Profit and Loss Statement l Break-even point (BEP)