A few weeks ago, I shared four money-saving tips for school nutrition programs to cut operational costs. Today, I’d like to share a few more in the second installment of “Cut Costs in Your SNP with These Money-Saving Tips”.
Trim the menu.
Sometimes menu items just aren’t selling – and that’s okay. Trial and error, right? It might be a good idea to work a taste test into the budget to have students sample items you’d like to add to the menu. Taste-tested foods that are well-received by your students will indicate which foods won’t be wasted when they’re added to the menu; taste-tested foods that aren’t well-received can be avoided altogether to save money.
But, let’s say you don’t have time for a taste test, or that you’d like to address items currently on your menu that just aren’t selling. By closely studying your production records, you can determine which menu items historically undersell and then make a plan for appropriate production. When searching for a production solution that works for your program, it’s important to pick one that will seamlessly integrate with any other school nutrition software you currently use to keep reports and information accurate and measurable across the board.
As mentioned in the previous blog in this cost-cutting series, child nutrition programs must operate like restaurants – and restaurants have great advice for choosing the right items to effectively trim menus. The Balance advises against food fads on the menu (especially without a prior taste test), reminding menu planners to stick to “little black dress” menu items. Classic LBD menu items – like a burger and fries – can be dressed up with an added ingredient or two, or even presented in a new way. The Balance also suggests careful review of menu items, to select those that will allow you to “balance high and low food costs for a reasonable profit margin.”
Finally, The Balance recommends keeping menu dishes easy to prepare, and keeping them versatile. For example, if you offer a spinach and artichoke dip, it’s a best practice to offer other items in that menu cycle that feature those ingredients. Repurpose those ingredients and get creative!
Count and cost inventory levels at the end of each accounting period.
Some child nutrition programs, especially those who operate a large central warehouse, only conduct physical inventory counts once a year. Although physical inventory counts can be tedious and time consuming, limiting your physical inventory counts to only once per year can lead to inaccurate inventory reporting. In order to keep reports accurate – and help your program save money! – a monthly, or at least quarterly, inventory count should take place.
To save time with your inventory counts,
Technology has certainly come a long way in recent years to make life easier in all aspects – the same is true for child nutrition. There are many software solutions for inventory management that make the physical inventory count process a little less daunting. And, to make the process even easier, consider utilizing a mobile inventory scanner to eliminate paper count sheets and help you take back your time. After all, time is money!
It’s also a best practice to reference your inventory levels when planning your menus. Maybe one item is not selling – but there is an influx of another item sitting on your shelves. To understand how inventory can affect your program’s budget, you should change the way you and your staff think about the items on your shelves. You may see boxes upon boxes of unopened food, but those boxes of food essentially represent stacks of cash. As mentioned above – get creative with your menu planning! Find ways to incorporate those overstocked items from your shelves into your menus. The less inventory you have sitting on your shelves, the more money you have available to try out new ideas to extend your resources. Think about all of the programs or activities you’ve wanted to give a try but couldn’t due to a lack of resources!
Always compare the contract price of an item with the receipt price.
When you receive an invoice for items you’ve recently purchased and added to your perpetual inventory, it’s very important to double-check that the contract price (the price in the system) matches the receipt price (or, the price on the invoice). Sometimes these numbers are different; for example: the contract price of that item has changed since the item was purchased.
The practice of double-checking that the contract price matches the receipt price is also known as invoice reconciliation. This practice holds vendors accountable for advertising the correct contract pricing for the items they sell. If a discrepancy is found between the contract price and the receipt price, you should contact the vendor immediately to request a credit and updated pricing for the item in question. When invoice reconciliation is effectively utilized, this practice can save your program lots of money. For example: If a district purchases 5,000 cases that are each invoiced at $24.50 but the contract price is $24.00 per case – that’s $2500 in lost money.
There are plenty of other ways (that don’t involve food) to save your program money!
Sometimes, child nutrition programs look at their commodities, or foods designated through the Planned Assistance Level (PAL), at a $0 value. Looking at commodities in this way can definitely throw off your food costs and affect your financial management – but that’s a blog for another day.
Aside from cutting costs in ways that involve food, you can also save money by effectively managing your labor. By conducting a thorough labor analysis, you can identify the amount of service staff needed per site – by factoring in how much food you are preparing, how many students can be served per labor hour, and more. When conducting a labor analysis, it is important to never look at assigning labor hours by name – rather, you should look at it by business, position and hours.
If you look at your labor hour assignments as giving hours to your employees rather than looking at who are you are assigning the hours to, it eliminates the emotion of the task from the beginning. This helps to avoid any favoritism in assigning work hours. Many child nutrition professionals in supervisory roles shy away from this practice because it’s too personal. Let’s face it: nobody wants to cut someone else’s hours, or be the person to move an employee to another location. But, through a comprehensive labor analysis, you can more easily determine if you’re really getting the best bang for your buck when it comes to labor hours. Are you paying an employee for 40 hours of work even though they’re only really producing 20? Is one site over-staffed, while another is under-staffed? Labor analysis takes out the guess work, and can help your program save money when it comes to distributing and managing labor hours.
Share with us!
Have you utilized any of the money-saving strategies mentioned in this blog? What strategies worked or didn’t work for your program? Do you have other cost-cutting tips you’d like to share? Please leave your thoughts in the comments box below, and be sure to check back soon for the third installment of this money-saving series.