Stockifi Guide: Cost% & Variance Report

Summary

The video script provides a detailed guide on utilizing a cost and variance report to understand and manage business expenses effectively. It emphasizes the importance of verifying stock counts and defining POS buttons to ensure report accuracy. The script explains how to calculate cost percentages and variances for various categories and individual items, including the use of bundling to simplify the presentation of multiple products. This comprehensive approach helps businesses identify cost inefficiencies and improve inventory management.

Takeaways

• 📊 Review the cost and variance report to understand real costs and variances on each item category.
• 🔍 High cost percentages in a specific category may indicate significant variances that need further investigation.
• 💡 To improve report quality, follow the steps provided in the email, including verifying stock counts and defining POS buttons.
• 📈 The cost percentage is calculated based on inventory use and sales, not considering recipes added in stocky.
• 🛒 The 'purchases' column shows the cost of goods bought, not the selling price, and includes wasted inventory and inventory use.
• 🔢 The formula for inventory use is the previous count plus purchases minus waste and minus the current stock count.
• 🍺 Use the discount given and total sales of a category to calculate the cost percentage per category.
• 📋 The variance summary considers recipes and can be affected if recipes are not defined or set up incorrectly in stocky.
• 📝 The report provides a theoretical inventory value, current inventory value, and the variance between the two, broken down by category.
• 🥩 Detailed variance reports for individual items, like ground beef, show the previous stock, purchases, waste, sales, and the resulting variance.
• 📦 Bundles in the report allow for the presentation of two separate products as one item, simplifying variance analysis for products of different sizes or suppliers but the same category.

Q & A

What is the purpose of the cost and variance report?

The cost and variance report is used to analyze the real costs in every category and identify variances on every single item. It helps to understand why costs might be high in specific categories and provides insights into inventory management and sales performance.

How can the quality of the cost and variance report be improved?

The quality of the report can be improved by following three steps: verifying the stock count, especially the top items that could be wrongly counted; defining POS buttons for sales that are not associated with any recipe in stock; and ensuring the accuracy of the data input into the system.

What does the 'verify count' action item refer to in the context of stock counting?

The 'verify count' action item refers to the process of checking the items listed by the system as potentially wrongly counted during a stock count. Users should confirm whether these items are correctly counted and mark them as verified to maintain the accuracy of the stock count report.

What is the significance of defining POS buttons in the cost and variance report?

Defining POS buttons is crucial as it helps in accurately categorizing sales from the POS system that are not associated with any recipe in stock. This ensures that the custom variance report reflects the correct data, thus improving its quality.

How is the cost percentage calculated in the cost and variance report?

The cost percentage is calculated by considering the inventory used in a period and the sales made in that period. It involves taking the previous count's worth, adding the purchases, subtracting the wasted and counted stock, and then relating this to the sales and discounts given on the category throughout the period.

What does the 'purchases' column in the report represent?

The 'purchases' column represents the total amount spent on a particular item or category during the reporting period, as recorded on the invoices.

What is the role of 'inventory use' in determining the cost percentage?

Inventory use is the calculated amount of a product that has been used or sold during the reporting period. It is essential in determining the cost percentage as it helps to understand how much of the purchased inventory has contributed to sales.

How does the variance summary in the report consider recipes?

The variance summary takes into account the recipes defined in the stock management system. If a recipe is not defined or is set up incorrectly, it can affect the variance calculation, showing the difference between the theoretical inventory on hand and the actual counted inventory.

What is the difference between 'Theory inventory on hand value' and 'Current inventory on hand value'?

The 'Theory inventory on hand value' is the calculated value of what should be in stock based on purchases and sales, while the 'Current inventory on hand value' is the actual value counted during the stock count. The variance between these two values indicates any discrepancies.

What is the purpose of the 'bundle' feature in the cost and variance report?

The 'bundle' feature allows for the presentation of two separate products as one item in the report, especially when they are similar and used interchangeably in recipes or sales. This helps in simplifying the report and providing a clearer overview of the total variance for a combined item.

How can users track individual items within a bundle in the report?

Users can track individual items within a bundle by going to the item row in the report. This will display all the variants of that specific item, allowing for detailed tracking despite the bundled presentation at a higher level.

Outlines

00:00

📊 Cost and Variance Analysis

The script explains the importance of using a cost and variance report to understand real costs and variances in inventory categories. It emphasizes the significance of high cost percentages indicating potential issues. The report is sent via email and includes an overview of cost percentages and total variance percentages. To improve report quality, three steps are suggested: verifying the stock count, especially the top items that may have been miscounted, and defining POS buttons for sales not linked to any recipe in the inventory system. The report provides a cost percentage summary by category, detailing the process of calculating inventory use and cost percentage based on purchases, waste, and sales data. It also discusses the impact of undefined or incorrect recipes on variance summary accuracy.

05:03

📝 Detailed Variance Report Breakdown

This paragraph delves into the specifics of the variance report, using the example of ground beef to illustrate how the report calculates the expected inventory based on previous stock, purchases, waste, and sales. It explains the concept of variance, which is the difference between the expected and actual inventory counts. The report also introduces the 'bundle' feature, which allows for the aggregation of different products into a single item for reporting purposes, especially useful when products of different sizes or from different suppliers are used interchangeably in recipes. This feature helps in presenting a clearer picture of total variance per product or product group, making it easier to identify discrepancies in inventory management.

Keywords

💡Cost Percentage

Cost percentage refers to the proportion of total sales that is represented by the cost of goods sold. In the script, it is used to analyze the expenses in different categories (e.g., beer, food) by comparing the purchase costs to the sales revenue. This metric helps businesses understand how much they are spending relative to their sales, which can indicate profitability and efficiency in managing inventory.

💡Variance

Variance is the difference between what was expected or budgeted and what actually occurred. In the context of the script, variance is used to measure discrepancies in inventory levels—what should be in stock versus what is actually counted. This helps identify potential issues such as wastage, theft, or errors in counting or recording sales.

💡Inventory Used

Inventory used represents the amount of inventory that has been utilized during a specific period. The script describes how to calculate this by considering the opening stock, purchases, waste, and closing stock. Understanding inventory used is crucial for calculating cost percentages and analyzing how efficiently resources are being consumed.

💡POS Buttons

POS (Point of Sale) buttons refer to the specific keys or commands in a sales system that are used to record transactions. In the script, defining POS buttons correctly is emphasized as it ensures that sales are accurately recorded against the correct inventory items, thus improving the accuracy of cost and variance reports.

💡Stock Count

Stock count is the process of physically counting the inventory to verify the quantities on hand. The script mentions stock count as a crucial step for maintaining the quality of reports, ensuring that the recorded inventory levels match the actual stock, which is essential for accurate cost and variance analysis.

💡Purchases

Purchases refer to the total amount of goods bought for resale during a period. The script uses purchases to calculate the cost percentage for each category. Accurate recording of purchases is vital for understanding the true cost associated with each category and for analyzing the inventory flow.

💡Sales

Sales denote the total revenue generated from selling goods. In the script, sales figures are used alongside inventory usage and purchases to calculate the cost percentage for different categories. Analyzing sales in relation to inventory helps in assessing the profitability and efficiency of operations.

💡Waste

Waste is the amount of inventory that is lost or discarded and not sold. The script highlights waste as a factor in calculating inventory used and cost percentage. Managing and minimizing waste is critical for maintaining profitability and ensuring that resources are utilized effectively.

💡Bundle

A bundle in the context of the script refers to grouping multiple similar products as a single unit for reporting purposes. This helps in presenting a clearer picture of inventory and sales, especially when products have different packaging but serve the same purpose, such as different sizes of the same drink. Bundling simplifies the analysis of total usage and variance.

💡Recipe Definition

Recipe definition involves linking specific sales items to their corresponding inventory components in the system. The script discusses how properly defining recipes ensures accurate tracking of how much inventory should have been used based on sales, which is crucial for precise variance analysis and maintaining inventory accuracy.

Highlights

Use the cost and variance report to understand real costs and variances in each category.

High cost percentage in a category likely indicates significant variance.

The email provides an overview of cost percentages and total variance percentages.

Follow three steps to improve the quality of the cost and variance report.

Verify the stock count to ensure the accuracy of the report.

Check and tick off items that may have been wrongly counted during the stock count.

Define POS buttons to associate sales with specific recipes for better report quality.

The report includes a cost percentage summary for each category.

Learn how the cost amount is calculated for each category, using purchases and inventory use.

The formula for calculating inventory use is provided in the report.

Cost percentage is calculated based on inventory use and sales.

Variance summary takes into account recipes defined in stocky.

Unclear recipes can affect the accuracy of the variance summary.

Theory inventory on hand value is compared with the actual counted value to find variance.

Variance is broken down by category and presented as a percentage of the expected inventory.

Individual item variances are detailed, including previous stock, purchases, waste, and sales.

Bundle feature allows for the presentation of multiple products as a single item in the report.

Bundling helps to simplify variance reporting for items of different sizes or suppliers.

Items within a bundle can still be tracked individually for detailed analysis.

Transcripts

use the cost and variance report for two

things number one see what your real

costs are on every

category and number two see what

variance you have on every single

item so if the cost percentage is high

on a specific category it's very likely

that the variance will show you why it's

high let's go through how you should

read and use the cost percentage and

variance report that we are sending out

in the email we are sending you will

have an overview of your cost

percentages you will have an overview of

your total variance

percentage you will have some easy steps

in order for for this report to be on a

higher uh quality rate so by following

these three steps the quality of the

report will be

higher you have some action items which

is total verified this is on on the

stock count you have when you're

finishing the stock count you have

something called verify count here the

system is listing the top items that

could be wrongly

counted so here check these items if

they are correctly counted and if they

are you can tick them off that you have

checked them this will then again keep

the value or the quality of the stock

count report much

higher then you have Define POS buttons

and how many that is not defined this is

sales from your POS system that is not

defined with any recipe in stock ify so

again Define these POS buttons in order

for the custom variance report to have

higher

quality then in the bottom you have the

actual

report now when we have the report open

we will start from the top and then

we'll go

down so up in the top we have a cost

percent percentage summary so here we

have on every

category what is your cost percentage

and how we are coming to this number I

will go through now so first we have the

column purchases I will take beer now as

an example so we we bought

43520 croner worth of beer in this

period of time this is from your

invoices we're gaing this we wasted this

amount and this is the cost amount of

this one so not your selling price of

beer but actually what you paid for the

beer that you

wasted inventory used and we also

presenting a formula up here on how we

are coming to this inventory use number

so we're taking your previous count so

the worth of your previous count of beer

plus whatever you bought of beer in this

period minus what you wasted of beer and

minus what you counted this this stock

count so this means that we know now how

much beer was used in this period then

the last two I have to do with with

sales so we're taking your discount that

you be given on the category beer

throughout the month throughout the

period and then your total sales of this

category and then we can calculate your

cost percentage based on what inventory

did you use in this period and how much

sales did you have in this period and

you have this then broken down per

category and the total so we have here

also total drink for example that is

including all of these um categories

above and then you have the food one and

the tottal one and as we now went

through this is the summary of your cost

percentage this one doesn't take into

consideration any recipes that is added

in stocky so even if you are not

defining your post buttons which is your

sales from your casa in stock IFI then

this will still work so we are still

taking all your invoices so we know what

you're buying and then we are taking

your sales on category level so we

understand what you're selling so when

you're you're selling beer we know that

you're selling beer from your

PS the next one here down here is taking

into consideration your recipes so this

is the variance summary so here if you

don't Define a recipe in stocky then the

variance here will be affected or if if

the wrong recipe is set up in SOI this

variance will also be affected so here

we are also breaking it down per

category level first we are giving you

Theory inventory on hand value so this

is what you should have on stock of

every single category based on then what

you bought and what you sold in this

period current inventory hand on hand

value is what you actually counted and

then we have the variance between what

you should have and what you counted

breaking down by every category and then

you have a total and then you have how

much percentage is this of what you

should have had and then a total

variance percentage continue down we

have variance on every single

article so let's take now here food for

example we can start with ground beef so

it's saying here on previous stock count

you had 100 pieces on

hand its price per unit was 150 so your

total value of the last stock count on

ground of be beef was

15,000 then you bought 120 pieces in

this period you wasted 10 pieces in this

period and you sold 100 pieces in this

period so here the sales are based on

what your recipes are

saying then based on this one what you

had what you bought what you wasted and

what you sold then you should have 110

kilos on um this stock count that you

were doing now but you only counted

90 which means that you have a a

variance of minus 20 kilos or 20 pieces

of this

item that has a value of this much and

then you see this on every single item

on this report we also have something

called

bundle and bundle is enabling us to show

two separate products at one product in

this report so here for example we have

the hind ketchup which is 1 liter and we

have this organic tomato tomato ketchup

which is 5.5 l so they are both from two

separate suppliers they are two separate

products with two separate sizes but in

this report here we can enable to show

them as one item that is per liter to

show you how much liter in total of

ketchup did you count on last stock

count how much total liters did you buy

how much did you waste sell and then how

many total liters should you then have

on uh on this stock out so instead of

having variance Plus on one and variance

minus on the other because only maybe

one is connected to to a recipe then

here it can be shown as

one same would be on on Drink side we

can take fet branka as an example if you

have one fet branka that is 50 c and one

fet branka that is one liter then you

are serving them when you're serving

shots of fet so you don't care if you

are pouring the one liter or the half

liter one here we can also put them

together in the bundle and just show you

in total this is how many liters of fet

that you have variance on instead of

showing them it's two separate products

in this report so this means that this

top item here it's not actually a

product on your account this is only a

presentation of two items merged as one

on this report you can still track the

items inside the bundle by going on the

item row and then you will see all of

the variants on that specific item as

well but on this top one where we are

bundling them together and presenting

them as uh one unit then you have the

total variance of that up you can locate

which items are in bundles by seeing

these

brackets