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Manager Financials

Master the numbers that drive success! This module covers budgeting, cost control, and financial decision-making to help managers boost profits and run a financially healthy restaurant.

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Manager Financials

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  1. MANAGER’S • FINANCIALS

  2. MODULE OVERVIEW • This course is designed to get all Simbisa Brands managers to understand the financial aspects of the business and be able to interpret business performance financially.

  3. OBJECTIVES • At the end of this module you will understand the financial aspects of the business • To have an understanding of company controls • To help managers interpret financial results effectively • Help managers quickly identify gaps in financial undertakings and take corrective action • To have an understanding of Gross Profit

  4. WIIFM • Have a better understanding of the business financials • Helps to be cautious when it comes to stock management • Know the company controls and how they help prevent loss • Learn how to calculate GP and how to prevent GP loses • Have an appreciation of how financials help to keep business afloat

  5. INTRODUCTION • TO • MANAGEMENT • What is management?– Management is getting things done through other people. • As Simbisa we manage in three ways DRS, INVOLVEMENT, & WALKABOUTS. • To be effective one needs to use all three: • DRS helps you with stock management and planning. • INVOLVEMENT helps you to get involved with the team and know how things are done at every station. • WALKABOUTS, this is when you make the rounds checking who is at which station and if he/she is doing things correctly. To be an effective manager you need to know how things are done, this will aid you in knowing how best associates are carrying out their work and where they can improve.

  6. INTERNAL • CONTROLS • These are sets of rules, policies and procedures implemented to provide reasonable assurance that Simbisa Brands operations are effective, efficient, reliable and comply with country law. • Internal controls are measures put in place to safeguard the business. • These measures include Flashing, Banking Deposit, Register Checking, Sales Control, DRS, SOP, etc.

  7. Flashing • Deposit • It’s the responsibility of a cashier to flash money from the cash drawer and give the manager on duty for verification and banking. • Money is flashed every hour or as soon as it reaches $300 whichever comes first. • The manager has to write and balance the deposit book after the shift ends using the flashings done by the cashiers. • Both the manager and the cashier should sign the deposit slip before dropping into the safe. • All sections of the deposit should be filled.

  8. Profit • & Loss • P&L is also known as the Income Statement used to measure the performance of a business for a certain period. It shows whether a company has earned a profit or incurred a loss over that period. • When presenting the P&L Net figures are used. These are derived from Gross Revenue less Tax (Tax includes the VAT and the tourism levy).

  9. Profit • & Loss • Revenue is the amount realized after making a sale. • Average spent (ASP) is obtained by dividing the Total Revenue by the number of customers served. • Every business opens to make sales, and to measure the performance of the business Simbisa sets targets for every store based on its previous performance. When a business performs positively or negatively there will be reasons involved.

  10. Profit • & Loss Let us discuss what are some of the factors that can influence the performance of a business +/- What solutions can we give to get the best results as a business?

  11. Profit • & Loss • These Factors are: • Poor customer service • Economic challenges • These could be crises like the covid most companies closed • Competition • Product availability • Poor management • Holidays and events all around

  12. Profit • & Loss • Costs incurred in the production of goods sold are known as Cost of Sales (COS). • The business measures its performance by subtracting the COS from the Net Revenue giving us Gross Profit (GP). • Formula for GP = NET T/O - COS. • There are set ideals for each shop depending on your Sales Mix. Where there is manufacturing of goods there will always be +/- variance.

  13. What are some of the Factors Affecting GP? Discuss

  14. Profit • & Loss • DRS manages a shop’s GP. • The DRS has to be checked daily if you miss one day you may not be able to recover it. • GP comes from the stocks you opened with what you ordered and how you will use them. • Why would GP not be met? • Are you wasting? • Are your associates helping you by stealing? • Are they over-portioning? We can go on and on these are some of the reasons at the shop level.

  15. Errors • There can be mistakes at accounts like mis-posts, wrong accounts, or wrong values being given. These can be corrected when you check your ledger. However, if you lose stocks in the shop and you cannot find them in accounts, it could be: • Missing GRV • Wrong Stock Closing • Wrong t/o • Pilferage • Not raising grv/grn • Wastages • Wrong capture • Variances

  16. P&L • Whenever you sell a carrier bag the company gets a profit of 0.035, but when you give the plastic for free the company makes a loss of 0.05 so individually how many plastics did you take from the shops without paying. • How much money did the store lose because of plastic only? What about the whole company? • Gross –Tax = Net Turnover • NET – COS (Cost of Sale) = GP$ • GP for a carrier bag: • 0.085 - 0.05 = 0.03547 • GP$ • 100 x • = GP% • NET • 0.03547 • 100 x • = 41.5% • 0.08547

  17. Sample GP • If store A only sold the single items as above the set ideal GP should be 56.99%

  18. $2.00 • SAMPLE GP • 100 x • = 51.95% • $3.85 • Effects of theft and over portioning on GP: • Say the cost of a 2 piecer = $1.85, selling price is $4.50 what is the GP? • Gross – Tax = Net • Net: $4.50 - $1.17 = $3.85 • GP$: $3.85 - $1.85 = $2 • GP = 51.95%

  19. $1.93 • SAMPLE GP • 100 x • = 50.13% • $3.85 • Effects of theft and over portion to gp of a product: • If we add extra sauce $0.02 and a carrier bag $0.05, What will the new cost of the product be? • What GP will it give us? • (NET) $3.85 - $1.92 (cost with extras) =$1.93 (GP$) • GP = 50.13%

  20. P&L • Most shops are likely to make losses if they don't control their Gross Profit. • Do we know the items that are supposed to be in the GP account? • The GRV can be very correct but posted in the wrong account.

  21. P&L • Some costs are fixed with a certain % they vary with t/o, these are called variable costs. After deducting COS we should deduct the variable costs. • Name things that fall under this category one of them is: • RENT

  22. P&L • After variables we remain with the contributions. • Also known as “pocket money”, this is what we have left to pay up other factors or costs incurred in the running of the business. • This would be over a set period under review, items such as staff overheads and other overheads

  23. Over Heads • What are Overheads? • These are variable expenses that are incurred at the shop that are managed and controlled by the managers on the ground including: • Repairs • Generator fuel • Cleaning • Stationary • Fumigation • Zesa • What are staff Overheads? • These are costs that have a direct effect on the affairs of associates, costs like: • Basic Management • Basic NEC • Staff Housing • Staff Transport • Salary cill • Staff Food

  24. Staff Over Heads When analyzing overheads you need to have your ledger and payroll. You need to check which costs are in your account and if they are in the correct account. There is a need to break down the basic management and NEC, based on what you have on the ground vs ledger vs payroll and give reasons if there are any variations. Shop A STRUCTURE Shop manager x 1 @ 450 Shift manager x 2 @800 Cashiers x 4 @1000 Chefs x 4 @800 The total bill on basic management will be $1250 And on basic NEC, we subtract the housing and transport and only take the basic which will be roughly $1200 When a manager is checking for corrections, you compare the bill on the P&L and make adjustments if there are any.

  25. Staff Over Heads • The performance of the store determines whether the shop needs to have 11 associates working or it needs to shed three associates. • When you increase or reduce staff some lines will automatically reduce or increase as well like transport, housing, and welfare. • Staff meals are calculated and charged according to what the store is consuming and the breakdown should tally to the last cent. • The benefits of sending associates on leave are based on the number of days submitted less the days accumulated monthly in $value. Moving people also has its advantages and disadvantages depending on the number of days the associates have and its cost. Every associate accumulates 2.5 days a month, so when you send the associate for three days your benefit will be 0.5 of the day.

  26. Staff Over Heads • The ratio of productivity differs from shop to shop depending on the structure and performance of the shop. It also helps to decide whether one maintains or changes the structure currently operational in the store or to adjust accordingly to give good results at the bottom line. Managers can control the staff overheads by: • Making use of the productivity ratios • Managing the meals taken in the store • Sending more people on leave • Looking for cheaper transport for those using night combies to ferry associates home. • A manager should know every cent that’s being charged in their store and break it down to the last cent.

  27. UNDERSTANDING OTHER OVERHEADS • Managers' effectiveness and efficiency are measured by how well they understand and manage their overheads. • Zesa Units and Costs - Units multiplied by the cost should give the total Zesa bill • Generator Downtime - Shops should split the cost of using the generator based on the amount they use. • Break your Cleaning Bill - Usage of all cleaning material including the mops, detergence, toiletries - How can you save on cleaning • Can you explain the cost of your R&M (Repairs & Maintenance), are they justifiable - All expenses involved in the repairs and maintenance of equipment • Give the Breakdown of your Stationery - This will include all till rolls used, bond paper, control books, etc. • Compare your shop with a similar size shop in terms of turnover and measure efficiency

  28. TRADING PROFIT • This is the money the business remains with after covering all expenses involved in making the turnover for the given period. • In the end, the store needs profit. After combining all staff and other overheads we subtract them from our contribution and get a loss or a profit also known as EBITDA (Earnings Before Interest Tax Depreciation and Amortization)

  29. TRADING PROFIT • When the trading profit is in brackets (2000) that means it is profit, but when it doesn’t have brackets 2000 that means it’s a loss. • WHAT FACTORS AFFECT PROFIT+/-? • Turnover • COS • Expenses

  30. REMEMBER • Recipes are given to safeguard the business from operating at a loss and if we create our own recipes, we will shoot ourselves in the foot. Let’s weigh everything we manufacture. • The extras we give for free affect the store’s GP. • The teams we have need monitoring hence the 80:20 rule, 80% in the front and 20% in the office. • At Simbisa, our MOTTO is Low COS, high GP, less expenses, and more profit. • Maximize on high GP products, upselling and suggesting, to boost turnover using the same structures. • PROFIT • LOSS

  31. Thank you

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