By: Mohamed Sanih, Gn. Fuvamulah, Maldives
Dear Readers,
The role or function of the Cost Controller is quite complex and sometimes requires a varying degree of flexibility of active and passive roles of duties & functions within the resort.
This is not an finance job where you simply sit in your seat and work on figures, this job requires you to be both physically active and needs regular spot checks, inspections and control of the total resort inventory process.
The Cost Controller is an divisional head within the finance department, and in most scenarios reports directly to the resort Director of Finance.
He is also the head of all Stores personnel and Head Storekeeper or in some resorts the Material Controller will report directly to the Cost Controller.
He has the power to question the Executive Chef or F&B Director / Manager in the resort in relation to the wastage of company resources or the controlling of costs for F&B meals, F&B drinks, spoilage and breakages etc.
Ultimately, he will prepare a Daily, Weekly and Monthly F&B Cost Reports for both Staff and Guest and will question the Executive Chef or F&B Manager if the actual F&B costs exceed the resort budgeted figures.
The Cost Controller is also responsible for undertaking spot check inventory, monthly inventory, reconciliation of monthly inventory balances with co-ordination and support of the finance & stores personnel.
He is also responsible to co-ordinate with the Housekeeping Department and Stewarding personnel to ensure all linen, crockery, cutlery stocks are properly accounted, recorded and verified to ensure they are done in accordance to company policies and procedures.
He also needs to check the fish supplies delivered to the resort in co-ordination with the Executive Chef to make sure spoilage or non-standard fish stocks are not purchased by the resort and that such purchases are done in accordance to accepted company policy.
The Cost Controller, will also visit the Supply Dhoni on delivery days with co-ordination with the resort purchasing personnel and make sure of the following:
1) Meat stocks are kept under the proper temperature, (If temperature is not working, co-ordinate with engineering dept. technician to fix such issues)
2) Veggies & Fruits are kept under the proper temperature.
3) Other stocks delivered to the resort in the supply dhoni are in proper condition.
4) Supply is unloaded and delivered to the resort stores properly under accepted policies and procedures.
5) Receiving Officer from Stores does his task properly.
6) Chief Storekeeper is also present to check & unload the supply dhoni process.
The Cost Controller is also responsible to make sure to control two types of inventory, one the is the operational inventory, which is the F&B stocks and the other is the:
1) Stocks used by Housekeeping, example: Linen & Housekeeping Inventory;
2) Stocks used by Resort Spa, e.g. Spa Ointments, Creams & Lotions etc.
3) Stocks used by Stewarding, e.g. Crockery, Cutlery etc.
The latter such as Linen and Crockery Cutlery inventory is not taken on a monthly process, but mostly on a quarterly basis or 6 month basis based on the resort policies & procedures. However, he is responsible to do the monthly reconciliation for these stocks on a monthly basis regardless of whether the physical count is taken on a qaurterly basis.
The reconciliation process for F&B Stocks normally involves:
Scenario 01
Opening Inventory Balance: 1,000
+ Purchases During the Month: 1,500
- Consumption During the Month: (400)
- Spoilage during the Month: (100)
Should be Closing Balance: 2,000
Physical Count for the Month should be equal to 2,000 or need to check, question the storekeeper and or reconcile to the 2,000 and find out the reason for such discrepancies or variances.
Strict action should be taken for any misuse for F&B stocks and reports should be made to the Director of Finance for proper action and follow up.
In theory, this seems very easy and sounds and looks easy but in reality it is an total different picture, since the resort is operating 24/7 and purchases is happening daily and supply stocks seems to arrive on a daily or weekly or bi-weekly basis. So when you do the month end inventory process, you have to be careful not to mix up these factors and have a proper cut-off time factor.
Example:
If we take the above scenario 01:
What if we receive an supply dhoni stocks on the last day of the month or 02 days before month end, what do we do then?
Do we consider this in the current month end balance or do we take it to the next month end balance?
How will this affect the physcial stock count? When is my cut-off date? How will this affect or complicate the inventory process?
When do the receiving officer stop updates the system or carry forward such balance to next month? When is the cut-off time?
The physcial stock count will always change considering the daily purchases and supply dhoni deliveries which happens on a weekly or bi-weekly basis depending on the resort location and distance.
Therefore, it is very important to have a proper cut-off, time schedule and co-ordination for the month end inventory process.
The reconciliation process for Linen and Crockery, Cutlery Stocks normally involves:
Scenario 02
Opening Inventory Balance: 1,000
+ Purchases During the Month: 1,500
- Breakages during the Month: (500)
Should be Closing Balance: 2,000
Physical Count for the Month should be equal to 2,000 or need to check, question the storekeeper and or reconcile to the 2,000 and find out the reason for such discrepancies or variances.
Strict action should be taken for any misuse of Linen and Crockery, Cutlery Stocks and reports should be made to the Director of Finance for proper action and follow up.
All spoilage and breakage reports should be prepared in accordance to hotel policies & procedures and should be duly signed & approved.
Below is an Generic Overview list of the Duties & Responsibilites of the Cost Controller within the Maldives Resort Industry:
- Look after the day to day operations of Cost Control and Main Stores.
- Prepare monthly food and beverage cost control reports and other journals related to food
& beverage and other expenses.
- Regular and frequent spot checks of the outlets.
- Observation during supply days, such as weekly supply and check the necessary spoilage
reports prepared by storekeeper.
- Comparison of the market list against the stock on hand of the items in the stock.
- Verify all processes relevant to the receiving and issuing procedures in respect of all main
store stock items.
- Make price comparison report for all the items purchased.
- Prepare necessary SOP’s for cost control, stores and purchasing function, where necessary
and required, upon approval by FC.
- Organize and attend all outlet and stores inventories & check it against the system reports.
- Prepare any reports, which are requested by the Executive Chef and F&B Manager.
- Supervision of all the work and duties of the cost controller assistant and storekeepers /
assistants.
- Monitor slow moving and non-moving items and send out such reports to all concerned
departments.
- Create the necessary reports, which is relating to Cost Control function.
- Check daily receiving report against invoice and purchase order and ensure the invoices for
the month are posted in the same day without delay.
- Ensure all inter/outlet department transfers are done properly in the inventory
management system.
- Prepare costing for the recipes and menus done by the Executive Chef and F&B Director /
Manager.
- Account for all spoilages and make sure they are properly accounted and recorded.
- Get the details and Analyze all officer checks, ENT check or get this report from the income
or night auditor and post such details to relevant cost accounts
- Prepare month end Journals for Food, Beverage and Other Costs
- Physically present and supervised the receiving of all items from supply jetty to the stores
- Monitors and analyses monthly operating results against budget and informs the Senior
Accountant or Financial Controller of any anomalies.
- Assists the Financial Controller in the preparation of financial outlooks and forecasts.
- Plans, organizes and implements accounting operations and objectives; coordinates and
integrates all activities toward achievement of established goals and objectives.
- Supervises, trains and evaluates accounting professionals, and entry level accounting and
support staff.
This article maybe further expanded later, but this is an overview and some of the decisions which i faced and had to undergo while working as a Cost Controller, in a reputable resort within the Maldives resort sector.
Your comments and feedback is always welcome. I will include your insight as well, if this will further enrich the job, role and scope of this function.
Many Thanks & Regards,
Mohamed Sanih, Gn. Fuvamulah
