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F&B Management Terminology

Acceptance Hours. The hours of the day in which an operation is willing to accept food and beverage deliveries.

Accounting Period. A period of time, that is, hour, day, week, or month, in which an operator wishes to analyse revenue and expenses.

Accounts Receivable. The term used to refer to guest charges that have been billed to the guest but not yet collected.

Actual Cost Pricing. This method for determining menu prices is most often used by caterers. It takes the total budget amount and divides it into percentages for labour, overhead, food cost, and profit. The four percentages must equal 100 percent.

Add-On Items. Primarily used in restaurants, these are menu items that customers order in addition to their entrée such as salads, beverages, and desserts.

A la carte. Applicable to all types of food-service operations, a la carte is a menu or portion of a menu on which each item is ordered separately and has its own price.

Alcoholic Beverages. Those products that are meant for consumption as a beverage and that contain a significant amount of ethyl alcohol. They are classified as beer, wine, or spirits.

Apprentice. In an apprenticeship, students work full time under a master chef and go to school part-time. They are paid salaries.

AP Required. As purchased amount necessary to yield the desire EP weight. AP required is computed as EP required divided by yield percentage.

As Needed. A system of determining the purchase point by using sales forecasts and standardized recipes to decide how much of an item to place in inventory.

As Purchased (AP). This term refers to the weight or count of a product as delivered to the foodservice operator.

Assembly/Serve System. Used most commonly in cafeteria or non-restaurant settings, fully prepared foods are stored, assembled, and reheated.

Attainable Food Cost. That cost of goods consumed figure that should able given the product sales mix of a particular operation.

Auditors. Those individuals responsible for reviewing and evaluating proper operational procedures.

Average. The value arrived at by adding the quantities in a series and dividing the sum of the quantities by the number of items in the series.

Average Sales Per Guest. The mean amount of money spent per customer during a given financial accounting period. Often referred to as check average.

Bill of Lading. Document that conveys title to the goods purchased.

Back Of The House. The kitchen production area of a food service establishment.

Back Haul. Occurs when a driver delivers a shipment to a hospitality operation and then refills the empty truck with items that needed to be delivered to another location.

Bain-Marie. A kitchen term that can refer to a hot water bath or the vessel used for the hot water bath. The hot water bath is used to keep foods hot.

Banquet Cart. This mobile piece of equipment is typically used for buffet style dining. This cart may be insulated or non-insulated and typically comes equipped with shelving or racks for plates, and an electrically powered heating or refrigeration device.

Bars and Taverns. Considered a category of the food services industry. the United States Census Bureau defines them as establishments known as bars, taverns, night clubs, or drinking places primarily engaged in preparing and serving alcoholic beverages for immediate consumption.

Beer. A fermented beverage made from grain and flavoured with hops.

Beer System. A method used in some restaurants or bars for beer dispensing. The kegs of beers are kept in a refrigerated location and a system of pressurized, insulated, and refrigerated lines transports it to dispensers at the bar.

Beginning Inventory. The dollar value of all products on hand at the beginning of the accounting period. This amount is determined by completing a physical inventory.

Best Price. The lowest price that meets the requirement of both the food service operation and its vendor.

Beverage Costs. The costs related to the sale of alcoholic beverages.

Bid Sheet. A form used to compare prices among many vendors in order to select the best prices.

Bin Card. An index card with both additions to and deletions from inventory of a given product. To facilitate its use, the card is usually affixed to the shelf that holds the given item. Used in a perpetual inventory system.

Biological Hazard. Not just a medical term, in the food services industry this term refers to the potential contamination of food by pathogenic microorganisms.

Bonding. Purchasing an insurance policy to protect the operation in case of employee theft.

Branded Product Costs. An accounting term for franchisees, this refers to the costs of products it is necessary to buy to maintain the franchise or license agreement.

Break-Even Point. The point at which operational expenses are exactly equal to sales revenue.

Broken Case. A case of beverage products in which several different brands or products make up the contents of the case.

Broker. A wholesaler who brings buyers and sellers together.

Budget. A forecast or estimate of projected revenue, expense, and profit for a defined accounting period. Often referred to as plan.

Blind Receiving. When the invoice accompanying a delivery contains only the names of the items delivered. Quantity and price information is missing.

Blast Chillers. A refrigeration unit that circulates cold air. The benefit to using it is that it can reduce the temperatures of hot foods very quickly.

Brix. A kitchen term that refers to the percentage of sugar in a product that contains syrup or other sugar solution.

Bundling. The practice of selecting specific menu items and pricing them as a group, in such a manner that the single menu price of the group is lower than if the items comprising the group were purchased individually.

Business and Industry. This is a segment of the food services industry that feeds employees in offices, factories, and plants.

Buying Groups. Companies that consolidate purchases and provide support for their distributor members.

Call-In. A system whereby employees who are off duty are required to check in with management on a daily basis to see if the volume is such that they may be needed.

Call Liquors. Those spirits that are requested (called for) by a particular brand name.

Carryover. A menu item prepared for sale during a meal period but carried over for use in a different meal period.

Category Food Cost Percentage. A food cost percentage computed on a portion of total food usage. Categories include meat, seafood, dairy, produce, etc.

Cherry Picker. A customer who buys only those items from a supplier that are the lowest in price among the supplier’s competition.

Check Averages. Used as a measurement and defining factor most often in the food services industry, this term refers to the average dollar amount of checks at a particular restaurant.

COLA. Cost of living adjustment. A term to describe a raise in employee Pay- Comp. Short for the word complimentary, which refers to the practice of management giving a product to a guest without a charge. This can be done fora special customer or as a way of making amends for an operational error.

Comfort Foods. Menu items intended to remind customers of old fashioned, traditional, home-cooked American meals.

Commercial Establishments. In the industry this term refers to public establishments, which could be housed in freestanding buildings or included in or part of another establishment Commissary System. Used primarily by food service operations with multiple locations, a central production kitchen controls the cooking and food supply and delivers the food to the other location.

Contract Price. A price mutually agreed upon by supplier and operator. This price is the amount to be paid for a product or products over a prescribed period of time.

Contribution Margin. The profit or margin that remains after product cost is subtracted from an item’s selling price.

Contribution Margin For Overall Operation. The dollar amount that contributes to covering fixed costs and providing for a profit.

Contract Food Services. Used most commonly by non-restaurant operations, this refers to companies that offer cafeteria or food services to their employees, but have contracted with outside vendors to supply the food and/or service.

Contribution Margin Income Statement. A financial summary that shows P&L items in terms of sales, variable costs, contribution margin, fixed costs, and profit.

Contribution Margin Per Menu Item. The amount that remains after the product cost of the menu item is subtracted from the item’s selling price.

Controllable Expense. An expense in which the decisions made by the food service manager can have the effect of either increasing or reducing the expense.

Cost Of Food Consumed. The actual dollar value of all food used, or consumed, by the operation.

Cost Of Food Sold. The dollar amount of all food actually sold, thrown away, wasted, or stolen plus or minus transfers from other units, minus employee meals.

Costing. An important part of budgeting, forecasting, and planning, this is the process used to determine an operation’s costs and potential profits.

Critical Control Point. Part of the HACCP food safety process, any point in a food system where loss of control could pose an unacceptable health risk.

Cost Per Guest. A method of analyzing costs that uses the total expense and total number of guests served to establish an actual cost of servicing each guest.

Count. Term used to designate size.

Credit Memo. An addendum to the vendor’s delivery slip (invoice) that reconciles differences between the delivery slip and the purchase order.

Cycle Menu. A menu that is in effect for a predetermined length of time such as7 days or 14 days.

Daily Inventory Sheet. A form that lists the items in storage, the unit of purchase, and the par value. It also contains the following columns: on hand, special order, and order amount.

Daily Menu. A menu that changes every day.

Desired Profit. The profit that an owner seeks to achieve on a predicted quantity of revenue.

Draft Beer. The term used to identify beer products sold in a keg.

ECR. Electronic cash registers that also maintain data of all products sold.

Edible Portion. This is a kitchen term that refers to the weight of a menu item after it has been trimmed, prepared, and cooked.

Danger Zone. In the food services industry this term refers to the United States Food and Drug Administration’s determination that foods at temperatures between 41 and 140 degrees are at higher risk for contamination.

Delivery Ticket. Written receipt summarizing what was ordered and delivered.

Dram Shop Laws. The term used to describe a series of legislative acts that, under certain conditions, holds businesses and, in some cases. individuals, personally responsible for the actions of guests who consume excessive amounts of alcoholic beverages. These “laws” shift the liability for acts committed by an individual under the influence of alcohol from that individual to the server or operation that supplied the intoxicating beverage.

Edible Portion (EP). This term refers to the weight or count of a product after it has been trimmed, cooked, and portioned.

Embezzlement. The term used to describe the theft of a type where the money, although legally possessed by the embezzler, is diverted to the embezzler by his or her fraudulent action.

Ending Inventory. The dollar value of all products on hand at the end of the accounting period. This amount is determined by completing a physical inventory.

Ethics. The choices of proper conduct made by an individual in his or her relationships with others.

Expense. The price paid to obtain the items required to operate the business. Often referred to as cost.

Extended Price. The price per unit multiplied by the number of units. This refers to a total unit price on a delivery slip or invoice.

FIFO. With the first-in, first-out method of storage, the operator intends to sell his or her oldest product before selling the most recently delivered product.

Fiscal Year. Start and stop dates for a 365-day accounting period. This period need not begin in January and end in December.

Fixed Average. The average amount of sales or volume over a specific series or time period, for example, first month of the year or second week of the second month.

Fixed Expense. An expense that remains constant despite increases or decreases in sales volume.

Fixed Payroll. Those dollars spent on employees such as managers, receiving clerks, and dieticians whose presence is not generally directly dependent on the number of guests served.

First-In-First-Out. Used by a variety of food services organizations, this is a food inventory method that is used to ensure that products are used in the order they arrive at the location.

Forecasting. The estimate of the quantity of food needed for a day or other specified time period.

Food Cost Percentage. The portion of food sales that was spent on food expenses.

Food Costs. The dollar costs associated with actually producing the menu item(s) a guest selects.

Forecasting. The process of estimating future revenue or expenses of a hospitality operation.

Franchiser. The entity responsible for selling and maintaining control over the franchise name. (Alternative spelling: franchisor.)

Free-Pouring. Pouring liquor from a bottle without measuring the poured amount.

Fresh Dated. A food package upon which a date is stamped to indicate the freshness of its contents.

Full—Service Restaurants. Restaurants that offer a relatively broad menu along with table, counter, and/or booth service. Customers are waited on at their tables rather than walking to order counter.

Goal Value Analysis. A menu pricing and analysis system that compares goals of the foodservice operation to performance of individual menu items.

Goods Available For Sale. The sum of the beginning inventory and purchases. It represents the value of all food that was available for sale during the accounting period.

Grade. In the food services industry meats, poultry, and eggs are given grades to designate their quality. The higher the quality of the product, the higher the grade will be. .

Gross Margin. Accounting term that indicates the amount derived by subtracting the unit cost from the unit price, or total cost from total price.

Gross-Profit Pricing. This method of menu pricing is appropriate for established organizations with several months of history, and after an item has been on the menu prior to knowing its actual costs. This is calculated using the following information: past revenue in dollars, past gross profit in dollars, past number of customers, and the item’s actual food cost.

Group Purchasing Organizations. Organizations of the food services industry whose main function is to consolidate purchases and provide support for their food service distributor members. Most small, medium, and even some large broad line distributors are members of a group purchasing organization.

Guest Check. A written record of what was purchased by the guest and how much the guest was charged for the item(s).

Guest Count. The number of individuals served in a defined time period.

Half-Bottle. A bottle of wine that is approximately one-half the size of the standard750-ml wine bottle. Typically sold for either room service or dining room consumption. Also known as a split.

Hardware. The machines and equipment used to operate computer software.

Hazard Analysis. Used in all food service operations, this is a system for food safety that details safe food handling procedures and potential hazards to food safety.

Head Size. The amount of space on the top of a glass of beer that is made up off 0 am. Thus, a glass of beer with 1 inch of foam on its top is said to have al-inch head.

House Wine. The term used to indicate the type of wine to be served in the event a specific brand name product is not requested by the guest.

Hydrometer. An instrument used to measure the specific gravity of a liquid.

Ideal Expense. Management’s view of the correct or appropriate amount of expense necessary to generate a given quantity of sales.

Ingredient Room. A storermin or section of a storeroom where ingredients are weighed and measured according to standardized recipes and then delivered to the appropriate hilt’ht‘n production area.

Inventory Turnover. The number of times the total value of inventory has been purchased and replaced in an accounting period. Storage by management for Use in an operation.

In-house Management. Mainly used in food service Operations other than restaurants. this term primarily refers to facilities that own and Operate their own food service departments.

Invoice Receiving. Common type of receiving procedure. Involves comparing the invoice with the order record and then proceeding to check quality, quantity, and AP prices of items delivered.

Invoice. A bill from a vendor for goods or services, often presented as the goods are delivered or after the services performed.

K-Minus. Industry term used to refer to a food service facility that does not contain a kitchen. Instead a central kitchen prepares the food and transports it to the facility.

Jigger. A bar device used to measure predetermined quantities of alcoholic beverages. Jiggers usually are marked in ounces and portions of an ounce, for example. 1 ounce or 11D 2 ounces.

Job Description. A listing of the tasks to be performed in a particular position.

Job Specification. A listing of the personal skills and characteristics needed to perform those tasks pertaining to a particular job description

Layout. Used primarily in kitchens, this refers to a plan for equipment placement in a given room.

Labour Expense. All expenses (costs), including payroll, required to maintain a work force in a foodservice operation.

LIFO. With the last-in, first-out method of storage, the operator intends to sell his or her most recently delivered product before selling the older product.

Loss Leader. A menu item that is priced very low for the purpose of drawing Large numbers of customers to the operation.

Managerial Accounting. The process of documenting and analyzing sales. expenses, and profits. Sometimes referred to as cost accounting.

Minimum Order Requirement. The smallest order, usually expressed in dollar value, that can be placed with a vendor who delivers.

Minimum Sales Point (MSP). The dollar sales volume required to justify staying Open.

Minimum Staff. The term used to designate the least number of employees, or payroll dollars, required to operate a facility or department within the facility.

Mixed Expense. An expense that has properties of both a fixed and a variable expense.

Meat Tag. It contains two parts duplicate parts. One part is attached to the item when it is received and placed into storage, the other one goes into the controller’s office.

Menu Explosion. Used by management or owners to determine kitchen equipment needs in new or remodel kitchens, this is a process that calculates the amounts of food prepared for each menu item in a specific kitchen.

Menu Matrix. A menu matrix is used to determine the amount of producté sold in a restaurant, and is typically used to determine food costs.

Menu Pattern or Meal Plan. This term can be used by all categories of the food services industry and refers to an outline of each menu category and the number of selections offered in each category.

Negligent Hiring. Failure on the part of an employer to exercise reasonable care in the selection of employees.

Net Income. The profit realized after all expenses and appropriate taxes for a business have been paid.

Night Drop. When the delivery driver has a key to the facility, enters it when closed for business, leaves the shipment, locks up, and goes.

Non-Controllable Expense. An expense that the foodservice manager can neither increase nor decrease.

Occupancy Costs. Expenses related to occupying and paying for the physical facility that houses the foodservice unit.

OJT. On-the-job training. A method of training in which workers are training while they actually are performing their required tasks.

On-Call. A system whereby selected employees who are off duty can be contacted by management on short notice to cover for other employees who are absent or to come to work if customer demand suddenly increases.

Open Bar. A bar in which no charge for an individual drink is made to the customer, thus establishing an all-you-can-drink environment. Sometimes refer red to as a hotel bar.

Opportunity Cost. The cost of foregoing the next best alternative when making a decision. For example, with two choices, A & B, both having potential benefits or returns, if A is chosen, then the potential benefits from choosing Bare lost.

Other Expenses. The expenses of an operation that are neither food, beverage, nor labour.

Oxidation. A process that occurs when oxygen comes in contact with bottled wine, resulting in a deterioration of the wine product.

Padded Inventory. The term used to describe the inappropriate activity of adding a value for non-existing inventory items to the value of total inventory in an effort to understate actual costs.

Par Level. A system of determining the purchase point by using management established minimum and maximum allowable inventory levels for a given inventory item.

Payroll. Total wages and salaries paid by a foodservice operation to its employees.

Percent. The number “out of each hundred.” Thus, 10 percent means 10 out of each 100. This is computed by dividing the part by the whole.

Percent Selecting. A formula for determining the proportion of people will buy a given menu item from a list of menu choices.

Percentage Variance. The change 1n sales, expressed as a percentage that results from comparing two operating periods.

Perpetual Inventory. An inventory control system in which additions to and deletions from total inventory are noted as they occur.

Perpetual Inventory Card. A bin card that includes the product’s price at the top of the card, allowing for continual tracking of the quantity of an item on hand and its price.

Physical Inventory. An inventory control system in which an actual or physical count and valuation of all inventory on hand is taken at the close of each accounting period.

Physical Inventory. An actual counting and valuing of all products kept in your hospitality operation.

Point Of Sales (POS) System. A system for controlling hospitality operations’ cash and product usage by using a computer processor depending on the size of the operation, additional computer hardware communication devices, and/or software.

Popularity Index. The percentage of total guests choosing a given menu item from a list of menu alternatives.

Predicted Number To Be Sold. A method of determining the number of a given menu item that is likely to be sold if the total number of customers to be served is known.

Premium Liquors. Expensive call liquors.

Price Blending. The process of assigning prices based on product groups for the purpose of achieving predetermined cost objectives.

Price Spread. The difference in price on a menu between the lowest and highest priced item of a similar nature.

Productivity. The amount of work performed by a worker in a set amount of time.

Productivity Ratio. This formula refers to the total unit output divided by the total unit input.

Productivity Standard. Management’s expectation of the productivity ratio of each employee. Also, management’s view of what constitutes the appropriate productivity ratio in a given foodservice unit or units.

Product Specification. A detailed description of an ingredient or menu item.

Pilferage. Refers to minor theft. For instance, employees snatching a drink while on the clock, or guests swiping a wine glass.

Profit. The dollars that remain after all expenses have been paid. Often referred to as net income.

Profit and Loss Statement (P&L). A detailed listing of revenue and expenses fora given accounting period.

Projected Sales. Sales that may be determined by either dollar sales or customer count. Projected sales are established by using sales histories and other knowledge the operator may have that could impact total volume. They are predictions of future sales volume.

Pull Date. Expiration date on beverage products, usually beers, after which they should not be sold.

Purchase Order. A listing of products requested by the purchasing agent. The purchase order, or PO, lists various product information, including quantity ordered and price quoted by the vendor.

Purchase Point. The point in time when an item held in inventory reaches a level that indicates it should be reordered.

Purchases. The sum cost of all food purchased during the accounting period. Determined by adding all properly tabulated invoices for the accounting period.

Quick-Change Artist. A guest who, having practiced the routine many times, attempts to confuse the cashier; in his or her confusion, the cashier gives the guest too much change.

Recipe Ready. A recipe ingredient that is cleaned, trimmed, cooked, and generally completed, save for its addition to the recipe.

Refusal Hours. Those hours of the day in which an operation refuses to accept food and beverage deliveries.

Reporting Period. The process of reporting a time period for which records are being maintained. This may be of the same duration as an accounting period.

Requisition. When a food or beverage product is requested from storage by an employee for use in an operation.

Return On Sales (ROS). Often referred to as operating profit percentage. RO Scan also be stated in whole dollar terms.

Revenue. The term used to indicate the dollars taken in by the business in a defined period of time. Often referred to as sales.

Rolling Average. The average amount of sales or volume over a changing time period, for example, the last ten days or the last three weeks.

Stock Requisition. A formal request made by an employee for items needed to carry out necessary tasks.

Safety Stock. These are additions to par stock, held as a hedge against the possibility of extra demand for a given product. This helps reduce the risk of being out of stock on a given item.

Salaried Employee. An employee who receives the same income per week or month regardless of the number of hours worked.

Sales Forecast. A prediction of the number of guests to be served and the revenues they will generate in a defined, future time period.

Sales History. A record of sales achieved by an operator in a given sales outlet during a specifically identified time period.

Sales Mix. The series of consumer purchasing decisions that result in a specific food and beverage cost percentage. Sales mix affects overall product cost percentage any time menu items have varying food beverage cost percentages.

Sales to Date. The cumulative sales figures reported during a given financial accounting period.

Sales Variance. An increase or decrease from previously experienced or predicted sales levels.

Sales Volume. The number of units sold. Spoilage. Deterioration of food by microbial or chemical action.

Storage Space. The amount of room, for example, the number of cubic feet, devoted to storeroom and warehouse facilities.

Separated. The term used to describe employees who have either quit, been terminated, or in some other manner have left their place of employment.

Shelf Life. The period of time an ingredient or menu item maintains its freshness. flavour, and quality.

Shorting. When the vendor is unable to deliver the quantity of item ordered for the appointed delivery date.

Software. The set of instructions that control the workings of computer hardware and direct the processing of data.

SOP. Acronym for standard operating procedure.

Slacked Out. A food item that is thought to be fresh but has actually been frozen, thawed, and passed off as fresh.

Source Reduction. Working with food manufacturers and wholesalers to reduce product packaging waste.

Spirits. Fermented beverages that are distilled to increase the alcohol content of the product.

Split Shift. A scheduling technique used to match individual employee work shifts with the peaks and valleys of customer demand.

Spotter. An individual employed by management for the purpose of inconspicuously observing bartenders and wait staff in order to detect a fraudulent or policy violating behaviour.

Standard Cost. The labour cost needed to meet established productivity standards.

Standardized Recipe. The procedures to be used for consistently preparing and serving a given menu item

Standardized Recipe Cost Sheet. A record of the ingredient costs required to produce an item sold by a foodservice operation.

Standard Menu. A printed and otherwise fixed menu that stays the same day after day.

Task Training. The training undertaken to ensure an employee has the skills to meet productivity goals.

Two-Key System. A system to control access to storage areas.

Transfer Slip. Document used to control and account for products moved from one unit to another one within the same company.

Uniform Systems Of Accounts. Standardized sets of procedures used for categorizing revenue and expense in a defined industry, for example, uniform system of accounts for restaurants (USAR).

Value Pricing. The practice of reducing all or most prices on the menu the belief that total guest counts will increase to the point that total sales revenue also increases.

Variable Expense. An expense that generally increases as sales volume increases and decreases as sales volume decreases.

Variable Payroll. Those dollars expended on employees whose presence is directly dependent on the number of guests served. These employees include servers, bartenders, and dishwashers, for example. As the number of guests served increases, the number of these individuals required to do the job also increases. As the number of guests served decreases, variable payroll should decrease.

Vintage. The specific year(s) of production for a wine.

Vintner. Wine producer


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