Homework Writing Help on Understanding Financial Controls in Food and Beverage Operations

Understanding Financial Controls in Food and Beverage Operations


Students of this course intend to prepare an end of term event to celebrate together with their spouses and children. As one of their colleagues, they have requested me to organize this event on their behalf. This far I have made the necessary preparations and secured a local community pub where the event will be held. Among the sixty invited guests, I have fifty adults and ten children. Ten of these guests are vegetarians and four of them suffer from diabetes. I have a budget of £1,000 to organize for this event. In this report, I will evaluate what I will do to take care of the needs and preferences for these guests, and have an exciting menu for children. In doing so, I will limit the scope of this report to financial controls, purchasing process, and cost and pricing processes. In addition, I will justify the menu that I will develop.

Financial Statements

From a general viewpoint, financial statements for any event are formal financial records for that event. They may be written or unwritten, but in both cases, they must be well formulated and understood. Business ventures have four types of these statements. The first statement known as balance sheet outlines assets, equities, and liabilities for the business. The second statement known as income statement outlines financial performances for the business. The third statement known as cash flow outlines the movement of bank balances and cash for the business (Dopson & Hayes 2011, p. 17). The fourth and the last statement known as statement of equity changes outline the earnings that a business retains after it engages in its business operations. In order to have an efficient financial statement, every business must have financial controls. These controls are the mechanisms used to manage revenue and expenses for businesses (O’Shannessy & Minett 2009, p. 30).  

Our event will not be profit oriented. However, it will involve some financial statements because I will have to work within a budget of £1,000. This money will come from the contribution that my colleagues and I will make towards the event. In actual fact, I will have an operating budget that will outline all the food items I will require for the event and other expenses that will be incurred. This budget will be guided by the four types of financial statements that businesses have, but in a slightly different form. In terms of balance sheet, our event will have a balance sheet of £1,000. This amount of money will also be part of our income statement because we shall not engage in profit making venture (O’Fallon & Rutherford 2011, p. 199). Accordingly, I will budget for this money and spend it throughout the entire event without exceeding it. This notwithstanding, our event will have a cash flow statement that will include the amount of money that I will spend or authorize serving staff to spend on every item. The cash flow statement will dictate what serving staff or I will do in the entire event. Lastly, our event will have a statement of equity changes, but this statement will be slightly different from a business one. This statement will include all the expenses that I will incur in organizing the event as well as the amount of money that might remain at the end of the party.

Cost and Pricing Process

The issue of costing and pricing will be very instrumental in this event. It will give an overview of the amount of money I will spend on every item. It will also help me to stick to the operating budget that I will develop. For these two reasons, the most important issue in this process will be to outline the operating procedures. This will include developing a list of food items that I intend to include on the menu as well as indicating their respective prices on that list (Ojugo 2010, p. 188). One notable aspect regarding the cost and pricing process in hospitality industry is that this process keeps on changing because food prices keep on fluctuating. In spite of this fact, some costs may be controllable because they vary while others may be non-controllable. The non-controllable costs are usually fixed.    

With regard to this issue, I will develop a list of all food items that I will include on my menu. After developing this list, I will evaluate the current prices for those items and indicate them against their respective items. In case I expect these prices to change, I will quote them on higher side. However, I do not expect price changes to affect our event because our event will be held soon. As I do this, I will be careful to stick to my operating budget of £1,000. Therefore, my budget will determine significantly the units of food items that I will include on my shopping list (Davis et al. 2013, p. 178). At the same time, I will use the non-controllable costs that will be on my operating budget to set the prices of some of the items that will not be of first priority in the party. Kindly find the list of items and their prices on the appendix.

Purchasing Process

From a general viewpoint, the process of purchasing involves searching, selecting, purchasing, receipting, storing, and using the items in question. This means that the person that purchases food items in a hospitality industry does not only purchase those food items, but also receives, stores, and gets involved in other aspects that pertain to those items. For well-established organizations, this exercise falls under procurement departments. One notable aspect with this process is that it is part of control mechanisms applied in hospitality industry. Indeed, it does not only limit the items purchased, but also limits the amount of money spent on each of them (Davis et al. 2013, p. 163).    

In my case, the above processes will be instrumental in organizing the event even though I will not personally execute some of those things. For my case, I will be involved in selecting the food items that will be required in our party. In addition, I will list those items on the inventory with their respective prices (Davis et al. 2013, p. 163). On the other hand, the serving staff from the local community pub will be responsible for searching, purchasing, receipting, storing, and using the food items that I will select. The fact that I will select and list food items with their respective prices on an inventory means that I will be careful to ensure that the entire process sticks to my operating budget (Wood & Brotherton 2008, p. 434). Although different purchasing methods can be utilized to acquire the food items that I will have on my inventory, I will recommend the serving staff to use the cash and carry method because the market is a few meters away from the pub. If this method will not be practicable, I will advice the serving staff to order those items from the person that supplies them with such products. These two methods will minimize cost as well as be efficient in the delivery of items.


According to Ojugo, the issue of devising and preparing an efficient menu depends on the way an individual understands his/her customers (2010, p. 32). In addition, it depends on what those customers want. This issue depends largely on customers’ needs and preferences. In my case, the 60 guests that will be attending the event will be my customers even though they will not pay for the food and beverages I will prepare for them. Accordingly, I will have to look into their needs as well as their preferences. This means that I will have to look into the needs of the vegetarians, children, and diabetic guests as well as other guests that will be attending the party. Apart from this, a healthy menu should include carbohydrates, vitamins, proteins, and fluid. For this reason, it will be paramount for me as I organize the party to make sure that my menu meets this criterion. Ojugo argues that organizations in hospitality industry usually develop menus that focus their attention on making profit (Ojugo 2010, p. 38). However, this will not be my focus because I will not be engaging in a profit-making venture. Instead, my focus while developing the menu will be to operate within the budget of £1,000. The following is a sample menu that I will develop for my guests. This menu takes care of the needs and preferences for the guests that will be attending the party.  

  Starter Drinks and beverages Meals
1 Bananas Milk Brown and white rice
2 Oranges Fruit juices both sweetened and unsweetened Steamed chicken
3 Melons Soft drinks Boiled and fried potatoes
4 Soup Bottled water Fried fish
5 Desserts/sweets   Beef stew
6     Vegetables
7     Peas
8     Beans
9     Fried French beans
10     Brown and white chapattis

Justification of the Recipe

Based on the type of guests that will be attending the party, the most important aspect has been to compile a food and beverage menu that takes care of each group of my guests. On the other hand, as it can be seen from the menu, the three main classes of food that should be in a healthy menu are on the menu. For the proteins, I have included beans, peas, beef, fish and chicken on the menu. For the vitamins, I have included vegetables and different types of fruits on the menu. For carbohydrates, I have included rice, chapatti and potatoes on the menu.    

With regard to the types of guests that will be attending the party, I have four groups of these guests. The first group comprises diabetic guests. These guests have medical conditions that dictate the type of food and beverages they take. Given that I do not know their types of diabetes, I have included food and beverages for both types of diabetes. These guests may take fruits of their choices, beans, fish, brown rice, vegetables, chicken meat, and peas (American diabetes association 2007, p. 10). The second group of my guests comprises vegetarians. Although different types of vegetarians take different types of food, most of them do not take meat. These guests will take vegetables, fruits, peas, beans, French beans, and rice. In fact, these guests will have a variety of foods to choose from apart from meat related ones. The third group of guests comprises ten children. This group of guest does not have any particular type of food to take except that food served to them should be exciting and easy to chew. In this respect, I have included different types of food that are easy to chew and exciting. In addition, I have included sweets and desserts for children. The fourth group of guests comprises adults without any specification of food. This group of guests will select any type of food that is on the menu. I have tried as much as possible to include food that is most popular and preferred by my colleagues. Therefore, it is my hope that the menu will be exciting to my guests.


The purpose of preparing this report has been to give an overview of what I will do as I prepare the party my colleagues and I intend to have at the end of this term. Accordingly, with the help of this report, I have been able to identify various financial controls that I will use as I organize the party. Those financial controls will be in form of financial statements used in the hospitality industry, but they will be slightly different because our event will not be geared towards making profit. I have also been able to devise and justify a menu for my guests. The basis of the menu has been the needs and preferences of my guests.


American diabetes association. 2007. The new family cookbook for people with diabetes. New York: Simon and Schuster.

Davis, B. et al., 2013. Food and beverage management. New York: Routledge.

Dopson, L., & Hayes, D., 2011. Food and beverage cost control. Hoboken, N.J., John Wiley & Sons.

O’Fallon, M., & Rutherford, D., 2011. Hotel management and operations. Hoboken, John Wiley & sons.

Ojugo, C., 2010. Practical food & beverage cost control. Clifton Park, NY, Delmar, Cengage Learning.

O’Shannessy, V., & Minett, D., 2009. The road to hospitality. Pearson Australia: Pearson Higher education.

Wood, R., & Brotherton, B., 2008. The SAGE handbook of hospitality management. London, SAGE Publications. 


  Items Units  Total cost/price (£)
1 Bananas 40 30
2 Oranges 30 30
3 Melons 20 30
4 Dessert/sweets 2 packets 20
5 Milk 40 liters 50
6 Bottled water 40 bottles 30
7 Rice (Brown & white) 10 kilograms 80
8 Chicken 5 50
9 Potatoes 1 bucket 30
10 Fish 10 50
11 Beef 7 50
12 Vegetables   70
13 Beans 5 kilograms 50
14 Peas 5 kilograms 50
15 French beans 5 kilograms 50
16 Brown home baking flour 1 packet 30
17 White home baking flour 2 packets 30
18 Soup   30
19 Soft drinks 40 bottles 50
20 Service charge   120
21 Onions   10
22 Miscellaneous   60
23 Total   1,000