ADMINISTRATION AND FINANCE MANUAL

Transcription

1 AF ADMINISTRATION AND FINANCE MANUAL AUTHOR ACCOUNTS PAYABLE INTRODUCTION The control of inventories is essential to ensure the profitability of a unit. This topic defines the company policy for reporting and maintaining correct inventory. Inventory controls includes the processes of ordering, receiving, counting and valuation of inventory, production of food, supplies and liquor. Inventories are assets: held for sale in the ordinary course of business, in the form of materials or supplies to be consumed in the production process and/or to be used in the rendering of services. OF CONCERN TO All Food Service, Vending, Facilities/Laundries Unit Managers and Above. FORMS TO BE USED Inventory Week Record, Form & Instructions, Form 118* Inventory Summary, Form 119* Inventory Summary (Concessions & Gift Shops), Form * Inventory Summary Warehouse Vending, Form 133* Loss/Shortage Report, Form 090* *Available from SodexoNet s Forms Center. All other referenced forms are printed out of UFS EFFECTIVE February 5, 2016 INVENTORY POLICY Unprepared food, perishable food, cleaning supplies, paper supplies, wine, beer, beverage supplies, vending merchandise, pharmaceutical supplies, concession items, general merchandise, sundry and gift shop merchandise are to be included in inventory. Items removed from the original packaging and have not been altered in any way and have not been combined with other products are to be included in inventory. In commissary operations and central production facilities where goods are held for further distribution work in process (WIP) is to be included in inventory. WIP in commissary operations and central production facilities includes products removed from original packaging, altered, and/or combined with other products. Open items (i.e. broken seals) are excluded from inventory except for open liquor bottles (regulatory) and bulk dry good containers with gross weight over 10 lbs/5 kg. Leftovers, expired goods, spoiled goods and damaged goods are excluded from inventory. 1 OF 14

2 AF The company standard of inventory product usage is First In, First Out (FIFO) to ensure oldest inventory is used first. Physical Inventories must be taken on the cut-off date according to segment policy. To confirm your segment s Sales Cutoff Day, go to SodexoNet, and conduct a key word search on Financial Close Reminder. The sales cut-off day and inventory cut-off day must be the same. It is recommended that a District Manager observes the taking of a physical inventory at each of their units at least once each year. This observation is to be documented on the inventory record. Food and Vending Units Inventories at Food and Vending units are to be physically counted and reported to the Buffalo Service Center per the following segment frequencies. The inventory value at the end of the period/month is to be based on the current or most recent invoice price for each item inventoried. Segment Corporate Services Leisure Corporate Services Solutions Campus Services Hospitals Canada School Services Government Services Senior Services Vending Services Frequency Weekly Month End Note: Segment or Area Management may set a more frequent schedule for physical inventory, such as once per week. Facilities and Laundries Units Inventories at Facilities and Laundries units are to be physically counted and reported to the Buffalo Service Center per the following segment frequencies. The inventory value is based on the current or most recent invoice price for each item inventoried. Segment Frequency Corporate Services Leisure Quarterly (3, 6, 9 & 12) Corporate Service Solutions Quarterly (3, 6, 9 & 12) Education Facilities Hospitals Quarterly (3, 6, 9 & 12) Canada Quarterly (3, 6, 9 & 12) Laundries Facilities Inventory: Parts Quarterly (3, 6, 9 & 12) Senior Services Quarterly (3, 6, 9 & 12) Government Services Overhead Units Inventories at Indirect Units are to be physically counted and reported to the Buffalo Service Center on an annual basis. If the inventory is warehoused at a vendor s location, then the Sodexo Representative can request the physical count from the vendor and reconcile those counts with the 2 OF 14

3 AF Sodexo records for items on hand. Any discrepancies should be documented and corrected prior to reporting the balance. The inventory value is based on the current or most recent invoice price for each item inventoried. Units with a Perpetual Inventory System A perpetual inventory system is defined as a system that automatically updates the inventory quantities continuously after each purchase, sale or return of merchandise. The inventory value is based on the current or most recent invoice price for each item inventoried. A perpetual inventory system report is to be produced per the cut-off date according to segment policy. Each period, a random sample inventory test must be performed to provide evidence of the accuracy of the perpetual inventory system s report quantities. Refer to sample size given under the Standards Section of this topic (Item# 4 Perpetual Inventory System) Each period, the inventory value per the perpetual inventory system report must be reported through the UFS system and transmitted to the Buffalo Service Center. On a semi annual basis, 6 & 12, a complete physical inventory count must be performed and inventory value reported to the Buffalo Service Center. o Bookstore units will conduct two physical inventory counts, as defined below, during the fiscal year due to business book rush seasonality: 1st physical count will be conducted either 2 or 3 2nd physical count will be conducted either 6, 7, 8, 9 or 10 PURPOSE Inventory is the value of products and/or supplies stored to meet future needs. Why Manage and Record Inventory? To know what products are on hand. To calculate dollar value of such products. To accurately order food and supplies. To calculate product cost. Goals of Inventory Management The goal of inventory management is to provide an operation with an uninterrupted supply of necessary materials, to minimize storage time and avoid having excess quantities on site. Inventory quantity must be maintained at reasonable levels. The Inventory Analysis Report, #GLR001, is distributed each period to District Managers and Above STANDARDS Responsibilities All physical inventory duties will be formally assigned to a member of management who will be responsible for ensuring the inventory is performed in specific areas at specific times. In addition, value calculation responsibilities must be formally assigned and cross training accomplished so that more than one person can accurately perform the value calculation. Associated tasks such as purchase records must also be assigned. 3 OF 14

4 AF Segregation of Duties Segregation of the inventory function duties will ensure completeness and accuracy of inventory reporting. The following chart indicates the activities that are to be performed by different individuals. Employee Process Procedures A B C 1 Order new inventory X 1 Receive new inventory X SDX Mgmt DM 2 Perform physical inventory count X 2 Record physical inventory count on Count Sheets X **In small units where two individuals are not available to perform and record the physical 2 inventory counts, one individual can perform and record the count. **The receiver may participate in the two person count, but is not allowed to conduct a physical inventory count alone. 3 4 Enter the inventory counts from the Count Sheets into the Inventory Extension Tool Maintain and update Inventory System i.e. price updates, new items, size differences 5 Review Extension Report to the Count Sheets X X X 6 Enter ending inventory values into UFS, Inventory Summary X Process Procedures A B C Review and approve Inventory Summary to Extension Report to Count Sheets -- Approve electronically in The Market Connection 7 (TMC) 8 Reporting of inventory values to Buffalo X SDX Mgmt X DM 9 Observe inventory counts at least once a year X Unit should take all necessary steps to achieve the segregation of duties defined in the chart. For smaller units, segregation of duties may be achieved by: - arrange support with a neighboring unit - If Supervisor orders products, consider having the grill cook receive orders If a unit can not take necessary steps to achieve segregation of duties as defined in the chart, the District Manager is to review product cost trends and spot check received orders during his/her visits. 4 OF 14

5 AF Physical Storage Inventory items should be kept in a secured storeroom or storage area. Only authorized personnel are to have access to this area. Ensure stock rotation of supplies with the earliest expiration date is shelved in front of supplies with later dates, so the oldest supplies are used first (FIFO). Physically separate Company Owned Inventories from Client Owned Inventories. Do not commingle. Inventory Records Each unit s inventory records must provide documentation to support the completeness and accuracy of inventory reporting (the audit trail): 1. Physical Count Sheets 2. Inventory Item Extension Report - Inventory item pricing must reflect current or most recent available invoice price, minimum at period end ** Please note that for TMC Inventory Module users, this report will be held electronically 3. UFS Inventory Summary Report 4. UFS Transmission Report that shows evidence of successful Inventory module transmission. All inventory order and receiving systems used must contain the following four basic controls to be in compliance with Sodexo policy: CONTROL 1: CONTROL 2: CONTROL 3: CONTROL 4: CONTROL 5: The actual quantities from the Physical Count Sheets must agree to the quantities on the Inventory Extension Report. The item pricing on the Inventory Extension Report must reflect current or most recent invoice prices. The category summary totals from the Inventory Extension Report must agree to the UFS Inventory Summary Report. UFS Transmission Report shows successful transmission of Inventory Module. Approved TMC inventory amounts are locked down in the system. The Inventory Extension and Summary Reports can be printed on demand by the approver at any time. Any correcting adjustments between each of the controls above must be documented. The documents must provide a complete audit trail to recreate the final inventory reported value. Listed below are the available inventory tools to create a complete set of Inventory Records: 1. On-line Inventory Ordering Tool (**Preferred Tool**) Example: The Market Connection (TMC) for US units 5 OF 14

6 AF Provides automatic update of accurate item pricing for catalog items (items maintained via the online catalog in TMC) User is required to maintain current inventory item pricing for non-catalog items (items not automatically maintained by TMC), minimally at period end. Option 1 Maintain non-catalog items in tool Option 2 Maintain non-catalog items via a spreadsheet Note: If a spreadsheet is utilized to maintain non catalog inventory, the spreadsheet guidelines also apply (see #4 below). TMC will accurately calculate inventory extensions and inventory totals for both catalog and non-catalog items. Items are to be inventoried to the same general ledger account number as recorded on your unit transmittal. TMC database can be utilized for electronic storage of the Inventory Extension and TMC Summary Reports. Units are required to manually input inventory category totals into UFS via Inventory by Account Entry function. Units are required to print the UFS Inventory Summary Report. Upon completion, refer to the Record Retention section in this policy. 2. UFS Inventory by Item Functionality User is required to maintain current inventory item pricing for all items, minimum at period end. Items are to be inventoried to the same general ledger account number as recorded on your unit transmittal. UFS will calculate accurate inventory extensions. UFS inventory category totals from Inventory Extension are automatically transferred to the Inventory Summary. User is required to print the UFS Extension and Inventory Summary Reports. Upon completion, refer to the Record Retention section in this policy. 3. Food Management Software User is required to maintain current inventory item pricing for all items, minimum at period end. Items are to be inventoried to the same general ledger account number as recorded on your unit transmittal. Food Management software will calculate accurate inventory extensions User is required to print inventory extension and summary reports from the inventory tool. User is required to manually input inventory category totals into UFS via Inventory by Account Entry function. User is required to print the UFS Inventory Summary Report. Upon completion, refer to the Record Retention section in this policy. 4. Perpetual Inventory System User is required to maintain current inventory item pricing for all items, minimum at period end. Items are to be inventoried to the same general ledger account number as recorded on your unit transmittal. Perpetual Inventory System will calculate accurate inventory extensions. User is required to print inventory extension and summary reports from the inventory tool. 6 OF 14

7 AF Each period, perform a random sample inventory test of ending inventory quantities to provide evidence of the accuracy of the perpetual inventory system. Sample size must be 5 items, representing material inventory value. Items selected to sample each period, should vary from prior period s sample test. If sample test fails, a second random sample test of 10 items must be performed. If there are differences adjust the perpetual inventory system to match the physical count quantities to prevent carry forward of errors. If second sample test of 10 items fails, a complete physical inventory must be conducted. Sample tests must be documented and retained with inventory records. On a semi annual basis, 6 & 12, a complete physical inventory count must be performed. Bookstore units will conduct two physical inventory counts, as defined below, during the fiscal year due to business book rush seasonality: 1st physical count will be conducted either 2 or 3 2nd physical count will be conducted either 6, 7, 8, 9 or 10 User is required to manually input inventory category totals into UFS via Inventory by Account Entry function. User is required to print the UFS Inventory Summary Report. Upon completion, refer to the Record Retention section in this policy. 5. Spreadsheet (i.e. Excel) User is responsible to maintain spreadsheet controls (e.g. formulas and calculations) for each inventory item. Spreadsheet must be reviewed and validated annually. Implementation of Spread Sheet Control Inventory spreadsheets must have an independent review performed annually by a person other than the spreadsheet creator or user, to ensure spreadsheet is calculating correctly, AF Topic, , Spreadsheet Controls. User is required to maintain current inventory item pricing for all items, minimum at period end. Items are to be inventoried to the same general ledger account number as recorded on your unit transmittal. User is responsible to ensure inventory extension formulas are correct User is required to print inventory extension and summary reports from the spreadsheet. User is required to manually input inventory category totals into UFS via Inventory by Account Entry function. User is required to print the UFS Inventory Summary Report. Upon completion, refer to the Record Retention section in this policy. 6. Manual Inventory Week Record (Form 118*) *Available from SodexoNet s Forms & Manuals Center Disaster Recovery method User is required to manually maintain current inventory item pricing for all items, minimum at period end. User is responsible to manually calculate each item s inventory extension. User is responsible to manually calculate the inventory category totals. Items are to be inventoried to the same general ledger account number as recorded on your unit transmittal. 7 OF 14

8 AF User is required to manually input inventory category totals into UFS via Inventory by Account Entry function. User is required to print the UFS Inventory Summary Report. Upon completion, refer to the Record Retention section in this policy. Universities and Schools It is a requirement that a DM observe the taking of a physical inventory at each of their units at least once every 12 months, (except in cases where the DM oversees more than 12 units and will extend to 18 months). This observation is to be documented by signature on the inventory record. Upon client visits, the DM is responsible for checking inventory extensions to validate the process and document such by signature on the inventory records. GMs/DMs are to utilize E=Vision on a go-forward basis which flags various inventory metrics and responses are to be recorded via the E=Business Review (E=BR) process. o Communicate to your E=BR change champion (Monica Snowden, Universities and Chris Reiter, Schools) any issues or potential improvements you identify in E=Vision to insure all metrics are included that will assist in proper inventory management. Each Finance Director will be responsible to perform a minimum of 10 spot reviews each month in their respective territories. This will be included as part of their annual accountability expectations. Counting Inventory A complete physical inventory count must be performed on the cut-off date according to segment policy. For consistency, create a standard schedule that will ensure all storage areas are physically counted on that day. Create a count sheet for each storage location. Sequence the inventory items on the count sheet to mirror the layout of the storage area to expedite the taking of the physical inventory along with helping to ensure accuracy. Use a new count sheet for each physical count to prevent copying counts from the previous count performed or estimating rather than taking an actual physical inventory count. A new count sheet also ensures the prior counts are not accessible to the Counter or Writer. Perform the inventory count from shelf to sheet, top to bottom, left to right. Visually inspect inside open cases. At the end of counting, review any items listed on the Count Sheet that do not have a count recorded. Enter a Zero or a dash (-) next to each item with no inventory on hand. This will provide complete and accurate inventory counts performed by unit personnel. Inventory is to be counted to item level in the same unit sizes as identified on the physical count sheet. Make note of changes on the physical count sheet, such as change of location sequence, unit of measurement, i.e. gallons, #10 cans, etc. Update the information on the inventory tool, as needed. ** Please note that for TMC Inventory Module users, partial cases must be entered by a percentage of case remaining and not by weight. A two person count team must be used: one "counter" and one "writer". The writer is to verify counts. Both the counter and writer are to sign the count sheet as evidence of performing the task. Note: In small units where two individuals are not available for the physical inventory count process, 8 OF 14

9 AF one individual can perform the count and record the inventory count. The receiver may participate in the two person count, but is not allowed to conduct a physical inventory count alone. Upon completion of counting the inventory, both the counter and writer are to sign and date the first page of the count sheets. Their signatures provide evidence who counted the inventory for accountability, as well as the date of when the inventory count was performed. Food & Operating Supplies Examples of Items TO Inventory: Unopened items, e.g. cases, boxes, #10 cans, cleaning and paper supplies, frozen entrée, sealed bag of cookies or dough Unopened perishable items e.g. fresh baked goods, milk, produce, spices, seasoning, fresh fruit, vegetables Individually sealed items, e.g. bottles of water, soda, dried fruits, muffins, pastries, individual bags of salty snacks, an unopened sleeve of cups or plates Unopened prepared goods from vendors, e.g. Frozen Soups Items removed from the original packages that have not been altered in any way and have not been combined with other products, e.g. a whole turkey defrosting, an entire bag of chicken defrosting Open bulk dry good containers/bags greater than 10 lbs/5 kg., e.g. flour, sugar, pasta, baking supplies Examples of Items NOT to Inventory: Individual open items with broken seals. These items are not factory sealed, e.g. open package (fresh or frozen) of: cookies or dough, bagels, vegetables, produce, deli meats, cheese, spices, baking supplies, salt & pepper shakers in prep or service area, bag in box Items removed from the original packages that have been altered or combined with other products, e.g. meats marinating, sliced deli cheese or meats Open case of individual portion condiments, e.g. PC packets of ketchup, mustard, relish, mayo, salt, pepper, sugar Open bag of frozen meats not individually wrapped, e.g. hot dogs, patties Open bulk dry good containers/bags with weight less than 10 lbs or 5 kg. Open operating supply items (i.e. broken seals), e.g. sleeve of cups, bowls, plates, lids, coffee filters, aluminum foil, wraps, gloves, napkins, liquid soap, detergents Deposit costs, e.g. can, bottle, container, keg Leftovers Expired goods Spoiled goods Damaged goods Liquor Bar inventories such as liquor must be controlled. Access to the liquor room must be restricted to management personnel or designee only. Establish and document (in inventory records) par stocks for each liquor brand carried at the bar. Opened liquor bottles are to be inventoried by tenths of a bottle. 9 OF 14

10 AF Liquor inventory is to be documented before and after each Cash Bar function, to determine usage and calculate revenue. Use an "empty for full" requisition system for replenishing the bar. At the end of each night, the bartender is to place all empty bottles in an empty liquor box and prepare a requisition sheet to order the necessary items to replenish liquor stocks, beer and supplies. Each morning the requisitioned order is to be filled and placed behind the bar. Empty bottles are to be destroyed. The completed requisition is then forwarded to the office for posting to the perpetual inventory. Vending Vending inventory may consist of the following areas: Product in Vending Machines Product in Trucks Storage Rooms on Site Product in Warehouses Each unit s vending inventory records must provide documentation to support the completeness and accuracy of inventory reporting (the audit trail): 1. Each Vending Machines Ending Inventory Value (UFS Asset Inventory Report) 2. Physical Count Sheets of Route Trucks, Storage Rooms on Site and Warehouses 3. Inventory Item Extension Reports of Route Trucks, Storage Rooms on Site and Warehouses Note: User enters only non-machine (i.e. route trucks, storage rooms on site and warehouse) ending inventory category totals into UFS via Inventory by Account Entry Function. UFS will automatically calculate and report ending inventory of vending machines. 4. UFS Inventory Summary Report Note: UFS Inventory Summary Report will include both vending machine and non-machine ending inventory. 5. UFS Transmission Report that shows evidence of successful UFS transmission of Inventory module. CONTROL 1: CONTROL 2: CONTROL 3: CONTROL 4: The actual quantities from the Physical Count Sheets must agree to the quantities on the Inventory Extension Report for Route Trucks, Storage Rooms on Site and Warehouse. The item pricing on the Inventory Extension Report must reflect current or most recent invoice prices. The category summary totals from the UFS Asset Inventory Report (vending machine ending inventory) and category summary totals from the Inventory Extension Inventory Report (i.e. route trucks, storage rooms on site and warehouses) must agree to the UFS Inventory Summary Report. USF Transmission Report shows successful transmission of Inventory Module. Any correcting adjustments between each of the controls above must be documented. The documents must provide a complete audit trail to recreate the final inventory reported value. 10 OF 14

11 AF Facilities Examples of Items TO Inventory: Items in central warehouse or large store room, where the individual item is sealed and unused, such as cleaning supplies, new mops, shampoo, polish, toilet bowl cleaner, etc. Paper supplies Grounds keeping supplies (fertilizer, sod, nozzles, clamps, sprinklers, etc.) Plant operations supplies (work order repair parts). Open bulk bags/containers of dry goods with weight greater than 10 lbs/5 kg (chemicals, fertilizer, grass seed, herbicides) Examples of Items NOT to Inventory: Open bulk bags/containers of dry goods less than 10 lbs/5 kg of chemicals, fertilizer, grass seed, herbicides Open cases of paper towels, scour pads, light bulbs, air filters, or other items not sold to Sodexo by individual item/price Items in use, including items in a custodial closet or custodial cart or patient room, such as mops, supply caddies, vacuum bags, etc. Opened first aid kits and supplies Fixed Assets (capital equipment) Laundries Examples of Items TO Inventory: Laundry items (laundry bags, linens, spare parts for laundry machines, etc.) Open bulk bags/containers of dry goods with gross weight greater than 10 lbs/5 kg of detergent, softener, chemicals Examples of Items NOT to Inventory: Open bulk bags/containers of dry goods with gross weight less than 10 lbs/5 kg of detergent, softener, chemicals Open case of an item not sold to Sodexo by individual item/price Fixed Assets (capital equipment) Used or refurbished parts (items which have had repairs done on them) ACCOUNT FOR VENDOR DELIVERIES THROUGH YOUR INVENTORY CUT OFF DAY Outside vendor deliveries received through your inventory cut off day are to be included as inventory: 1. Include the deliveries in the inventory count. 2. Ensure that the expense is recorded in current period 3. Process the invoice in the current period as usual 4. If invoice was not received, contact your Operations Accountant to write accrual journal entry to record expense in the appropriate period per AF Topic OF 14

12 AF HANDLING OF DAYPART INVENTORY A daypart refers to how a unit defines their sales day cut-off. The daypart cut-off for inventory must agree with the sales day cut-off. For example, in Health Care a unit defines their sales day as 8 PM on Day 1 to 8 PM on Day At period end, ending inventory is to reflect the value as of 8 PM of the sales cut-off. 2. Any inventory for activity after 8 PM must be included in the period end ending inventory value. REPORTING OF INVENTORY Food and Vending Inventory items using the same general ledger account number as purchased (recorded on the Unit - Transmittal e.g. food, merchandise, supplies, etc.). Note: Check with your Operations Accountant for inventory account numbers not listed on the Inventory Summary form. 1. Enter category totals from inventory records into UFS. 2. Transmit ending inventory per policy. 3. Ensure successful transmission of Inventory module appears on UFS Transmission Report. Facilities and Laundries Inventory items using the same general ledger account number as purchased (recorded on the Unit Transmittal e.g. cleaning and paper supplies, etc.). Note: Check with your Operations Accountant for inventory account numbers not listed on these Inventory Summary forms. 1. Inventory Summary is either entered and transmitted via UFS or ed to the Operations Accountant to record ending inventory per policy. 2. If Inventory Summary was transmitted via UFS, ensure successful transmission of Inventory module appears on UFS Transmission Report. Reminder: The controls listed in Inventory Records must be adhered to for complete and accurate inventory reporting. RECORD RETENTION Upon completion, inventory records become the official accounting documentation that must be retained in the unit for 2 years. Inventory records need to contain: end date Unit Number Unit Name. The following Inventory Records must be retained (together as an inventory packet): Physical Count Sheets signed and dated by both the Counter and Writer to provide evidence who counted the inventory and when the count was performed. Inventory Extension Report & Inventory Tool s Summary Report (*** Please note that these reports will be held electronically in TMC Inventory Module and will not need to be printed if using this tool) For perpetual inventory system units, include sample testing documentation. For units with vending, include the UFS Asset Inventory Report (Vending Machines) UFS Inventory Summary Report, signed and dated by the Unit Manager as evidence: 1. The physical count sheets reflect actual inventory on hand 12 OF 14

13 AF The counts on the physical count sheets agree to the inventory extension report, which agree to the Inventory Summary. UFS Transmission Report shows successful transmission of Inventory Module. Any correcting adjustments between each of the controls above must be documented. The documents must provide a complete audit trail to recreate the final inventory reported value. REPORTING LOSSES OR WRITE-OFFS All losses or write-offs resulting from a theft, equipment failure or a power failure which results in inventory loss must be reported immediately to the District Manager. The Unit Manager is responsible to prepare and submit a Loss/Shortage Report (See AF Topic for details) to their District Manager and Area Finance. District Managers are to review, approve and distribute the report as per the form instructions. ** SEE HIGH LEVEL VIEW OF FOOD INVENTORY PROCESS ON NEXT. ** 13 OF 14

14 AF HIGH LEVEL VIEW FOOD INVENTORY PROCESS 14 OF 14