www.iltsa.co.uk StockAuditor THE MAGAZINE FOR THE INSTITUTE OF LICENSED TRADE STOCK AUDITORS ISSUE 84 August 2009 ISSN 1471 - 0471 Next Training Course :- October 2009 - Ribble Valley Members Brochure Members Brochure 2009 / 10 2009 / 10 Included with this ‘Stock Auditor‘ is a copy of the current brochure, listing all our qualified members. This is currently circulating around breweries, pub companies, accountants, trade bodies and the licensed trade. If you know anyone who would appreciate a copy please contact the office on 01422 833003 or email me [email protected]Latest news on the requirements of MLR Following an informative meeting with HMRC, more information has come to light of your obligations under these regulations Page 4 & 5 BEC report on Pub Companies What will be the outcome of this report for your clients ? Page 6 & 7 New generation of Britain’s brewers Trevor Knight continues his travels around the country, this month he visits North Yorkshire Page 8 & 9
Transcript
www.iltsa.co.ukStockAuditorTHE MAGAZINE FOR THE INSTITUTE OF LICENSED TRADE STOCK AUDITORS ISSUE 84 August 2009
ISSN 1471 - 0471
Next Training Course :- October 2009 - Ribble Valley
Members BrochureMembers Brochure2009 / 102009 / 10
Included with this ‘Stock Auditor‘ is a copy of thecurrent brochure, listing all our qualified members. This is currently circulating around breweries, pubcompanies, accountants, trade bodies and thelicensed trade.
If you know anyone who would appreciate a copyplease contact the office on
Following an informative meetingwith HMRC, more information has
come to light of your obligationsunder these regulations
Page 4 & 5
BEC report on PubCompanies
What will be the outcome of thisreport for your clients ?
Page 6 & 7
New generation ofBritain’s brewers
Trevor Knight continues histravels around the country, thismonth he visits North Yorkshire
Page 8 & 9
STOCKAUDITOR2
This magazine is published by the Institute of Licensed Trade Stock Auditors. Whilst welcoming any contributions, the editorreserves the right to alter or amend them if necessary.
Any opinions expressed are not necessarily those of the Council and are accepted only on that understanding. No part of this magazine may be reproduced or transmitted without written permission of the publishers.
Printed by :- Pickles Printers, Halifax, West Yorkshire 01422 353239All Subsciptions payable in advance. Published 6 times per year post free Annual Subscription £24.00
Many thanks to the members andothers who have made this issuepossible:- Gordon Andrews, Rita Broadbent, ,Greyeye Technology, Le Chef, TrevorKnight, and Stockcheck.Thanks also to Peter Hodgson, RitaBroadbent and Amy Swift for proofreading this issue.
Deadline for the October issue is 19thSeptember 2009.
Price ListsI am looking for up to date pricelists for major suppliers to poston the website - I need generallists rather than client specificlists.Please send, scan or copy to
I was determined that this issuewould be brought out on time andsubject to last minute problemswith the printer or post, that hasbeen achieved. The long awaitedmeeting with HMRC finallyhappened in July but I do feel thatthey are perhaps beginning torealise that there is little need forus to be registered. HoweverHMRC cannot make that decisionand I would suggest that if youALL were to write a letter such asthat reproduced on page 15 toyour MP we may force theTreasury to re-look at oursituation. Details of the proposedMandatory code for sellingalcohol and changes to theNational Minimum Wage are alsoincluded in this issue.
The recent BEC report is verydetailed and originally I thought itwould be a simple matter to carryout a resume of the report. Thatarticle will be concluded in thenext issue as the more I startedreading the report and evidence, Ifound there was much to report.
All our regulars are here, TrevorKnight continues his travelsaround the country. In this issuehe visits North Yorkshire. RitaBroadbent concludes her series ofarticles on food costing software.Le chef gives us another of hisquick recipes for you to try.
Any Associate members out thereplease do make a note of theexamination dates – they are to beheld in Lancashire on ThursdayOctober 22nd with the Refresherday on the 21st.
Thanks to everyone who hascontributed in any way to thismagazine.
The re-introduction of the 125mlwineglass is, I hear, not gettingthe backing of local councils orthe police. This mandatory codeworking its way slowly throughthe parliamentary system seeks toset out rules to curb irresponsibleretailing. Taking the size of glassinto account is just one point but italso includes a clampdown on thepromotional selling of alcohol.Not so long ago the 125ml glasswas the norm. Now it may belonger ago than I thought but thesmaller wine glass and the 1/6th ofa gill spirit measure, meant that toget as drunk as youngsters donowadays, you were spending alot of time going up to the bar andtherefore a lot less time drinking.
Size is one thing, but surely this problem also lies with the supermarkets. I haveread about the initiative of ‘Smarter Drinking’ that some of these retailers aregoing to roll out in September of this year but will it stop the problem? To havea campaign that will cost £100m to stop alcohol abuse…well I feel that theproblem is not just that they can buy cheap booze but it goes a lot deeper thanthat. Did any one see the TV programme the other day on ‘Respect’? Ithighlighted the fact that some youngsters have very little or no respect forother people or for property. To start stoning the firemen or any of theemergency services when they are only there to help, is just so wrong.
This is, I am afraid to say, the way that Britain is going. If a high number of theyoungsters have very little or no respect for others, they also
have no respect for themselves. However, if allsupermarkets stopped selling alcoholtomorrow, these youngsters may start to drinkother more harmful substances. They mayeven start to hit the drug scene. So to atleast make the supermarkets stopdiscounting alcoholic drink across theboard would be a start! Another point is
that years ago it was only the pubs orthe off-licence outlets that sold
alcohol and in each casethe licensee was the
person who sold you thedrink not a person on a till in a
hurry to clear a queue ofshoppers.
I do wonder what is going tohappen in another twentyyears time?
ViewFromTheChair
Taking Stock BooksGoods Received BooksBar Requisition Books
Any member, with the requiredseven years full membership, canapply for fellowship. Pleasecontact the Secretary for details.Any applications will then beplaced on the agenda for theNovember Council Meeting.
October 21st Refresher Day
“ 22nd Examination
“ 23rd Training Course
November 20th Council meeting
Trevor
STOCKAUDITOR4
MoneyLaunderingRegulations Chris Swift F.I.L.S.A.
Council requested a meeting withHMRC for guidance on theimplications and implementationof the Money LaunderingRegulations ( MLR ). Theguidelines that are available arefor Accontancy Service Providers( ASPs ) and give little relevantinformation for our members.
A meeting with Paul Needham andStuart Bain from the MLR policyteam was organised in mid July.Although the primary reason forthe meeting was to agree howbest the MLR regulations could beimplemented, it was questionedagain why stock auditors had tobe included. HMRC are ourdesignated supervisory body, butdo not have the remit to excludeus from the regulations. They didagree that it appeared in manycases that we were duplicatingchecks already carried out bybanks, accountants, solicitors,utility companies, suppliers, localauthorites and police to name buta few. It was pointed out howeverthat our members may well beable to identify trading patternsand irregularities that should bereported to Serious OrganisedCrime Agency ( SOCA ).
HMRC were asked exactly howmany stock auditors hadregistered and what action hadbeen taken against auditors whohad not yet registered. Becausethe registration form does not
differentiate it would not bepossible to answer the firstpart. With regard to non-registration, at the momentthere was a policy ofeducating and informing,but this was shortly tochange to enforcement.Please note that the penalties fornon-registration are very severeand include unlimited fines.
Once registered, what do wehave to do to comply with theregulations ?
First of all we have to maintain arecord of CUSTOMER DUECUSTOMER DUEDILIGENCEDILIGENCE checks that havebeen carried out. This isnecessary to ensure that thebeneficial owner of the business isclearly identified. It is recognisedthat many of us have knownclients for many years andperhaps it could be embarrassingto ask for identification. In suchcases, sight of utility bills or bankstatements in their personalidentity would suffice, but should
be recorded as the means ofproving identity. A much betterway would be to record thepersonal licence details that arenow mandatory for licensees andare usually available behind thebar.
In changeover situations it isthought that, as it is a one off visit,it would be unreasonable to askfor proof of identity as there wouldhave been many checks carriedout prior to the changeover.Obviously, if the client turns upwith a carrier bag full of cashthere should be a rush of peoplewishing to report the matter. If,however, the client asks you tocarry out further audits then theywould have to be treated as a newclient and the required checks
MoneyMoneyLaunderingLaundering
What is Money Laundering ?( Taken from the SOCA website )
Money laundering is any action taken to conceal, arrange, use orpossess the proceeds of any criminal conduct. Criminals try tolaunder ‘dirty money’ in an attempt to make it look ‘clean’ in order tobe able to use the proceeds without detection and to put them beyondthe reach of law enforcement and taxation agencies.
MoneyLaunderingRegulations
STOCKAUDITOR 5
carried out. Whateverdocumentation you use it must beclearly recorded so that you canprove that you have acted withdue diligence.
The check must clearly identifythe beneficial owner of thebusiness. In the case of limitedcompanies such a check shouldinclude the full name of thecompany and the registered number and country ofregistration. Either make a copyof the certificate of registration orconduct a company search. Notethat separate checks have to becarried out for any owner whoowns more than 25% of thebusiness.
Clubs are a particular problem,but in the case of bona-fidemembers club’s where the club isrun by an elected committee it isdeemed that the business isowned by each of the membersand the identity check does notneed to be carried out. Goodpractice would be to record theclub’s incorporation number.Proprietary clubs on the otherhand are treated as any otherbusiness and the full check mustbe carried out on the owner.
Risk AssessmentRisk Assessment
By their very nature most pubsand restaurants are high risk inthat there are a large number ofcash transactions carried out.Hotels are less so, but eachlocation should be looked at froma risk assessment basis.
Location could be a factor – innercity, estate pub, red light area etc.as could the owner’s status. Theidea is that you yourself are ableto identify units that may carry a
higher risk of involvement in ML.
There are no set situations thatshould trigger a response but youare looking perhaps for:-
�Substantial differences between till reports and recorded takings
�Large amounts of transfers
�Unusually large surplus or deficit
�Indifference to reports
�No commercial sense
�Unsuitable suppliers – no proper documentation
Obviously some of the above mayjust be down to poor businesspractices but should you have anydoubts you should complete aSuspicious Activity Report.
Suspicious events such as thoseabove can be reported by using aSuspicious Activity Report (SAR)which can be filled in online onthe SOCA website. For advicevisit their websitewww.soca.gov.uk and go to thefrequently asked questions (FAQs ).
If you have not adhered to theMLR regulations ( or cannot offerrecords that prove you have ) thenyou may be implicated if one ofyour clients is subsequentlyproved to have been involved inmoney laundering. Please notethat all records must be kept for aminimum of five years.
For members employing staff, youmust appoint a nominated officerwho must ensure that adequaterecords are kept and that all staff
are aware of their commitmentsand that procedures must beadhered to.
It may be that you will be visitedby HMRC to see if you arecomplying with the regulations.They will be looking at
�Your anti-money launderingpolicies and procedures
�Risk assessment for eachclient
�Copies of customer identitychecks
�Staff anti-money launderingtraining manuals
�Copies of any SARs submitted.
Please note that the annualregistration fee has nowincreased to £ 120 from June 2009.
I also took the opportunity to pointout that there is no legalrequirement for any business tocarry out stock auditing – withoutsuch legislation any potentialmoney launderer would either notbother with stocktakes at all ormerely seek a stocktaker that isnot registered – surely a largeloophole in the law !
If you have any further questions aboutthe MLR regulations please contactthe ILTSA office, if we do not have theanswer we will endeavour to haveyour questions answered by referringto HMRC. If you do not agree with the MLRregulations do not blame us or HMRC,instead write to your local MP askingthat the regulations are revised. I havereproduced a letter from one of ourmembers that I feel sums up thesituation – whilst I am not advocatingcopying it in its entirety it does makesome valid points which you may findof use.
See page 15
£10,000 ends upwith less than£300 – somethingis obviously verywrong !
The Committeewere alsoconcerned thatthere did not appear to be muchtransparency as to how the rent wascalculated, something that thePubCos had been asked to addressway back in 2004. When rents werequeried it triggered an expensiveappeals process that many licenseessimply could not afford. The PubCosargue that the cost of the beer tie isoffset by the support that they givelessees.
Until 1989, most public houses wereowned by breweries, in particular the‘big six’, ( Scottish & Newcastle,Bass, Courage. Watney Mann, AlliedBreweries and Whitbread ) whorented out their pubs to tenants whowere tied to that brewery’s products.In the main, rents were much lowerand the difference between tied andfree trade prices was marginal. Thesmall discount offered to free tradeaccounts was said to offset the factthat the brewery was not responsiblefor repairs. The ‘beer order’stipulated that no brewery shouldown more than 2,000 tied houses.From this the vast PubCos were
BECReport
STOCKAUDITOR6
BEC Report onBEC Report onPub CompaniesPub CompaniesThe long awaited report from theBusiness and Enterprise Committeeon pub companies was published inMay 2009. With over 300 pages ofsubmitted evidence it makesinteresting reading.
The committee were especiallyinterested in companies operating‘tied’ estates where in addition to renta further ‘wet rent’ is applied byforcing the licensee to buy fromnominated suppliers at prices oftenmuch higher than they could obtainelsewhere. I am against the term‘wet rent’ as it implies some sort oflegitimacy to the practice. As therents are already assessed at ‘marketrent’ the tie in particular is said tocontribute to the ever growing list ofbusiness failures within the licensedtrade.
The Trade & Industry Committee lastlooked at this issue in 2004 and partof the remit of the new enquiry wasto examine how many of the 2004proposals had been implemented.There will always be disputesbetween landlord and tenants but thecommittee were struck by theconsistency of the evidencesubmitted by lessees. Because ofthis the committee commissionedtheir own survey of 1000 tied housesselected by CGA as giving a balancedpicture. The results were staggering– 78% of the lessees contactedexpressed dissatisfaction with theirpub company and 67% ofrespondents reported that theyearned less than £15,000 per year.More worryingly 50% of pubsreporting a turnover of £500,000 ormore still failed to make more than£15,000. Broken down into weeklyturnover a landlord turning over
created to fill the void as brewerssold off most of their estates. Smallerregional brewers also grew as morepublic houses came onto the market.
The Trade & Industry Committee in2004 made the followingrecommendations:-
�Pubcos should allow their tenantsmore flexibility in the choice of productsthat they sell allowing small brewers toparticipate in the market.�There was a need for an inexpensiveand efficient system of arbitration oralternative dispute resolution�Pubcos should advise their tenants ofthe average discount they receive whenpurchasing beer from the breweries, howthis compares to the free marketdiscounts and how much of this discountis passed onto the tenants.�The AWP tie should be removed�There should be clear guidelines forthe rental valuation process and thetenant should be provided with acomprehensive breakdown of how theirrent has been calculated.�The profit assessment should form anaddendum to leases, with anysubsequent review, to ensuretransparency.�Upward only rent review clausesshould be removed from leases and thereshould be a nation-wide register of rentreviews.�Pubcos should support their tenants inattending training courses�Pubcos should reconsider policy onmarketing fees.
Pub Type No of outlets
Freehouses 17,200
Lease/ Tenant 30,800
Managed 9,000
Source: BEC Report - BBPA
BECReport
STOCKAUDITOR 7
New Council MemberBrett Websdale
I have found it a great privilege tohave been elected to Council at thelast AGM. My aim is to add to thehard work and commitment thecurrent Council members put in aswell as past members like GeorgeGiles and Rita Broadbent. TheChairman has asked me to look athelping to increase sales of thenewly updated “Taking Stock”book.
I purchased the original bookover 20 years ago and found it avaluable source of referencewhen I started stocktaking andalso when taking my HCIMAexams. I have found the updatedbook to be a valuable tool as I useit as a point of reference, whenneeded, on my stocktaking jobs aswell as helping to clarify/explainanswers I have given to clients.
I am looking forward to my time onthe Council and hope I can help theInstitute in any way possible.
What was immediately evident to the2009 committee was how little of the2004 proposals had beenimplemented, although the pubcosdid emphasise the progress that theyconsidered they had made.
Licensee perceptions on why theywere struggling meant that 41%stated that the price of goods andrents paid to the pubcos were themain cause. Other causes were thesmoking ban, the cost of licensingreform and supermarket pricing.
Raw data collected from the BBPAimplied that, in fact, 55% of pubclosures were in freehold premises,12% managed houses and 33% inleased / tenanted units. However,lessees stated that these figures didnot take into account the number oftied public houses ‘churned’ by thepubcos. Churning is where pubs areshut because the licensee handsback the keys or goes bankrupt andthe pub is reopened by anotherlessee within a short period. It isalleged that some units have beenchurned several times in the last fewyears.
The committee took far longer thananticipated to come to a conclusionlargely due to the large amount ofevidence that was submitted. Manystories of hardship emerged andmembers of the committee wereimpressed by the verifiable evidencesubmitted by lessees but “lessimpressed with the evidenceprovided by Mr Tuppen, Mr Townsendand Mr Thorley whose evidence on
close inspection was found to give apartial picture and in one case waspositively false”.
The beer tie is the main item ofcontention, but by no means the onlyone. The larger pubcos can demanddiscounts of up to £250 per brewersbarrel but the most that an Enterpriselessee can receive is a discount of£ 42.12 and only then if over 500barrels are sold. The pubcos withtheir vast buying power should be ina position to demand large discounts(which they do) and pass a proportionback to the lessees ( which theydon’t). Done properly it would negate‘buying out’ as there would be nofinancial advantage to the lessee withfurther savings made on systemssuch as provided by Brulines. At themoment it is extremely misleading forpubcos to promote to potentiallessees that there is any benefit fromthe pubcos buying power becauseany savings are rarely passed on.
High rents were another contentiousissue as often goodwill and structuralalterations by the lessee were nottaken into account. The very methodthat rents are calculated by is alsosubject to much argument as are thedilapidations when leases areassigned. The pubcos appraise theFMP – the fair maintainable profit –and set the rent accordingly. This isbased on the profit that a ‘reasonablyefficient operator’ might be expectedto generate and not by the squarefootage or the actual turnover of theunit. Such a system is bound toinfuriate lessees especially as thisfigure does not appear to have beendowngraded to take into accountsuch considerations as the fallingmarket or indeed the smoking ban.There is also disparity as to whatproportion of turnover should beapportioned to costs of running thebusiness, again critical to setting afair and sustainable rent. Manylessees seem convinced that thepubco came up with a proposed rentleaving plenty of room to drop downto the rent they actually wanted.
Many more complained of notransparency on how the rent wasset and being bullied into signing fora new lease.
In the October issue of the ‘StockAuditor’ we will look at what thecommittee heard about:-Enforcing the tieAmusement with prizes incomeInsuranceBenefits of the pubco tied model andConclusions and recommendations of theBEC committee.
No. of Outlets
Enterprise Inns 7,581
Punch Taverns 7,287
Admiral Taverns 2,386
Marston’s 1,932
Greene King 1,428
SNPE 1,205
Wellington 1,028
Source CGA BEC Report
TheNewGeneration Trevor Knight F.I.L.S.A.
STOCKAUDITOR8
The New GenerationThe New GenerationPart 34 - North Yorkshire
the Watch - dating back morethan 1,000 years and used toannounce that the city was then inthe Wakeman’s care for the night.
The fates had not been lookingfavourably on Nick Stafford as,within seven months, in the worstrecession since World War II, hehad twice been made redundant -once from his post as a HeadTeacher and then from his newlyfound job in computing.Undaunted and always a keenamateur brewer, Nick decided ona completely new venture and setup NICK STAFFORD HAMBLETONALES in March 1991. His firstbrewery was housed in aconverted outbuilding at the homeof his in-laws in Holme-on-Swale.Despite a severe shortage of fundsthe brewery was successful withina comparatively short time and in1994 moved to new premises at
Trevor Knight continues hisjourney in search of the NewGeneration of Britain’s Brewers
My travels through England’slargest county are coming to anend. One of the country’s greathighways divides the county fromDerbyshire in the south to Durhamin the north. The Romans builtThe Great North Road ( we know itless grandly as the A1! ) fromLondon to Edinburgh nearly 2,000years ago. My last two Yorkshirebreweries are convenientlylocated near this great highway.
In the south of the county lies thehistoric town of Ripon - itssplendid cathedral retains featuresfrom every period of Englishchurch-building including a 13th
century west front and a grand 16th
century Gothic nave. Everyevening in the Market Square at 9p.m. the city Wakeman blows hishorn - a custom known as Setting
the opposite end of this hamlet oftwelve houses. New breweryequipment was installed in 2000,doubling capacity to 100 barrels aweek, while a bottling line catersfor micros and larger brewers,handling more than 20 brands.
In February 2005 the first everBritish-brewed gluten and wheatfree ale was launched andsecured strong support fromcustomers and retailers. The beerwas developed in response togrowing consumer awareness ofintolerance to some food and drinkingredients. Gluten, found inwheat and barley, can preventvitamins and nutrients beingabsorbed in the body and some750,000 people in the U.K. sufferfrom gluten intolerance. Thisbrewing innovation is extremelyprecise and time consuming withrecipes developed to ensure theyare free from contamination fromthe brewery’s usual ingredients.
BITTER (abv.3.8%) A golden bitter witha good balance of malty and refreshingcitrus notes leading to a mellow, tangyfinish.
STALLION (abv.4.2%) A premiumbitter, moderately hoppy throughoutand richly balanced in malt and fruit,developing a sound and robustbitterness with earthy hops drying theaftertaste.
STUD (abv.4.3%) A strongly bitterbeer with rich hop and fruit. It endsdry and spicy.
STOCKAUDITOR 9
TheNewGenerationSpecific new methods ofmaturation and filtration are alsorequired to allow the passage offull flavour and taste to reach theconsumer in the bottle.
Expansion of the brewery in 2005resulted in relocation to largerpremises in view of the famousWhite Horse on the HambletonHills - the company logo. Legendhas it that in 1857 one ThomasTaylor wanted to mark hisbirthplace on the Hills and thirtylocal men and six tons of limewere used to mark out the horse.
The business is dedicated toemploying local people, 15 arenow employed and wheneverpossible the brewery uses locallyproduced ingredients - Nick’smalted barley is purchased fromFawcetts of Castleford. Morethan 100 outlets are suppliedthroughout Yorkshire and theNorth-East. Five core brands areproduced plus a special breweach month and beers are brewedunder contract for the VillageBrewer. Over recent years Nickhas been a leading light in SIBA
Gateway to the moors and one ofthe oldest market towns in Britain,Pickering was founded in about270BC by the Celtic KingPeredurus. Legend has it that theKing lost a ring in the river and thatit was eventually found in the bellyof a pike. The town’s name is saidto be based on this incident and itscoat of arms includes a pike with aring in its mouth. At the heart ofthe town is the 12th century church,its walls decorated with 500 yearold wall paintings, one of whichportrays St. George and theDragon. The 12th century castle,now a ruin was frequently used asa hunting lodge by medieval kings.Among the many old inns in the
town is the Black Swan whichused to stage plays and cockfightsin its yard.
A few miles north of Pickering, onthe very edge of the North YorkMoors National Park, lies thevillage of Cropton where beer hasbeen brewed since 1613. Theseearly brews were often illegal andwrongdoers were sent to Yorkgaol. Local women, known as AleWives, helped in the production ofthe early beers and were roundlycursed if they produced a badbrew.
The continuation of the ancientcraft of brewing was revived in1984 when CROPTON BREWERYwas established with a five barrelplant in the converted cellars ofthe New Inn. The first brew of thenew venture “Two Pints” wassuch a resounding success withcustomers that extra beer wasproduced to supply demand fromfurther afield.
The cellar brewery thrived and in1988 it was extended. In 1994 anew purpose built brewery wasestablished at Woolcroft on thefarm land behind the New Inn.Within a year production haddoubled and the breweryintroduced its first bottleconditioned beer. In 2006 a brandnew state of the art brewery witha capacity of 100 barrels a weekwas opened.
Cropton beer is brewed in thetraditional way and a wide andvaried range is produced witheach beer having its owncharacter.
Join me in the coming months as Icomplete this series in the NorthEast of England.
TWO PINTS (abv.4%)A good full-bodied bitter. Malt flavoursinitially dominate with a touch ofcaramel, but the balancing hoppinessand residual sweetness come through.
YORKSHIRE MOORS BITTER(abv.4.6%)A fine ruby beer brewer with Fugglesand Progress hops. A hoppy beerwith a fruity aftertaste.
MONKMANS SLAUGHTER (abv.6%)Rich tasting and warming, fruit andmalt in the aroma and taste, with darkchocolate, caramel and autumn fruitnotes. Subtle bitterness continuesinto the aftertaste.
My sincere thanks to bothbreweries for their help.
STOCKAUDITOR10
MasterClass Rita Broadbent F.I.L.S.A
Is it worth it ?Is it worth it ?Food costing by computer - part 3
I started this work for the hotel inFebruary of this year and I am stillworking there approximately three tofour days a month. They are shortdays i.e. six hours mostly. I am stillcreating new dishes, up-dating costprices and producing the monthlystock sheets. I also produce amonthly report showing actual salesby dish and a theoretical Gross Profitin cash and by %. ( Data is entered asin the screen F to the left )
All the new a la Carte dishes havebeen created. I tagged all the disheson the menu at 72% and he can nowdecide his selling prices by averagingout the price levels so that the menuoverall will stand a chance of comingin at 72%
The Christmas Party Menus have allbeen costed to produce 70%. Theyare big business and are availableweekdays from the 1st December
Screen F - Sales Mix Report
Screen G - Recipe CostingThe screen above shows the Selling Price (inc. vat @17.5%) of this pasta dish, if youwish to achieve 75%. (any GP% can be entered)
through to the middle of Feb. toaccommodate all the localbusinesses and organisations.
Altogether we now have a databasecontaining 570 ingredients andaround 270 dishes. The software willallow thousands of ingredients,dishes and menus. Each menu can beup to 32 courses long, eachcontaining any number of dishes.
“Hope I’m never invited there, I canhardly manage three”.
There are other features in thispackage, like designing your ownmenus showing your own logo andother variations which I have notcovered in these articles.
It seems to do the work it wasintended for and on the whole theBoss and Chef are happy with it.
The question is…was it worth it?
Well, I talked to thechef, who put a lot oftime and effort into theexercise and I askedhim the followingquestions:
�Did you dread a visit from somenosy outsider coming to ask stupidquestions?
�Did you realise how much timeyou would have to put in just gettingthings down in writing for me toinput?
�Was the training session helpful?
�Do you think you will use theprogram at some time in the future?
�Have you changed anything as aresult of the info provided by theprogram?
�Are you pleased to have stocksheets which are bang up-to-dateand costed correctly?
MasterClass
STOCKAUDITOR 11
leche
fI also asked the Boss who was
concerned about the food operation,some similar questions:
�Time-wise did it take more hoursto set-up than you expected?
� Has the program done what youexpected it to do?
�Has it given you more informationthan you expected?
�Have the changes had an effecton the Food Gross Profit.
�Do you expect on-goingimprovements to the GP%?
Chef said:“ I was not happy about the food GPbut I thought we were losing moneyin specific areas. It’s not easy to becriticised at the best of times so Iwas not looking forward to yourvisits. However I was sure theSunday lunch was under-priced andit proved to be so. I also thought thatbreakfast was not getting us a goodGP% but I was wrong about that.““ I am spending a lot of time writingout recipes and tweeking them to getmore profit so it is not a waste of timebecause we will see the benefitseventually. Hopefully I will soon havea good selection of recipes and I canstop writing! The next big one isChristmas Eve and Day followed byNYE but most of that is done!”
“ I like the bit of the program thatproduces the stock sheets as long asyou do the hard work. I don’t think Iwill ever get to grips with it but I canalways delegate it to my younger,more computer literate second!”
The Boss had his own point ofview!
“ I have been looking off and on forover six months for a program whichwould give me a line on the foodoperation. We have very fewcomplaints about the food. I eat onemeal in the restaurant every day so Iknow generally that what we produce
is good. It’s just the GP% that is aworry. I cannot comment on the timefactor because I have nothing tocompare it to. All I know is that wecouldn’t have done it ourselves. Sofar it seems to be working fine andwe are getting improved results. TheGP% has increased by about 3%since Feb and when we get the newa la carte menu in next week andstart to feel the effect of the newsuppliers prices, I think we will be‘cooking with gas’, pardon the pun!”
“ We will get a lot of use out of thesoftware and as long as we are doingthat then I think it’s been worth it.Eventually though, we will have to getChef or one of the brigade to use itthemselves.”
1 small bunch fresh coriander 10g fresh mint roughly chopped 1 tspn hot chilli (optional) 1 tspn ground cumin 1/2 tspn ground cinnamon 1 x 400g can chopped tomatoes & 1 x 400g can chick peas , drained
and rinsed .
75g “no soak” dried apricots chopped
25g Blanched almonds 1/2 an organic vegetable
stock cube
Method
Put oil, garlic, onions, chicken,herbs and spices in a largesaucepan or flameproof casseroleand toss well together. Place overa medium heat and cook for fiveminutes, stirring regularly .
Add all the remaining ingredients,then refill the empty tomato canwith cold water and pour intopan, bring to boil, then reduce theheat and simmer gently untilcooked.
Serve with a crunchy salad or lotsof steamed or lightly boiledvegetables and couscous tossedwith sliced onions and a fewsultanas, if preferred.
And finally ENJOY
MembersPage
STOCKAUDITOR12
For those of you who attended therecent AGM in Dorset, St. Dunstanswill need no introduction. Weraised the magnificent sum of £625to help them carry on their goodwork. Formed some 93 years agoSt. Dunstans helps ex-service menand women who have lost theirsight, whatever the circumstances.At a time when our armed forcesare again in need of extra help it isperhaps a good time to support thisworthwhile charity. Ourinvolvement was of coursetriggered by the help andassistance given to Trevor Knightwho was accepted as aSt. Dunstaner because of hisnational service.
St. Dunstans was again in the newsrecently when long term residentHenry Allingham passed away at itsOvingdean Centre at the ripe oldage of 113. This confirmsSt. Dunstans commitment of lifetimecare to ex-servicemen. Many of theresidents were blinded in thesecond world war and some inmore recent conflicts.
St. Dunstans helps 35 new blind ex-service people every month – not allhave been injured in combat,although the ongoing wars in Iraqand Afghanistan are stretching still
St Dunstan’sAn independent future for blindex-servicemen and women
further their resources. Many fallvictim to eyesight diseases such asGlaucoma. This affects two peoplein every 100 to some extent.
St. Dunstans currently supports4,746 blind and partially sightedveterans and their dependents. Itequips many ex-service people withthe skills that they need to liveindependently. For those that canno longer care for themselves theyoffer care facilities at one of theircentres which are truly first class.Examples of how your donations arespent are shown below:
�£10 buys a liquid level indicatorenabling a St. Dunstaner to make ahot drink safely.�£15 can provide a talking watchto help a St. Dunstaner tell the time�£35 gives three hours of one-to-one training with a rehabilitationofficer�£100 could help buy a talkingmicrowave, enabling a blind personto cook meals independently.
For more details of this excellentorganisation visit their website.
www.st-dunstans.org.uk
They would welcome anyassistance that you can give them.
Ovingdean - a home fit for heroes
Mandatory Code to tackleIrresponsible Alcohol sales
The latest Home Office initiative totackle irresponsible alcohol sales againappears to target the on-trade. Themandatory code for all licence holdersis backed with discretionary powers forlocal authorities. Conditions in themandatory code include:-
�Banning promotions such as ‘all youcan drink for £10’, speed drinkingcompetitions, and ‘dentist chairs’ wherealcohol is poured directly into thecustomers mouth.
�Ensuring that all bars give customersa choice of single or double measuresof spirits and a large or small glass ofwine.
�A requirement for alcohol retailers todisplay information about the alcoholunit content of drinks and, for off-licences, the health impacts of alcoholunder powers from the Food Safety Act1990.
A secondary set of conditions give localauthorities the flexibility to take toughaction in areas where there is a highlevel of alcohol related disorder byimposing conditions such as :-
�Banning irresponsible bulk-buypromotions.
�Requiring staff to operate a‘challenge 21’ policy, requiring anyonelooking under 21 to produce proof ofage.
�Requiring door staff to checkcustomers for drugs and weapons attimes most appropriate to alcoholrelated crime and disorder.
�Banning glass containers or ensuringglasses are collected regularly.
�Ensuring CCTV is operating at timesmost associated with crime anddisorder.
�Displaying information on publictransport and local taxi numbers to helppeople get home safely.
The measures are detailed in aconsultation document ‘ Safe, Sensible,Social. Selling Alcohol Responsibly’which is available from the HomeOffice.
As I am sure you will agree, the on-trade seems to have drawn the shortstraw yet again.
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News Page
Phil (left) and Peter celebrate their new venture
AFTER a combined 60 years in thelicensed trade, Phil Brown andPeter Jeffery have decided to calltime – and take stock.
The West Country duo have pairedup to establish a new stocktakingfranchise to service the hospitalityindustry across Cornwall andDevon.
Phil, 56, and Peter, 53, will coveran area from Land’s End to Exeterand believe that their high-levelexperience – they both held keyroles with S&N – could provedecisive for landlords and hotelmanagers currently battling withthe difficult trading market.
“Having worked at the sharp endof the licensed trade for so longwe appreciate just what it takes tobe successful and a strongstocktaking system is absolutelycritical,” said Phil, who lives inLiskeard.. “It can often be thedifference between staying afloator going out of business,especially in troubled times likethese when every penny counts.
“I worked for S&N as a businessdevelopment manager and Peterwas a sales manager out on theroad, so we were both in dailycontact with pubs, clubs andhotels. More than just selling beer,we got to know their businessesand were able to offer help in allsorts of areas.”
Phil and Peter have teamed upwith Stockcheck Ltd, part of thebiggest independent stocktaking
enterprise in the UK, to launchtheir new franchise.
“Having the Stockcheck brandbehind us was fundamental to ourdecision,” said Peter, who lives inSt Ives. “We have spent the vastmajority of our working livesselling top brands and we see thisas a continuation of that, plus theadded benefits we can bringthrough our national experienceand local knowledge.
“We could have gone it alone asan independent, but to have theexpertise and guidance of acompany as known and respectedas Stockcheck is a massive plus.
“We are going into the venturewith a lot of confidence, not leastthrough the fact that we will be
Cornish business duoCornish business duoready to take stockready to take stock
dealing with a lot of people whohave got to know us well overmany years.”
Stephen Grantham, managingdirector of Stockcheck Ltd, withheadquarters in North Yorkshire,added: “When Alan Roberts, whocovered the Cornwall area for usfor many years, announced that hewas to retire, we faced achallenge to find someonecapable of carrying on the work.
“In Phil and Peter we have twomen with a clear wealth ofexperience who can hit theground running. They have alsotaken part - and successfullyqualified - in our in-house trainingprogramme and are now keen toget out there further develop theCornwall and Devon franchise.”
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MembersInformation
CreditCreditCoercion !Coercion !
I am sure that we all use our personalcredit cards to fill our cars up withfuel or to buy printer toner on-line –well you may be surprised to knowthat you are committing a criminaloffence. It is illegal to use a personalcredit card for business use – yourcredit card company will have toldyou in the small print summary thatthey sent with your new card – I amsure you all read them! Newregulations affect who can beprosecuted for the offence and thismay have far reaching effects on ourtrade.
If the card is registered to thebusiness as a ‘business use’ card itwould be usual for the credit cardcompany to take payment by directdebit on a monthly basis. It is truethat most credit card companies turna blind eye to transgressions of thisnature.
Under the Consumer Credit Act 1974the credit card companies requirethat you sign under their terms ofagreement that ‘ you must not use
your card for anything illegal or forbusiness purposes’. The credit cardcompany can end the agreement atany time if you break your agreement‘repeatedly or seriously’. Any monieswould have to be repaid on demand.
Legislation has been furtherstrengthened by the Unfair TradingRegulations 2008 which came intoforce in May. The regulationsintroduce ‘ a general prohibition ontraders in all sectors engaging inunfair commercial practices ( mainlymarketing and selling ) againstconsumers’.
Although it has not been tested incourt, the new legislation affects
who can be prosecuted apart fromthe card holder. In reality the cardcompany rarely uses its powersunless the cardholder goes intoadministration or is declaredbankrupt. For example, in the case of
lessees who have been puton cash with order it wouldnow be illegal for the BDMor credit controller to takepayment by credit cardunless it was a bona-fidebusiness card. Failure tofollow this simple rulecould result in a fine for upto £5,000 or two yearsimprisonment for both the
card holder and anyone who aidedand abetted them in the offence. Thecharge would be fraud and theoffence is criminal and not civil.
I am sure that many of us haveunwittingly broken this law –technically we should all have abusiness card for any businessexpense but as many of us use ourcars for private use, where do youdraw the line ?
The rules of the credit cardare unambiguous - youcannot and should not use aprivate credit card forbusiness use !
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Tips and gratuities not partof National Minimum Wage
Employers must pay their employees atleast the minimum wage regardless ofany tips, gratuities or cover chargesunless these are paid through theemployer’s payroll. This was theconclusion of a Court of Appeal rulingin Annabels Ltd & others v HMRevenue & Customs Commissionerswhich upheld HMRC’s interpretation ofNMW legislation.
The case related to the calculation ofNMW pay where service charges, tipsand gratuities were distributed to staffthrough an independent tronc scheme.The court dismissed the appeal byAnnabels and others against anemployment tribunal decision thatservice charges paid by customers to
the employer, but then paid into a
‘troncmasters’ bank account for
distribution to the workers cannot be
part of the NMW.
Annabels and others must pay morethan £125,000 in arrears to its workers.From October of this year, changes tothe NMW legislation will outlaw thepractice of using tips to make up staffpay to NMW levels.
Still on the subject of NMW . It was£3.60 when it was introduced in 1999and is currently £5.73 for those aged 22and over. The Low Pay Commissionhas recommended that the new NMW,which will come into effect in October,should be £5.80 for those aged 22years and over, £ 4.83 for those aged18 to 21 and £3.57 for 16 & 17 year olds.The statutory annual leave entitlementfor all UK workers is also increasedfrom 24 to 28 days.
Dear Mr. Humphries,
I have filled in MLR100 to the best of my ability and in view of some of the questionsbeing asked, I am wondering if I need to be registered at all.
I am a licensed trade stocktaker and have been for 28 years.
In all of that time I have never seen my clients banks statements, bank paying-in books,audited accounts, gas/elect/telephone bills, indeed the only information I require areBrewery delivery notes/invoices and takings as recorded by my clients, sometimes thisamounts to just one figure for the given stocktake period and occasionally a takingsbook, which literally records daily takings. I have never had any knowledge of how thisfigure is arrived at or what happens to the money recorded.
Some of my clients I only visit once per year to do an ‘end of financial year stocktake’. Ihave never seen any books/paperwork and am literally valuing stock on hand. BasicallyI am just a bean counter.
I do not meet their staff, as I am generally on the premises, sometimes as early as 6.30a.m. when the premises are not open for business.
90 % of my clients comprise local authority, golf clubs and Conservative clubs. I have ahandful of pubs, many of whom I have been stocktaking for quite a number of years. Ifthese people are not who they say they are, they have been putting up a good cover fora very long time.
My work is diminishing alarmingly and I am currently going through the process of de-registering for V.A.T. I do not even know how long I will remain in business and I certainlydon’t know where my next new client is coming from.
With the very few clients I have left, I am not in a position to alienate these and therebyrisk losing work, by asking questions that I would not ask in the normal course of mybusiness. If I lose any more work than I am currently losing, by natural wastage, clientsgoing bankrupt/pubs closing etc. I will very soon be joining the jobless total.
By the time a publican ‘reaches me’. He will have been checked for Money Launderingby (1) his bank (2) The Brewery (3) the Broker/Solicitor acting for him to take the pub (4)his accountant. I am such small fry in this whole operation that I fail to see how I canspot ‘anything going on’.
The role of a stocktaker is to advise on prices, margins and to spot any petty pilferage bystaff, which in no stretch of the imagination can be construed as laundering money forany terrorist purposes or otherwise.
I have been advised by my trade association that I have to register for MLR and I knowthat ILTSA have put all these arguments to yourselves. Many of us are ‘one man bands’and we are alarmed by what we are being asked to do, when in the course of our workwe do not see the information which might lead us to believe there was ‘somethingstrange going on’.
I am desperately worried that what you are asking of me and my fellow licensed tradestocktakers is totally beyond our remit and could jeopardise our fragile relationships withclients.
I sent the £95 registration fee on 17th December, with my initial application. If you feelthat in view of the points raised in this letter, that stocktakers are literally that – stockcounters/valuers and by no realm of the imagination accountants, perhaps you couldreturn my cheque and disregard this registration.
Yours sincerely.
Don’t agree with MLRRegulations - If you don’t think we should haveto be registered for MLR pleasecontact your local MP with aletter such as this.It is the only way we are going tomanage to have the decisionrescinded.
�
AssociateMembers
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www.iltsa.co.uk
Residential Training SeminarsOctober 2009
Training courses held in April andOctober - Full details on
www.iltsa.co.uk
For further details on all aspects of the Institutecontact the Secretary, Diane Swift
on 01422 833003Always look for the letters F.I.L.S.A. & M.I.L.S.A. Tel:- 01684 878042
Would all Associates please note thatwe will be running the nextexamination at Foxfields Hotel,Lancashire on Thursday October 22nd.For anyone who is taking the fullexam or re-sitting the theory only, wealso offer the popular Refresher Dayon the 21st October. Not only does itgive the candidates an opportunity toget into exam mode, they can alsogain access to information they maynot experience in their everydayauditing activities, but which theInstitute believes every membershould be fully aware of.
The day is an informal and relaxedaffair commencing with tea, coffeeand introductions. An assortment ofquestions extracted from previouspapers are then attempted each inturn by the delegates and thenanswered fully as expected by themarkers. Each topic is discussed indetail to cover any eventuality thatmay arise.
Out of ten initial questions they cancover areas such as:
�Adjustments – month end/year end�Price changes during stock periods�Two bar operations – multi bars�Bulk purchases – allocating cost
prices�Food costing – Results – Allowances
�Post mix pricing�Barrelage�Discounts�Cash reconciliations�Changeovers�Reasons for surpluses/deficits�Mark up - Gross profit - Cost of sales�Gross profits - actual & estimated�Allowances - happy hours -
promotions�Profit and Loss Accounts�Measure changes - 25ml to 35ml�Free stock�Adjustments - wine glass sizes�Stockholding�Interpreting results�Projected sales analysis�Differences when extracting
categories�Retail stocktaking�Proving a result�Till readings - PLU sales
Following this exercise the delegatesare then asked to do a deliberateerror paper which forms part of thepractical exam. This covers allaspects of checking one’s own work,from extracting purchases correctly,checking additions on closing stocksand purchases, computer inputting,calculating allowances to all othererrors that can be made if a fullcheck does not take place followingthe completion of a result.
This is usually followed byhydrometer demonstrations for those
Refresher Day &Refresher Day &ExaminationsExaminations
who may not be used to dealing withspirit checks on a regular basis, as allexaminees have to take readings onthree different samples during thefollowing day. The day also gives tipsabout exam technique andmaximising marks.
We always make ourselves availableat the end of the day to deal with anyquestions on a one to one basis thatany of the examinees may wish todiscuss individually.
It is evident from comments at theend of the day that the majority ofthose attending find the refresher dayof immense benefit and extremelyworthwhile in preparing them for thefollowing day.
Bookings forms can be obtained fromthe Institute office for both theexaminations and the Refresher Day.Either telephone or Email
