Q&A with Jay: Clubs & Inventory Trends
Our president and founder Jay Livingood recently sat down with our partner Clubessential to answer some questions about clubs and inventory:
Jay, what are some of the trends you are seeing from clubs over the past 9 months?
We have seen a huge increase in the number of private clubs reaching out to us to learn more about our inventory systems. In the middle of a pandemic. The highest levels we have ever seen.
What do you think is behind this surge of interest?
Prior to COVID, clubs certainly looked at their cost of good sold monthly, but its always in arears of the actual operation and was a little bit like “water under the bridge, let’s do better next month”. Now, with outings and member events business almost at zero, the margins have become razor thin and performance has taken on a lot more importance.
I would think clubs would have systems already in place to control their cost of goods sold. Why are they so far behind?
I think clubs have had the emphasis on the right thing for a long time – and that’s providing great food and great service to their members. But overall, the back of the house systems really haven’t changed much in 20 years. It culminates in a spreadsheet fire drill at the end of each month to get the Accounting Dept their ending physical. And anything you do only once a month is a difficult process to do well and quickly.
What are processes that clubs should have, but don’t?
Every club should be receiving the majority of their invoices electronically, updating some sort of inventory system, and then routing that invoice for payment to an AP automation system or directly to AP. The trick with managing cost of good sold is that it is NOT a once a month process. It’s a small daily process.
I also think all clubs should have a recipe system that updates when each invoice is processed. If you don’t have that, you can have cost creep erode your margin goal.
What would you recommend to a club who couldn’t add any new software or systems that would still help them control their costs better?
I would tell them to create a new process where all invoices are 1) Coded as normal, but 2) Taken up to Accounting where a quick check against a physical item list is performed. Any new prices are updated and any new items are added. I would have F&B and Accounting jointly do that process to ensure a check and balance. If you pulled this off, you’d be ready to do a physical at any time.
www.clubessential.com/partners
www.yellowdogsoftware.com/club-essential
