One of the most powerful features in goRoster is its employee wage costing and budgeting capabilities. Each employee can be assigned a payrate associated costs to apply when they are rostered on to a shift.
When a roster is built in the roster designer, you get an immediate breakdown of the employee wage costs by employee, day and week. Having a close understanding of how these wage costs affect your budget can help to you understand your financial position as a hospitality business.
Budgets can be set by roster or by business unit (if you are using the business units add on). A budget can be set either by total hours worked or by employee wage cost as a percentage of revenue (takings). Your choice of budgeting method will depend on your business.
The simplest form of budgeting is to budget by the maximum number of paid hours. This may be used in situations where all/most employees on the roster have the same hourly rate. i.e. if you know the wage cost/hour you could work back from weekly $ budget to get the max hours worked budget figure.
For example, all employees working on the Restaurant Roster get $20/Hour. If your budget each week for wages is $3000 your Maximum Weekly Hours Budget could be 150 Hours/Week for that roster.
To enter your Maximum Hours Worked budget go to settings > Roster/Roles > Roster Settings > Max Weekly Hours.
The most common method of budgeting in goRoster is to use the Wage Cost % of Revenue figure. Each hospitality venue has a unique figure which depends on a variety of factors.
Revenue - (Fixed Costs - COGS - other costs - Employee Costs) = Profit.
If you are to break even then all your costs need to add up to your revenue each week, to be profitable they need to be less than the revenue you bring in.
You can express each of these components as % to get the following formula.
For break-even scenarios where Profit = 0 the formula as expressed by a percentage becomes:
(Fixed Costs% + COGS% + other costs% + Employee Costs%) = 100%
Looking at the components of the formula you will notice that both Fixed Costs and COGS (Cost of Goods Sold) are more difficult to control while your employee costs are determined by the number of employees rostered on to work each day. By tracking the employee wage costs as a percentage of revenue you can get a rough idea of your current business performance.
Worked Example:
The following example illustrates how your budget applies each day in the roster. In the top image we see the budget indicator from the dashboard (tile view). This indicator shows estimated wage costs for the week. As you can see the budget is 25% while the estimated wage cost % is only 24.02%. This is an example of an in-budget business.
The following image from the Dashboard (Financial View) gives a breakdown of the employee wage costs, revenue and wage cost % (cost/Rev) by each day of the week. By referring to this view and specifically the Cost /Rev % a rostering expert can make changes to the roster as needed to ensure that the weekly cost/rev total stays under the budget.
The budget can also be represented by the Cost vs. Revenue chart in the dashboard (List View). The blue line represents the employee wage costs while the green is the revenue.
If you would like to delve further into your financials and budget. A financial export can be produced and manipulated in Microsoft excel. To export your financials, go to the Dashboard > More > Export All > Financial > Export.
None of the information included in this article relates to financial advice. If you are unsure of any of the concepts discussed in this article, please direct your queries to a licensed financial advisor before making any business decisions.