How can I check a butcher shop’s sales against its meat purchases?

Sales alone say little. What the shop paid for meat, how much was lost in cutting and what was thrown out all shape what stays behind. A buyer who reads purchases and sales side by side gets a clearer picture. Our butcher shop due diligence guide covers inspections and cold chain; this page covers the numbers.

Start with the invoices

Ask for packer, wholesaler and farm invoices for a stretch that includes a slow period and a busy one. Add them up by supplier and compare the total to the cost of goods in the financial statements. Then check that payments to those suppliers appear in the bank records. Gaps can have ordinary explanations, such as stock on hand or a late invoice, but the seller should be able to give them.

Understand yield and trim

Meat is not sold at the weight it was bought. Bones, fat and trim come off, and what is left is sold at different cuts. Ask how the shop tracks yield on its main items and what it does with trim: grinding, sausage, stock or waste. A shop that can describe this clearly usually understands its own margins. Ask your accountant to help you read the cost figures.

Waste, cash and the calendar

Ask how waste and markdowns are recorded and how the shop handles product near its date. Compare till reports with bank deposits to see how much is paid in cash and whether it is all deposited. Finally, look at seasons. Barbecue months, holiday orders and hunting season each change the buying pattern, so compare like months with like months.