---
title: "RCY — Prelims and period-close reviews"
sidebarTitle: "RCY prelims"
description: "The RCY corp prelim report and the DHC store-level COS % audit report — the final gates before Dave's financials are distributed."
icon: "clipboard-check"
---

> **For AI agents:** the complete documentation index is at [llms.txt](/llms.txt). Append `.md` to any page URL for its markdown version.

Two review workpapers — **checks, not posting workpapers.**

<Info>
  **Source:** `Rackson_Workpaper_Instructions.docx` — Part II, Prelims & Period-Close Reviews.
</Info>

<Note>
  **Overall for RCY:** ensure all files are reviewed and stored on SharePoint. Beyond the two reports below, the period-close review also includes running both the **Side by Side** and **Period Trend** favorited reports and storing them as Excel for AI-assisted review, confirming **inventory is posted for each location**, and pulling the **labor report out of ProWork**.
</Note>

## Corp prelim report — entity P&L actual vs. prior year/YTD

**Owner:** Jeff / Jonah

Compares the consolidated RCY entity-level P&L (Intacct dimension report, entity **E04**) against the same period last year, and current YTD against last YTD. It should reconcile to the sum of all individual DHC store side-by-side reports.

<Steps>
  <Step title="Run the report">
    In Intacct, run **Prelim Report — Actual vs Prior Yr** for entity E04, current period and YTD through period end. Export to Excel as `RCY_Prelim_Report.xlsx`.
  </Step>
  <Step title="Confirm gross revenue">
    Confirm acct **41100** (Food Sales-DHC) for the current period agrees to the total from the RCY Sales Verification workbook. **Any variance indicates an unposted sales journal entry or a timing difference between the DSS export and the GL.**
  </Step>
  <Step title="Review cost of sales by category">
    As a % of net revenue: **Food, Soda, Shakes & Drinks, Paper, Shortening**. Compare current period COS % to the same period last year, and current YTD to last YTD.

    <Warning>
      Flag any category with a basis-point swing greater than **200 bps** for investigation before finals.
    </Warning>
  </Step>
  <Step title="Review total labor">
    This report includes the **full labor stack**: Salaried Management, Hourly Management, Hourly Labor, Overtime, Bonuses, Payroll Tax, 401K, Other Benefits, Workers Comp, Medical Insurance. Confirm it ties to the labor reports pulled from the payroll processor for the period.
  </Step>
  <Step title="Sanity-check profit after prime costs">
    Net Revenue less COS less Labor. Trace a large unexplained swing to the underlying store-level side-by-side reports — the `DHCR01P01`/`P02`-style DHC district reports — before finalizing.
  </Step>
</Steps>

**Files:** `RCY_P5_2026_Corp_Prelim_Reports.xlsx`

<Note>
  Note the difference from RRS: the RRS corp prelim flags COS category swings at **150–200 bps**, RCY at **200 bps**. RRS also carries more COS categories (Sand Prep/Salad, Other Food, Condiments, Alcoholic Beverages, Cups & Lids, Misc Paper, Promos, and Rebate Income) reflecting the broader BK menu.
</Note>

## COS % audit report — store-level outlier review

**Owner:** Cade Kohlmeier / Betsy

Compares store-level COS % and ending inventory dollars (current versus prior period) for **every open DHC store**, flagging unusual basis-point swings or inventory dollar changes. This is the primary tool for catching **inventory count errors or miscoding** before they hit the financials.

<Steps>
  <Step title="Run the report">
    In Intacct, run the **COS % Audit Report** for entity E04 as of period end. It shows, by store: current and prior period sales, current and prior period COS $, current and prior period COS %, the basis-point change, and ending inventory $ for both periods.
  </Step>
  <Step title="Confirm inventory is posted first">
    <Warning>
      Run this **only after** the [50100–50500 DHC Ending Inventory](/internal/customers/rackson/workpapers/rcy-inventory-and-cash) workpaper has been posted — the report's current period COS % will not be accurate until the inventory adjustment is in the GL.
    </Warning>
  </Step>
  <Step title="Review the BPS Chg column for every store">
    A swing greater than approximately **300–400 basis points** in either direction is a strong signal of a **miscount, a miscoded invoice, or a missed inventory transfer** between stores. Investigate these first.
  </Step>
  <Step title="Read inventory $ change alongside BPS">
    A store with a large inventory dollar increase and a falling COS % — or the reverse — often points to a **count error** rather than a true cost change. Cross-reference the 50100–50500 workpaper for that store.
  </Step>
  <Step title="Resolve each flagged store">
    Contact the area coach or store manager to confirm the count, then determine whether a correcting entry is needed before finals. **Document the explanation for any outlier that is not corrected** — known promotional activity, a new menu item rollout, a commodity cost spike.
  </Step>
  <Step title="Reconcile to the corp prelim">
    Confirm the **Total RCY Open Stores** row reconciles to the Total Cost of Sales line on the Corp Prelim Report for the same period. The two reports pull from the same GL data and **should always agree**.
  </Step>
</Steps>

**Files:** `RCY_P5_2026_COS___Audit_Report.xlsx` · `P5_2026_AC_Store_Prelim_Reports_-_DHCR01P01.pdf` · `…DHCR01P02.pdf`

<Note>
  The screenshot walkthrough for generating, filtering, and filing this report — for both entities — is on [COS % audit report](/internal/customers/rackson/processes/cos-audit-report). Two separate report definitions exist, one per entity.
</Note>

## Related

- [P&L review process](/internal/customers/rackson/review-process/pl-review) — side-by-side versus trend, and the AI-assisted pass
- [COS % audit report](/internal/customers/rackson/processes/cos-audit-report) — the screenshot walkthrough
- [Running and delivering prelim reports](/internal/customers/rackson/processes/running-prelim-reports)
- [RRS prelims](/internal/customers/rackson/workpapers/rrs-prelims) — the BK-side equivalents plus the food supplier invoice count gate