Make this the year of increased profit margins with a restaurant inventory management solution. Because of the continued social distancing measures and dine-in restaurant closures brought on by a relentless pandemic, already slim sales and profit margins have plummeted. Restaurants staying in business have done so by reducing costs and increasing revenue streams. One approach that can make a significant difference is lowering food costs and reducing inventory waste with restaurant inventory management.
Unfortunately, some chefs and operators find keeping up to date on ever-changing prices and inventory control methods both challenging and time-consuming. Yet food cost as a percentage of food sales averages about 28-32%, with food costs for some upscale full-service concepts coming in at 40% and higher, making this one of the highest costs in the restaurant business.
Fortunately, technology has made the process of food costing and inventory control seamless, less arduous, and more efficient. Let’s take a look at software designed for the restaurant industry and the benefits it brings.
Ingredient Price Trend Analysis
Foodbam, a company creating restaurant software solutions for 20 years and on the leading edge of restaurant food cost technology, created a comprehensive BOH software designed for the restaurant industry. In addition to numerous additional features, this application allows owners and chefs to run an ingredient price trend analysis.
This essential analysis reveals changes in plate profitability which may signal changes in food costs or uncover a mistake on a supplier’s invoice. This vital information enables operators to make menu changes or request refunds in real time instead of months down the road after profits have been significantly reduced.
Recipe Cost Calculator
It’s surprising how many operators and chefs do not know the food costs for each recipe and plate that goes out of the kitchen. Of course, with minimal support, it’s easy to let this time-intensive task fall by the wayside. The problem is that without a true plate cost, also known as a recipe cost, it is difficult to determine an accurate menu cost.
This number becomes even more important in our current environment of changing supply chains and price fluctuations. Do you need to change a recipe, increase prices, or reduce food costs? This number will answer those questions.
Calculating plate costs involves listing all ingredients, the purchased unit and cost, the yield, the actual unit cost, serving unit and cost, and serving size and cost. That sounds pretty painful, and it is, which explains why this all-important number sometimes goes uncalculated.
The good news: FoodBAM’s recipe cost calculator requires just a few minutes of a chef’s or operator’s valuable time to come up with the same number. Simply input how much of each ingredient goes into a recipe and FoodBAM’s restaurant purchasing software automatically calculates the total cost of each recipe, while factoring in both labor and waste.
Real-time Recipe Cost Updates
Restaurants increase profit margins when they use recipe costing to determine menu pricing. It’s that simple. Unfortunately, keeping up with changing prices and therefore changing recipe costs is one of the most formidable undertakings facing chefs and restauranteurs.
Buying your supplies through FoodBAM’s restaurant purchasing software means ingredient prices are updated in real time. No longer caught off guard, you’ll know when the cost of your signature dish has increased, and you can take actions by tweaking the recipe or increasing the menu price.
POS Integration
A restaurant’s actual cost of goods sold (COGS) is one of the industry’s most important metrics. As the name implies, it represents what it costs you to create the items you sell. You can determine COGS using this formula:
Beginning Inventory + Purchased Inventory – Ending Inventory = COGS
As you can see, determining COGS requires keeping up with inventory, another slightly irritating but critical element of successful operations. FoodBAM’s restaurant inventory management software allows automatic updates and connects with the recipe costing feature, delivering an actual COGS.
So, you may wonder, what does POS integration have to do with this remarkable technology? Because FoodBAM’s restaurant management software integrates with popular POS systems and cloud-based tablet systems, it connects recipe costs to your total orders and the actual COGS is then available with no calculations on your part.
Restaurant Inventory Management
FoodBAM‘s restaurant inventory management software comes with training and access to foodservice consultants. The FoodBAM team creates a seamless inventory experience by organizing the inventory software according to your how your freezer and dry storage areas are set up.
This easy to use and innovative software means restaurants can implement the service and start saving money in a matter of days. Throw away your recipe books and paper invoices, increase your profit margins, and enter the 21st century’s advanced digital age. Request a demo today!
