Top 5 Reasons You Need Food Costing Software

how to lower food cost restaurant food cost restaurant software
Top 5 Reasons You Need Food Costing Software

I know, I know, you don’t need another piece of restaurant software to add to your tech stack. But you're missing out in a big way if you don't add food costing software, especially if you're looking to control your food cost. I'm going to share with you my top five reasons you need food costing software and which one you should get.

The days of trying to control your food cost strictly with spreadsheets is over. If you're using spreadsheets for recipe costing cards, inventory and calculating your food cost, then you're wasting your time. It’s more than likely you’re producing a bad number, and you're probably the only one who can maintain them. 

Here are the top five reasons you need food costing software, in descending order.

#5 Automatic updating of product costs, inventory, product values and recipe costing cards. With a simple snapshot of your invoices uploaded to the cloud, with any good restaurant software, you can literally use your phone to take a picture of an invoice, send it up to the cloud and, like magic, that company is going to convert that and update every single one of your products that are already into your software. It's going to let you know when it's a brand new product that you need to make usable, or update a price, or marry a product with another one. For example, if you have chicken with another chicken, the software automates the 90% of the whole process and makes it smooth and easy. You can use it knowing when an invoice comes in you're not trying to calculate things. You just take a picture and boom it's done. 

#4 Get accurate shelf-to-sheet inventories. Take inventory in under an hour to know your actual food cost the moment it's done. You can set up your inventory, shelf to sheet, in the order the product appears on the shelf, the way you want it counted – by the case, by the bag, by the pound, by the each, by the container, doesn't matter. With this setup, you can count everything in the order it appears and you no longer have inventories with $30,000 in shredded cheese because somebody counted ounces and the spreadsheet had a case price. Food cost software is critical to this.

#3 Automatically maintain recipe costing cards to know your ideal food cost and take advantage of menu engineering. With accurate, up-to-date recipe costing cards you have the power to change your world. You finally are in a position where, like every other industry, they know exactly what an item costs them and what they need to sell it for to make money. All too often in the restaurant business we say, “Hey, chef, what are we charging for today's feature?” They respond, “I don't know,” and then pull a price right out of their rear. You could be losing money because they generally know what the protein costs, and they generally know what the side costs, and they generally know… Well, you generally ain't making money with this general approach. With recipe costing cards that are already put in once and updated every time you upload your invoices, you have the power to use those recipe cards, along with your product mix and your point of sale system, to know what your ideal food cost is. You can ultimately re-engineer your menu to find savings that exist right under your nose.

#2 Quickly see what products are rising in cost and how they’re affecting your food cost. When the price of beef is going up, or the price of chicken wings is going up, you can see the percentage or rise in the price and how's it affecting your bottom line. With this kind of data you decide if you need to raise some prices or prices on certain number of items, but you can see it because it's done automatically for you.

#1 Ideal versus actual product usage. This is a report that shows you that if you're taking inventory – beginning inventory plus purchases minus ending – it'll tell you how many pounds of everything left the shelves, or whatever measurement you’re using. If you're using food costing software with accurate, up-to-date recipe costing cards and tying it to your point of sale system to calculate your ideal food cost based on what your customers actually ordered, it's going to tell you how much product you actually used, how many pounds each is and so on. Your inventory might tell you used 350 pounds of chicken but based on your usage for what your customers actually ordered, you should have only used 300 pounds, so you're 50 pounds over. You can highlight items and talk with your kitchen professionals, show them the problem and talk about changes to make to fix it. This happens darn near automatically. It does take work to set up in the beginning, you do have to maintain it, and keep people using it, but I'm going to tell you it'll change your world.

You cannot run your restaurant without food costing software anymore. If you're looking for the right solution, the right software package, I recommend Margin Edge. Reach out and schedule a demo today. It'll change your life.

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