Food inventory cost is one of the most significant issues faced by restaurant owners, leading to a wide range of complications, including inventory errors and increased labor costs. Lower the costs of goods sold is an excellent way to reduce or mitigate these issues, and food costing software is the most sophisticated way to achieve these goals.
The software enables you to calculate food costs for recipes and ensure cost-effective menu pricing. In today’s article, we will discuss the benefits of food costing software and how you can use food inventory software to control food costs. Read on!
Benefits of Food Costing Software
Food costing is an essential concept for restaurants because it directly impacts your business operations and profitability. It primarily focuses on the cost of ingredients and does not involve other costs, including labor costs and overheads. Food costing software is an essential tool that helps you determine whether you have met food costs targets. Here are a few benefits of food costing software.
Most restaurant owners analyze invoices to determine payment for each ingredient. However, it is a time-consuming and daunting task to track the price for each ingredient. The good news is that you can avoid this situation by automating invoices and prices.
A food inventory costing software can accelerate and streamline this process, allowing you to check multiple prices simultaneously without wasting your time and resources. Therefore, it is worth investing in a food inventory system like KEXY.
Streamlined Price Monitoring
Because the costs of ingredients change each week or month, it is crucial to determine each menu item’s cost and selling price. Again, this can take a lot of time if you carry out the task manually. Food costing software automatically adjusts prices as they fluctuate using machine learning algorithms and AI-based capabilities.
The software knows all products that walk in the inventory and the amount of money you paid for them. For example, if the price of meat goes up, it will increase the price of some of your food items. So, if you want to avoid manual updates, make sure you use food costing software.
Likewise, if an ingredient falls in price, it is crucial to put that item on your menu to streamline your profit margins. Keep in mind that consistency and standardization of recipes are essential for calculating food costs.
Reduce Food Waste
Reducing food waste is one of the biggest advantages of food costing software for restaurants. It enables you to avoid purchasing items that you don’t need, leading to reduced food costs. Likewise, if you have a large inventory of ingredients on hand, you can experience food waste or spoilage risks.
Food costing software allows you to analyze and understand different trends and sale patterns, enhancing your decision-making strategies. So, this translates to improving your order accuracy because the software makes correct measurements to balance your inventory.
As a result, you will reduce costs by mitigating the risk of food waste. Use food costing software or inventory management software like KEXY to ensure you purchase the right-level inventory to reduce order waste.
How to Control Food Costs with Inventory Software
Successful restaurant owners always focus on inventory management and waste limitation, given the rising costs of food. For example, inventory is cash on your restaurant shelves, and waster, theft, stocking, and spoilage will negatively impact your restaurant’s bottom line, leading to the loss of thousands of dollars every month. Here are a few strategies to get the most out of your inventory software and control food costs. Keep reading!
Define Consistent Recipes for Your Menu Items
Prepare to use your inventory software by focusing on defining your recipes. Reputable software systems like KEXY can track food costs precisely to pennies. However, if you input wrong quantities or incomplete recipes, you won’t achieve on target numbers.
Likewise, if you have good recipes, inventory software can help you see by categories and ingredients, allowing you to analyze whether you over-prep, use too much, or not enough ingredients. KEXY is a reputable inventory software system for restaurants, allowing owners to achieve measurable quantities for recipes.
Remember, recipes may require thorough testing if you carry out the process manually. However, you can set up precise amounts using the software.
Set Up Unit of Measure Conversions
A Restaurant purchases a food item or an ingredient in one unit of measure (purchase units), but the stock and count (stocking and counting units) it in another. When they use it in recipes (usage units), you may not achieve your desired results.
On the other hand, inventory software can automatically convert units. For example, it can convert how many of one unit is equal to another. Let us give you an example so that you can understand this concept quickly.
For example, you purchase soft drink bottles in containers that contain 20 packs with 5 bottles each. Suppose that the soft drinks you receive are by the container or case, counted by the pack, and utilized by the bottle.
So, the conversion from the purchasing unit to the counting unit is 1 container = 20 packs. Likewise, the conversion from the counting unit to the usage unit is 1 pack = 5 bottles. Performing these conversions manually is challenging and daunting, but you can automate these processes thanks to inventory software.
Implement Portion Control
Portion control is a crucial aspect of successful inventory implementation and management. The primary goal of using inventory software is to control food costs. It helps you close the gap between ideal usage and actual usage.
We recommend following your recipes to close this gap and ensure that your staff use scales and measuring cups. Remember, the more you focus on portion control, the better you will control food costs. Inventory software offers support in this regard.
Food costing or food inventory software is indeed the ultimate solution to your inventory operations. Make sure you train your managers and staff to ensure they use the software adequately. That way, your managers can receive, transfer, and count inventory quickly.