Tutorial

How to track material costs easily?

Do you have a material cost control strategy? Most professionals, whether experienced or novice , probablyknow that controlling the cost of products and beverages is essential to the success of their restaurant.

Free Trial | Koust Application

Although many professionals admit that they are not convinced that their material costs are so high. Some think they are keeping track of purchases, yet their results show a poor margin.However, the simplest solution is often to increase prices but customers are not always willing to follow.

Cost control requires a strategy in 3 important steps:Price control

    • Plan (or prepare)
    • Run
  • Measuring results

Omitting any of these three points by oversight or deadlock will inevitably result in a loss of restaurant profits.

1- Preparation or planning

Before you know if any of your dishes cost you too much, you need to know what that threshold should be. You need to know the theoretical or ideal cost of each of the dishes or beverages on your menu.

    1. Establish the theoretical cost of each element
        1. Recipe details,
        1. draw up the technical data sheets with the planned quantities,
      1. Every drink on the menu
    1. Update prices regularly : The prices of your suppliers evolve
  1. Calculate the cost of the menus by adding up the cost of each of his dishes.

2- Execution: Control of material costs

The next step is to execute what is planned.Therefore, in order to maintain the ideal or theoretical cost, you must prepare the revenues as you planned them, with the correct proportions from step 1.
This requires effective procedures:

    • Use of dosing devices for the bar and scales in the kitchen, close to the work station to facilitate the work.
    • Preparation of portions of ingredients to avoid incorrect dosages during kitchen service.
    • Efficient storage of foodstuffs to reduce losses.
  • Finally, write the procedures (process) of the preparations to respect the recipes and to reduce waste.

In order to respect these procedures, it is particularly important to properly train the people involved in the preparation of dishes, cocktails, etc. The procedures will also have to be improved for each quality problem.

3- Measuring results

Finally, after these 2 steps of preparation and execution on target costs, you must adopt an effective system for measuring your actual costs.

Only by comparing actual costs with target costs can you determine whether you have achieved your goals. 

The following formula is used to calculate the actual margin (gross margin):

Actual margin = Expenses / Sales

Turnover = total sales of your cash register

Expenditures = Cumulative food and beverage consumption

Ideally, it is preferable to make an inventory at the beginning and end of the period to obtain the cumulative consumption. The period can be monthly or weekly , so an annual period is too long to have a sufficient impact.

Cumulative consumption = inventory at start of period + Invoice period - inventory at end of period

Therefore, if necessary, you will have an estimate of your margin without taking into account the variation of stocks.

In conclusion, a more precise control of each element of the card thus makes it possible to know which control to carry out over the following period. The procedure may also be changed.

Free Trial | Koust Application

Koust

Koust is a management software dedicated to CHR professions.
Koust allows you to optimize the profitability of your establishment.
The idea is simple: better control over quantities and costs by having more control over procurement and production.

Free Trial

Request a demo