We stand by our claim… Recipe costing isn’t all it’s cracked up to be.
Now, before every restaurant consultant in the land spews hate in the comments section, let’s take a step back.
Of course, recipe plate costing can help drive the profitability in your menu.
It’s what helps you create a dish that is not just culinary genius, but also financially delightful. In simple terms, recipe plate costing is about running a profitable restaurant.
But, that’s not the usual conversation we have when people talk about plate costing. More often, there are complex systems and models involved.
And those are massive, time-sucking beasts.
Do we really need theoretical food costs driven by the recipe plate costing module in our POS?
Somewhere along the way we got duped that recipe plate costing should be complicated.
It shouldn’t be.
After talking to thousands of restaurants about how they handle plate costing, we present our findings…
The top 3 reasons most recipe plate costing is ineffective… and here’s what you should do instead.
Reason #1: No ROI in Time Investment
Whether you use your POS, dedicated software, or a spreadsheet to do recipe plate costing, you’re going to spend hours on setup and maintenance.
There’s just no way around it.
You have to dedicate countless hours entering each ingredient you have on hand and its current cost. You have to count every ingredient for each and every dish on your menu – each one needs to be measured, entered into your system, and priced.
Then, you have to build out your entire menu and match the ingredients you have on hand to these menu items.
But let’s pause. When it comes to maintaining software or POS-based systems, think about the maintenance after the initial setup is complete.
Maintaining accuracy of your recipe plate costing system doesn’t end at set-up. It’s difficult and time-consuming.
If prices change even slightly on an ingredient, you have to update it.
With hundreds of items on hand, that’s a tall order. Usually, it involves manual data entry of your most recent invoices.
It’s a lot of time-consuming work. Manually tracking the changes in a software-based tool is not the answer. The investment is not worth the return.
WHAT TO DO INSTEAD
We tend to like simple. That’s why we’d recommend using any one of the free recipe plate costing tools out there that make calculating your recipe plate costs easy.
Or, maybe there’s another way. Technology that allows you to easily calculate your COGS can also increase the profitability of your restaurant with barely any work.
Reason #2: That Plate Costing Isn’t Accurate Anyway
A lot of POS systems tie in recipe plate costing as an add-on.
But, they rely on you to take a full, accurate inventory. They want you to count every item you have on hand, compare that to their system’s theoretical number, and then go from there.
The problem is… the numbers are only as good as the data you’re putting into your POS.
And let’s be honest. Oftentimes, that’s not very good data…
Because you’ll just skip taking inventory. Or you fudge the numbers.
Plus, recipes are never prepared with the same exact proportions every time they’re made.
And if your ingredient proportions aren’t right on target, your real cost-per-plate is going to be entirely different from the one your POS is telling you.
Even if you’re watching your kitchen crew like a hawk, your servers might not be entering every substitute side or extra sauce order into your POS.
Real life happens in the kitchen and you don’t have time to track everything…
But having to count your entire stockroom every week just to ensure numbers are correct is like driving around the block the long way… twice.
WHAT TO DO INSTEAD
What if your “theoretical” inventory could be more accurate than your actual count? And what if you didn’t need to take an actual count at all?
Yup, we’re serious.
The Orderly App allows you to measure how much is coming in and out of your restaurant each week without ever having to count an item. And the numbers are shockingly more accurate than if your night manager spent 8 hours counting in the stockroom.
It allows you to base all your reporting and business health around real numbers, not fudged ones.
Reason #3: Plate Costing Isn’t Menu Pricing
While recipe plate costing helps you price your menu profitably, it doesn’t translate to more profit… unless you change your menu.
How often do you change menu pricing?
That should really tell you your approach to recipe plate costing. If you can change your pricing regularly… you better be all about it.
But, if you only change menu pricing seasonally or less frequently, your plate costing strategy is much different. It’s a long play.
So the final frustration with relying on recipe plate costing too tightly is that you can track everything beautifully, but unless you can easily change menu prices the exercise of daily tracking has limited value.
WHAT TO DO INSTEAD
When you have an accurate, weekly COGS report, you will always have a current, up-to-date picture of your food costs.
With that report in hand, tweaking your menu prices will be easy as pie.
Conclusion: There Are Other Things You Should be Doing to Manage Food Costs
We agree that managing your food costs is important… No, it’s vital.
But, we don’t agree with some of the complex systems and processes that have come out of what should be a fairly simple exercise.
There are ways you can be managing your food costs.
Methods that have high impact and can bring thousands of dollars in savings with a fraction of the effort…
Ways that effectively manage your COGS without forcing you to spend hours in the stockroom every week.
They’d allow you to track prices faster so you can make a bigger impact on savings before ingredients hit the plate.
If you’re paying less when ingredients are coming in the door, the cost savings will trickle down into every dish on your menu.
The Orderly app does all that for you.
You snap your invoices, share your sales, and start saving immediately.
This allows you to make one-time price changes to your menu that will have a bigger impact on your bottom line than recipe plate costing. It shows you how to:
- Take advantage of savings when ingredient prices dip or rise
- Buy in bulk when it will save you money
- Run specials to increase volume sold
- Feature recipes with lower cost items to increase profit margins
So, get the Orderly app. Calculate your COGS, start comparing prices, and get better deals.
And don’t spend hours doing it.