What is the best way to keep track of food costs for your restaurant?

1 Calculate your food cost percentage

The first step to keep track of your food costs is to calculate your food cost percentage, which is the ratio of your food expenses to your food sales. To do this, you need to know how much inventory you have at the beginning and end of a period, how much you purchased during that period, and how much you sold. The formula is:

Food cost percentage = (Beginning inventory + Purchases - Ending inventory) / Food sales

A lower food cost percentage means you are spending less on food compared to your sales, which is generally desirable. However, you also need to consider other factors, such as the quality of your ingredients, the type of cuisine, and the market demand.

2 Track your inventory regularly

One of the best ways to keep track of your food costs is to track your inventory regularly. This means counting and recording the quantity and value of all the items you have in stock, such as dry goods, produce, meat, dairy, and beverages. You should do this at least once a week, or more often if you have a high turnover or a large menu.

Tracking your inventory helps you avoid overstocking, understocking, spoilage, theft, and waste. It also helps you plan your purchases, menus, and specials based on what you have available and what you need to use up.

4 Train your staff on food cost management

Training your staff on food cost management is a great way to keep track of your food costs. Your staff, who handle, prepare, and serve your food, have a direct impact on your food costs. Educate them on the importance of food cost management for your restaurant's success, the best practices for measuring, storing, and cooking ingredients, the standard recipes, portion sizes, and presentation guidelines for each menu item, as well as ways to prevent and minimize waste, spoilage, and theft. Additionally, instruct them on the procedures for recording and reporting inventory, purchases, and sales. To encourage them to follow the food cost management policies and achieve the food cost goals, reward and motivate them accordingly.

5 Review your food costs regularly

The final way to keep track of your food costs is to review your food costs regularly. This means analyzing your food cost data and reports, comparing them with your benchmarks and industry standards, and identifying any problems or opportunities for improvement. You should do this at least once a month, or more often if you notice any significant changes or discrepancies.

Reviewing your food costs regularly helps you evaluate your performance, make informed decisions, and implement corrective actions. It also helps you stay on top of the market trends, customer preferences, and competitive pressures that affect your food costs.