What are the best practices for tracking and analyzing food costs in a food service operation?

3 Monitor your portion sizes and costs

Tracking and analyzing your food costs is essential, and one of the best practices for this is monitoring your portion sizes and costs. These refer to the amount and value of food served to each customer for each menu item, which can have an impact on food costs, revenue, and customer satisfaction. To do this, you should determine standard portion sizes and costs based on recipes, yields, and prices. Utilizing a portion control tool such as a scoop, scale, or measuring cup can ensure consistency and accuracy. Training staff to follow these standards is important too; you can communicate and reinforce them with a portion control chart, checklist, or feedback system. Additionally, you should review and adjust portion sizes and costs periodically in line with food cost percentage, customer feedback, and market conditions. A menu engineering tool such as a contribution margin analysis can help optimize menu mix and profitability. Ultimately, monitoring your portion sizes and costs can help control food costs, increase revenue, and enhance customer loyalty.

4 Compare your actual and ideal food costs

Tracking and analyzing your food costs can be done by comparing your actual and ideal food costs. Your actual food costs are based on your inventory, purchases, and sales, whereas your ideal food costs are based on your standard portion sizes and costs. To compare the two, you need to calculate your actual food cost (without multiplying by 100), your ideal food cost (by multiplying your standard portion costs by sales), and then subtract the ideal from the actual to get your variance. Divide this by the ideal cost and multiply by 100 to get the variance percentage. For example, if the actual cost is $13,000 and the ideal cost is $12,000, then the variance would be $1,000 and the variance percentage would be 8.33%. The lower the variance percentage, the better the performance and efficiency. This metric can be used to monitor progress and set goals.

5 Use a food cost software or app

The final best practice for tracking and analyzing your food costs is to use a food cost software or app. This digital tool can help automate and simplify calculations and reports, saving you time, money, and errors, while providing valuable insights and recommendations. To use a food cost software or app, you need to choose one that suits your needs and budget; there are numerous options available with various features and prices. After inputting your data and settings, such as inventory, purchases, sales, recipes, and standards (which can be done using a barcode scanner, receipt scanner, or POS integration), generate and review the food cost reports and dashboards. You can customize and filter the reports to suit your preferences, apply the suggestions from the software or app (e.g., changing menus or ordering supplies), as well as share and export them to stakeholders and partners. Ultimately, by using a food cost software or app you can optimize your food costs, improve productivity, and grow your business.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?