Are spreadsheets enough for COGS tracking?

Sep 08 2016

Cost of Goods Sold Restaurant Technology Restaurant Management

Restaurants use spreadsheets for at least some function of cost of goods control. Spreadsheets can be utilized in areas ranging from purchasing to inventory to recipe costing. At some point, it may be time for a more advanced solution.

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Here are 5 indicators that it might be time to move on.

  1. Amount of Time Spent. Any manual process takes time to complete. Even a simple concept can take a few hours to calculate cost of goods on inventory day. If the time spent utilizing the spreadsheets can be better spent elsewhere, an advanced solution can free up some time.
  2. Consistent/Accurate Data. With different departments or different locations utilizing spreadsheets, each may have their own process or interpretation of what is required. When one location counts wine by quantity of cases, but another counts wine by quantity of bottles, it can lead to inconsistent data and cost of goods issues. Advanced solutions can be configured with standards that all are required to follow.
  3. Initial Configuration. Spreadsheets are great because they can be configured to suit a restaurant’s needs. To get there, it requires time and effort to create templates and formulas that will calculate cost of goods correctly. Advanced solutions have these templates and formulas already in place, and many times offer custom solutions to even further suit the needs of a restaurant.
  4. Uncontrollable Cost of Goods Sold. Sure, high cost of goods are an indicator that something may need to be addressed; however, what do you do with a high food cost percentage? If you’ve exhausted all options and still can’t get your costs down to a manageable level, an advanced solution can give you better vantage into levels of data that spreadsheets just can’t provide.
  5. Dynamic Menu. A static menu allows for minimal manipulation to spreadsheets. While there will be some new items here and there, it’s essentially set it and forget it. With a changing menu, spreadsheets require more frequent manual updating to get into alignment with those menu changes. An advanced solution can offer less time consuming ways to make those changes.

Moving to an advanced solution is not a decision to be taken lightly. Considering the above 5 indicators, along with what that transition means to a business, will help to determine if it’s time for something new. While something with all the bells and whistles sounds good, be sure to find something that fits the needs of the company, to provide you with the best Return on Investment.

Jeremiah Anzelc

Jeremiah Anzelc

Jeremiah is a former chef and restaurant manager. He has been a valuable member of Ctuit’s Client Services department since 2011 as a restaurant industry adviser with an emphasis on implementing cost of goods sold practices to ensure efficiency and profitability.