Increase Your Profit Margins by Lowering Food Costs Without Sacrificing Quality—Know How!
An interesting operations management hack for restaurants or F&B outlets is that standardising recipes is as important for creating the iconic taste that makes the food outlet famous as it is for expanding the profit margins.
However, as far as strategies for increasing profitability are concerned, the buck doesn’t stop at recipes. Inventory management—which includes audits, procurement planning, shrinkage and spoilage tracking, and inventory tracking—is the central pillar of cost-efficient operations management, followed by measures to prevent restaurant fraud.
Given the vital role played by restaurant ERPs for food cost tracking, whether it is via recipe management, inventory control, or steps to rein in fraud, we will, at length, explore how these expense control activities are carried out by the software.
In this blog, we have taken a platform-specific approach to understand how ERPs address food cost control challenges, and of course, the ERP platform in question is QPOS. Without further ado, let’s begin!
Strategy 1 of QPOS Doubling as Food Cost Management Software: How to Carry Out Recipe Management?
What Does the Recipe Management Module of QPOS Do?
Recipe Management is a key module of the QPOS restaurant ERP for food cost tracking, which tabulates the precise portion sizes of each dish and the amount of each ingredient used, along with precise cooking instructions, ensuring uncompromised taste.
Why Is This Module Important for an ERP Serving as a Food Cost Management Software?
There are two reasons why the Recipe Management module is important for saving food-related operational costs in restaurants:
- Reference for Training and Setting the Standards for Inventory Use: As discussed in our blog, How Your POS System (ERP) Can Help You Tackle Manpower Shortage in Your Restaurant, employee attrition is a major problem in the restaurant sector, thus requiring the business owners to frequently train new employees. Hence, a major hurdle is ensuring that the food is prepared with just the needed ingredient quantity and that the taste is conserved.
This is where the Recipe Management module’s key use case kicks in, helping chefs use ingredients in the right amount from the get-go.
- Planning Chef’s Special for Spoilage Control: Chef’s specials are an old trick in the restaurant management playbook, making the best use of leftovers, scraps, and inventory items nearing spoilage. As a module of the intelligent restaurant ERP, for food cost tracking, QPOS’s Recipe Management can be used for brainstorming specials, thereby maximising the value of sub-part ingredients.
What about Changes to the Dish, Requested by Customers—How Does QPOS Tackle That?
An ERP’s food cost management software capabilities set a benchmark for inventory use, thereby discouraging unplanned indulgence with ingredients. However, customisation requests are more about driving customer satisfaction—which is linked to profitability and repeat visits— rather than food waste.
Moreover, these requests often include minor changes in the use of ingredients, contributing to sustained profits in the long run, while major customisations incur extra charges, thus avoiding any negative impact on the profit margins.
Strategy 2 of QPOS Doubling as Food Cost Management Software: Inventory Management Done Right!
In one of our previous blogs, Smart Kitchen Revolution- How Centralised Kitchen Management Systems Transform Multi-Location Food Preparation and Cost Control, we discussed—although not for the first time—the impact of this powerful software-hardware integration, which is one of the most efficient ways to track inventory, without manual intervention:
- QPOS-integrated POS terminal
- POS scale
How to Decrease Inventory Theft with a Robust Restaurant Cloud ERP Like QPOS?
The POS scale connected to the POS terminal auto-updates the inventory in real-time at different stages of inventory handling:
- Upon procurement, when the fresh ingredients are measured
- During audits
- While the ingredients are taken out of the pantry for kitchen use
Therefore, theft-driven shrinkage can be easily detected during audits, and the incident can be traced back using CCTV footage.
Another such fraud happens due to dishonest suppliers and employees colluding, so that a smaller procurement can be incorrectly logged to overcharge the business. With the integrated setup of the POS scale and POS terminal, this fraud can be dodged, using the QPOS, the ideal restaurant ERP for food cost tracking and for preventing false Purchase Order fraud.
How to Decrease Inventory Theft with a Robust Restaurant Cloud ERP Like QPOS?
During audits, manual inspection reveals perishables nearing spoilage, which are then segregated to be quickly used up for specials, offer combos, etc., prepared taking inspiration from the Recipe Management ERP module.
Further, to prevent overstocking-driven spoilage, the inventory planning process can be frequently revised, using insights from the Analytics and Reporting module that leverages customer data and trends collected by the ERP for smart decision-making.
Do these steps prevent wastage entirely? The answer is not, and it may not be possible to completely avoid wastage. However, restaurants, aiming to effectively increase their profit margin, can strategise to minimise losses caused by waste. In the next section, let’s see how!
Strategy 3 of QPOS Doubling as Food Cost Management Software: How to Reduce Losses Triggered by Wastage?
With diligent and automated inventory logging, the Reporting and Analytics module of QPOS can show the amount of food that rotted. Restaurant owners can leverage this insight for better menu engineering and planning offers/discounts to effectively use the inventory. Similarly, audits can help trace inventory mishandling, thus ruling out theft and spoilage, and setting the scene for rules discouraging careless handling of inventory, bases, gravies, and prepared dishes.
Additionally, businesses looking at the QPOS restaurant ERP for food cost tracking and waste reduction can begin measuring plate waste as well. This measure can help optimise portion control, leading to better use of the inventory and rethinking the quantity of each ingredient in the procurement order.
Final Thoughts
Controlling food expenses in a restaurant without hampering food quality is easier said than done without an effective restaurant ERP like QPOS, which enables:
- Recipe Management
- Inventory and Waste Management
- Reporting and Analytics
Those seeking a powerful tool for food cost control, among other operations management, should check out QPOS’s all-in-one restaurant management software (ERP) platform as soon as possible.
Those of you curious to know more sooner and to hit the ground running with a quick QPOS installation can contact us now, and one of our executives will get in touch with you shortly!
