Tuesday, August 17, 2010

Food Cost Control and Excel

Question:
Joe,
I'm looking into buying a menu costing program/software are there any you recommend?

Answer:
I can recommend 2 or 3 solutions. It depends on your long term objectives. Please email me at joe@joedunbar.com so we can pick your ideal solution.

Response from Erik:
From what i have come across, Excel should be the go-to costing program and you should use your own data.


Good point Erik!

I can't think of food cost control without Excel in the picture. The only issue I have is the term "Excel user" has a tremendous variation.

There are people who could model the Big Bang using Excel and other people who haven't discovered the SUM formula (use + sign).

Importing history into Excel is a pain if the files change (for example, a new menu item) for anyone who hasn't mastered Excel's terrific data functions.

Once the power users get everything done conceptually, many migrate the model over to Access so database updates go smoother.

Somewhere along this curve, the benefit of purchasing a software tool specifically designed to handle recipe costing, menu analysis and cost control turns positive.

Many of my clients had terrific Excel based recipe costing models which helped us in building a solution. They often find additional savings of 10% (i.e. if their current Excel control food cost was 30% they would find the new food cost would drop to 27%).

Overall, I believe Excel is the logical starting point for anyone who is serious about getting on top of their food cost. My advanced menu analysis tool - The Menu Map - is 100% Excel based. Since the model focuses on only 3 data points (selling price, food cost and number sold) at the core, Excel is ideal.

Once you want to filter purchase data, Excel loses the power a serious food cost controller needs for investigating problems.

For example, FoodTrak lets you filter invoices by date range, vendor, report group, invoice number, and specific items. There are exception reports to bring many issues to your attention and the terrific data entry alerts show major price variations in real time.

Resorts may need transfer cost reports. This report is a major pain in Excel. Cost updates from purchase data provide freshly costed transfer reports by profit center. Of course, many operations do not have this need. The answer really depends on the operation.

[This post is from comments on the Basic Recipe Costing post.]

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