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Tuesday, December 27, 2011

Food Cost Software Follow Up

We had a huge response to the food cost software newsletter.  I'd like to respond to everyone who wrote to me by category:

Why purchase a sophisticated (complicated) software tool?

The answer for this question depends not just on the complexity of your business but also on your use of the word SIMPLE.  Often in technology you will find it is very expensive to get a simple solution.  The iPad is a great example.  Apple spent many hours in development to get a light weight, fast, easy to use solution.

In accounting software (food cost control is based on a cost accounting model), you need to define the reports you want to receive first.  Then you need to imagine how complicated your operating environment is for an outsider to learn.  Pretend you are hiring someone who needs to know everything you know regarding food production.

If you have a 100% from scratch menu, you may want a sophisticated package.  As long as you prepare the same items each day, you would see a benefit.  If you go to the market everyday to shop around, I wouldn't bother.  You need a fast recipe card system to quickly get a feel for what you need to charge.

Every organization with multiple concepts and/or multiple profit centers, may be disappointed in the long run if they go with a cheap solution.  Profit center accounting is demanding and requires a solid structure designed to handle the comparison and history reports.

I have never used this type of software before.  Should I spend thousands of dollars to get the reports I need?

Unfortunately, food cost control software tends to become shelfware (not used) for many companies.  They build the original database and get excited about the recipe costing capability.  Many stop cold at this point.  These light users may return once a year to update menu prices.

The decision to invest heavily in cost control software depends on your willingness to constantly enter details of invoices each day.  On a POS system, the wait staff is performing your data entry work as they send orders to the kitchen and bar.  There is no data entry staff in your back office performing up-to-the-minute updates.  If you want a perpetual inventory system to control theft in real time, the purchase data needs to be as fresh as the POS data.

I am telling you there is a need to hire or train a cost control person or team.  Once you begin to see a much better return on the labor cost and time spent on cost control by switching to a comprehensive solution, the investment may make sense.

Are the low cost solutions the most simple to use?


Are the high cost solutions the most difficult to setup?


If you were in my position, would you buy a food cost control solution?

Yes.  100% sure.

To wrap up this follow up, I did receive emails from people using various solutions with a common concern.  It seems customer support is poor for many of these solutions.  I can tell by the tone of these emails the sales team over sold the prospect.  Most of the complaints were from people who found the project was anything but SIMPLE.

1 comment:

Joe Dunbar said...

Thanks for the note Walker!


Great posting about food costing, again! In working at a food costing / inventory solutions company, I can tell you that you're right: these things are not easy to set up! But neither is running a marathon! Inventory and proper food costing is a journey, not a destination. Controlling, likely the most expensive part of the restaurant business, isn't going to be easy. But I was glad to see that you do recognize the benefits of the process...

Keep up the great posts! And if you're ever into joining one of our podcasts, please let me know!


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