Recipe Costing Error Chain

One of the principal food & beverage businesses foundations to get to all financial targets is recipe development. 

Having recipes in place, yields test, portioning control will partially help to meet the business financial targets.

A mistake in this part can be catastrophic that will lead to massive losses.

Practical example:

  • A restaurant developed a new menu with 80 dishes. Every dish had 5 sub-recipes and every recipe had 5 ingredients.
  • The restaurant forgot to apply the yield % for every ingredient in all menu recipes, leading to under-costing of all recipes.
  • Management dictated the selling price for every dish using the erroneous costs.
  • The restaurant sold 4,000 dishes in a month.
  • At the end of the month management concluded that the restaurant did not make enough profit and had high food cost.
  • The menu with the wrong costing calculations will contain 80 x 5 x 5 = 2,000 costing errors that will produce financial losses
  • In the 4,000 dishes sold that month, there will be 100,000 costing errors. If for example the average costing mistake per ingredient is 11¢, the monthly impact is 0,11 x 100,000= $11,000

Point of Sale systems out there now days missed this important part, but Soop has the recipe development tool that will help you meet your targets.

If you need any assistance please ask one of our specialists how Soop can help you..