Food Cost Management

Food Cost Management: The Lifeline to Restaurant Success

Food cost management plays a big role in the success of your restaurant. Managing food costs with the help of FCM technology can help you set accurate menu prices, keep tabs on prime costs, and achieve maximum profitability.

Although it can be difficult, food cost management in restaurants doesn’t have to be. It takes a lot of time and effort to manually calculate food costs, count inventory, and cost out recipes. It must also be done frequently to ensure that expenses appropriately reflect shifting market rates.

Leveraging technology can help you streamline many processes within food cost management including:


Food cost management technology can help you keep track of your inventory. It also helps you keep track of ingredients you’re using and when and how much of each product you need. Inventory management is a crucial aspect of managing restaurant food costs. Using inventory technology can help you place more cost-effective orders for food, drinks, and supplies — which increases your revenue. With the help of inventory technology, it no longer takes hours to manage inventory including kitchen waste and improper preparation.

Cost of Goods Sold

The entire cost of all the food and drink items used in your restaurant during a specific time period is known as the cost of goods sold (COGS). The days of manually calculating your COGS are long gone. By utilizing food cost management technology, you can identify price fluctuations and make necessary adjustments by reviewing COGS daily. You can also better plan ahead by ensuring the kitchen doesn’t overorder any ingredients that might be wasted. Or, under order ingredients and risk running out of your customers favorite foods.

Recipe Costing

The cost of each menu item is broken down to the penny, down to the portion size and every ingredient. You may maximize food use and decrease food waste over time by keeping track of the cost of each recipe for a menu item. When trends are broken down by menu item or location, you may use recipe costing technology to cut back on inefficient staffing practices and inaccurate portion sizes.

Your bottom line is directly impacted when you order incorrectly or overspend on food. By relying on food cost management technology, you can lower food prices and leverage accurate forecasting based on purchasing data. This results in the improvement of your restaurant operation and bottom line.

Food cost management is important to restaurants because it helps them control their expenses and increase their profits. By accurately tracking the cost of ingredients and menu items with this technology, restaurants can ensure they are pricing their items appropriately and not overspending on food.

Additionally, by managing food costs with the help of technology, you can identify areas to cut costs, reduce waste, and negotiate better prices with suppliers. Overall, effective food cost management is essential for the financial success of any restaurant.