Food costing has always been the eternal problem for food businesses.
Tedious, time-consuming, and a painfully manual process, and it’s usually seen as an exercise in record-keeping rather than a proactive process that enables real improvement or growth.
Now a new generation of food costing software has the potential to turn this former chore into an asset, a powerful lever for increasing profitability and resiliency—but these new tools are not all made equal.
The average food costing software is re-purposed accounting software, which isn't built from the ground-up for food businesses. And they are so clunky and hard to use that kitchen staff end up reverting to pen and paper or an Excel spreadsheet.
We know food companies that have thrown away millions of dollars on software that their managers and chefs don’t even use.
So with all these options on the market, what should you be looking for in food costing software?
This article will outline the key elements to look out for, including…
- Why accounting-based food costing software isn’t enough in 2020 and beyond
- How cleaning up your data can reduce waste and improve margins on every dish sold
- The importance of investing in software that your team will actually use
By the end of this article, you’ll be ready to choose the right technology that’ll pay back your investment many times over. Here are the six things you need to look for.
1. Designed Specifically to Solve Food Industry Problems
Most food costing software is re-purposed accounting software made for number crunchers rather than culinary leads, revenue officers, or operations managers.
Food costing is full of complexities that accounting software isn't built to handle.
- Hundreds of different ingredients from a range of suppliers
- COGS volatility, changing your food costs on a weekly basis
- The hidden cost of food waste (trim is completely left out of oldschool tools)
- Chef tweaking and adapting recipes on the fly
And this is just the tip of the iceberg.
If you want accurate data about the costs and margins of your dishes, you need software built specifically for food businesses. Let’s get more specific about what that means.
2. Clean Up Your Food Data with Auto-Conversions
A classic example of food costing complexity is the number of conversions needed to calculate costs across dozens of ingredients, units of measurements, and recipes.
Some ingredients are measured by volume, some by weight, some by number. Some suppliers use the metric system while others use customary measurements.
Making sure these conversions are done accurately—then triple-checked—is a pain in the peaches for humans and software. It’s why manual food costing takes so long and is prone to error.
Next-gen food costing software should handle any type of unit and convert it instantly into the unit you want to use—on demand, at the click of a button. That way you can forget about conversions, safe in the knowledge that everything is accounted for under the same standard.
3. Real-time Food Costing Is Essential
Traditionally, costing your ingredients meant sitting at a desk with a stack of invoices and delivery notes, adding up the numbers from last month. You’re double-checking what happened in the past, with the nagging worry that ingredient prices are constantly changing moving forward.
As any executive chef will tell you, updating ingredient prices as they change is a nightmare. They’d rather run a 300-cover dinner service than deal with the paperwork.
Real-time food costing means you can make changes to your menu today, knowing that they are up to date and accurate. You’re no longer crossing your fingers, hoping for the best.
Repurposed accounting solutions on the market require you to input numbers manually, which is almost as tedious as using pen and paper and amounts to the same thing, but digitally.
Software built for food businesses is smarter. Galley connects with vendors in real-time, ensuring that your prices are always up to the minute. It automatically updates prices so you don’t have to worry about making manual changes—accurate food costs are always available when you need them.
Here’s how it works:
- Your software shows you food costs for a recipe or an entire menu based on real-time vendor prices
- If costs for a dish are higher than normal, you can identify the ingredient that’s more expensive this week than last week
- Now you can tweak the recipe, substitute ingredients, or buy from a different supplier, then see how it impacts your food costs—all within a couple of minutes
- Your updated recipe has higher margins than it would have just a few minutes ago—success!
Want to try it yourself? Take Galley for a spin with your recipes.
4. Calculates Trim Yield
Whether they’re trimming a pork shoulder, peeling potatoes, or slicing an onion, even the world’s most economical chefs create waste.
This means you’re paying for parts of ingredients that never make it onto the plate, and the cost of these trimmings adds up.
If you’re not taking trim yield into account, you won’t have accurate food costs.
Food costing software should know you don't use 100% of what you buy and account for it. Unfortunately, most food costing software is completely incapable of calculating the cost of this waste (which shows how ill-suited they are for the food industry).
We designed Galley to make trim yield calculations a breeze, so you know your true costs per menu or recipe. All of you have to do is weigh the trim, add the measurement, and Galley will calculate the rest for you in existing recipes and new ones.
5. Tools for Recipe Innovation and Development
When you can cost your recipes in real-time, you’re able to improve recipes and processes to reduce waste and be more efficient with your ordering—then act on it immediately with confidence and clarity.
Clean data enables ongoing optimization. Galley has features that make it easy to tweak quantities, substitute ingredients, change portion sizes, and make other adjustments, and then see how it impacts your revenue and profit margins in real-time.
This helps you to continually optimize your processes in a positive feedback loop that continues to improve your data too.
The benefits quickly stack up:
- Keep food costs in check
- Reduce waste
- Improve your margins
- Boost the profitability of your dishes
Food costing software should allow you to make recipes and menus more profitable in the moment, with all the permission and version history features you’d expect from a collaborative tool.
6. A User Interface Your Managers Will Actually Use
The ugly enterprise software trope is still true today, and poorly-designed user interfaces have consequences. Unintuitive and hard to navigate software leads to low adoption rates—that means your staff’s going right back to spreadsheets or pen and paper.
You’re back to square one, running on assumptions and intuition. Plus you’ve spent all that money on software that’s not being used.
Thoughtful UI isn’t a “nice-to-have”—it’s essential to a successful software. Especially when the busy kitchen managers and cooks who use it daily often have a limited amount of time and patience.
We designed Galley's award-winning UI for maximum use in the kitchen, not just in the management office. Chefs and cooks actually like using Galley. They can quickly pull up what they need and make changes or check important information at a moment’s notice.
Our data shows that Galley’s adoption rate is nearly 100% higher than the average recipe costing software because we built our UI specifically with chefs and cooks in mind.
Do you really want to pay for software that your staff don’t want to use? The more people use the software the cleaner the data and the stronger the insights. Ultimately, this means happier chefs and managers and a stronger ROI for your business.
Make Your Investment in Food Costing Software Count
It’s no longer necessary to spend hours hunched over a spreadsheet guesstimating your margins based on last month’s figures.
Today's high-cost, high-competition food industry demands precise, real-time food costing. This is finally possible, thanks to a new generation of food costing software.
And we’re thrilled to lead this new movement.
Galley is uniquely built for the food industry, helping enterprise-level food businesses master their food costs and production. We’re helping meal kit companies, growing restaurant chains, contract foodservice providers, and others take unrivaled control of their costs and margins to focus their business on profitability.