Resto iQ Inventory - Reports
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      3. Resto iQ Inventory - Reports

      Guide to Inventory Variance and Food Cost

      Overview

      Inventory Variance and Food Cost report in Resto iQ allows users to see the difference between the actual count of inventory items and the expected count based on records. It highlights discrepancies that can arise from theft, spoilage, wastages, or any errors in tracking. Food cost on the other hand, is the cost associated with the ingredients and preparation of menu items, and it's a critical factor in determining the profitability of food-related businesses by analyzing the COGS against the revenue.

       

      Guide

       

      There are three main reports under variance and food cost.

       

       

      Theoretical food cost

      Based on Resto iQ's projected amount of ingredients used assuming zero wastage during prep and service. It can be used as a benchmark as to the efficiency of the kitchen and provides key areas for efficiency improvements. This assumes perfect efficiency.


      Food Cost % - average theoretical food cost for all items
      Total COGS - sum of all Total COGS (see table below)
      Total Sales = (Qty Sold)*(Product Price)



      Users can see the Name, Qty Sold, Item Cost, and Total COGS. The formula for this table is:
      (Qty Sold) * (Item Cost) = Total COGS

       

      Actual food cost

      Represents the real cost of ingredients consumed during a specific period. This is heavily affected by actual beginning and ending counts of the inventory.

      Inventory Category - these are your inventory categories configured on Resto iQ.
      Beginning Value - refers to the value of your inventory, determined by the actual count at the start of the reporting period.
      Purchase Value - cost value of additional inventory purchased during the reporting period.
      Adjustment Value - adjustments made to the value of the inventory (positive or negative) during the reporting period.
      End Value - refers to the value of your inventory, determined by the actual count at the end of the reporting period.
      COGS - is the actual Cost of Goods Sold computed as:
      (Beginning Value + Purchase Value + Adjustment Value) - End Value.


      Cost per Ingredient

      Under the Actual Food Cost report, the second table is the cost per ingredient. This provides users with a detailed cost report for various food ingredients to help manage expenses and inventory efficiently. It provides users with a quick analysis regarding purchasing and production planning

      The table includes:
      Ingredient - names of the individual ingredients/inventory item.
      Unit Name - unit of measure used for this particular inventory item.
      Adjustment Value - the amount (positive or negative) of units adjusted upon using inventory adjustments module.
      Purchase Value       - the cost amount upon purchasing the inventory item.
      End Count - represents the stock level at the end of the period.
      Production Yield and Production Usage - the amount produced when creating either a semi-finished good or a finished-good (e.g., ground beef + salt + pepper = beef patty; and beef patty + burger buns + tomato + lettuce + burger sauce = Burger).
      Beginning Value and End Value - the value of the inventory item for beginning/end of the period.
      COGS - Cost of Goods Sold for the period.



      Inventory variance report

      This reports the difference between the recorded amount of inventory (as per Resto iQ) and the actual physical count during inventory checks. This shows discrepancies or difference between recorded inventory and actual physical count. Factors contributing to a high variance can be clerical errors, theft, misplacement, and supply chain inefficiencies.



      The formula for different columns of the table is the following:

      ‣ Beginning Count ➕ Purchase ➖ Sales ➕ Transfer ➕ Adjustment ➕ Production Yield ➖ Product Usage 🟰 Theoretical Count
      ‣ [(End Count ➖ Theoretical Count) ➗ (End Count)] ✖️ 100 🟰 %Variance


      Beginning Count: this is the beginning count for the period. Example, if the date range for the report is June 1 to June 30, then the beginning count for June 1 is the amount counted for the report.

      End Count: this is the end count for the period. In the example above, this is the end count dated June 30.

      Purchase: this is the sum of purchased inventory items (quantity) for the date range of the report.

      Sales: this is the amount (quantity) sold via the POS relative to the date range of the report.

      Transfer: this is the amount transferred to or received by the location for the date range of the report.

      Adjustment: the amount (quantity) adjusted using the inventory adjustment module of Resto iQ for the date range of the report.

      Production Yield: this is the amount produced by the location in creating the inventory item (for the date range of the report).

      Theoretical Count: assuming perfect efficiency, this is the maximu amount that should be present upon stocktaking.

      Variance: this is the difference (in %) between the theoretical count and the actual count. The lower (%), the better. Industry standard variance should be no more than 3%.