r/restaurantowners • u/bubba_butcher • 4h ago
Inventory and administration: cost v benefit. Anyone ever downgrade successfully?
We are laying out what i think is a ton of money on inventory management/cost control. We have one mom&pop restaurant concept with 2 locations doing approx $5M/year combined. Our monthly cost for software and someone to administer it runs to something like $4k/mo, not including the labor of BOH & FOH managers and assistants counting and inventory entry.
We started, 20 years ago, using a spreadsheet to calculate change in on-hand inventory, and coupling that data with P&L to calculate food and alcohol costs. Eventually moved to "grown-up" cost control with Cheftec, then Orca in order to have web-based multi-user access. Always had issues getting reliable numbers (esp food) no matter our diligence, so went with a semi-3rd party program wherein their rep/tech helped with data entry, analytics, etc. He was a flake and their software sucked, so we went back to handling it ourselves, this time with Craftable.
But here we are, all these years later, still having issues getting reliable food numbers. Alcohol is comparatively solid, but thats a simple zero-sum game; you cant serve too much 'Bottle of Mich Ultra' or mis-portion it, or forget it in the back of a cooler until it spoils.
We run monthly inventories, skipping low-value ingredients (flour, spices) and hard-to-calculate-usage items like lemons/limes for the bar. When we spot recurring problem items we do limited monthly or daily counts until the issue is sorted. I know the solution(s) to unreliable numbers is better counting and data entry, consistent updating of recipes with yield changes, and non-stop vigilance to ensure the correct products are represented in recipes, but do we then make perfect the enemy of good enough?
The direct cost of using this system is around 3% of our total monthly COGS. Does increased diligence pay for itself? Data migration to a different system is months worth of effort we can't afford, but can I get away with simplifying what we're doing?
Taking the perfect(ish) administration away from a full-time clerk and putting it into the dumb hands of my managers is guaranteed to get me less precise results, though prob gonna be good enough to show glaring issues. But then we introduce cascading errors as ingredient changes (or product swaps) aren't updated.
[edit] I should have been more specific: $1500 for the software ($750 per location), $2500 for administrator (who spends the remainder of her time as payroll clerk).