Jeremy Julian

3 Ironclad Ideas to Monitor Your Food Spend

January 18, 2017

Control Food Spend - The Restaurant Technology Guys


What keeps your restaurant in business?

You might think it’s your staff. Or the signature dishes on your menu. Or those loyal customers that walk through the door every Friday night.

It’s not any of those things, though. What’s keeping you in business is money… plain and simple.

And in the restaurant industry, the amount of money you bring through the door is small compared to the amount you see going out. One of the biggest bites out of your budget?

Food costs.

In fact, you probably see at least a third of your budget go to food every month. Sometimes it’s more… and you don’t really know why or how it happened. You wind up short of money, scraping by to pay the bills.

Food costs are just one of those things that can’t be ignored. Managing them is just too important to your business.

That’s why we’re revealing these 3 sure-fire ways to monitor your food spend… without all the hassle.


#1 Track Supplier Spend

Do you know how much money you’re spending with each of your suppliers?

… broadliners, specialty, even the local produce guy?

For all of these suppliers, understand how much money you’re giving them monthly, every three months, and every year. Knowing this information is important for two reasons:

  1. If spend goes up compared to the previous time period, you can dig into the numbers to see whether you ordered a lot more from the supplier… or whether the supplier increased prices without you knowing it.
  2. The more you spend with a supplier, the more business they’ll want from you in the future.

Both of these reasons give you leverage with your suppliers. If a supplier is increasing prices without your knowledge, it’s imperative you have a conversation with your rep to recitfy the situation. As a loyal customer, you should be first on a supplier’s list of people they want to make happy. Using this tactic alone can save you hundreds of dollars on food spend.


#2 Look at Ingredient-Level Spend

If you’re a bar, you probably spend thousands of dollars on chicken wings. It’s a staple for your business. And if those prices on chicken wings go up even a little – say $1 – you’re hundreds of dollars in the red.

Unfortunately, this is more of the norm than the exception. And because you’re not looking at those individual ingredient prices on a weekly basis, you don’t know you’re spending is out of control until the bill comes at the end of the month.

Tracking ingredient-level spend isn’t that hard, though. Just follow a couple of steps:

  1. Start by tracking the top 20 items by volume that you’re spending money on. Have these increased and by how much?
  2. Look at the top 10 items that are important to you, e.g. for a pizza place it might be tomato sauce and mozerella cheese. Have these increased and by how much?
  3. Now check what other vendors are charging for these same items. Is it more than what your current supplier is charging you?

Once you have these details in hand, you can go to your supplier and negotiate better prices. In fact, there’s a whole strategy and process for doing a quarterly business review with your suppliers. And by asking for price relief in these areas, you can save thousands of dollars a quarter on your food spend and increase the money you have on hand.


#3 Take a Regular Inventory

Did you know that restaurants who take regular inventory can increase profits by up to 24% a year?

That’s right… proper inventory management with an eye toward limiting food waste can stretch a significant portion of your budget. And by taking a regular inventory, you can catch the 75% of your employees who steal from you.

Not only do restaurants who take inventory avoid theft and waste… but they increase the efficiency of their restaurant operations. This is because when you take a regular inventory, you understand your Cost of Goods Sold, days on hand, used by date and other important numbers.

This information will tell you if something’s off… if you’re ordering too much of one item and it’s going to waste… or if an employee is stealing from you. Correcting these two issues alone can save you hundreds a month. And that’s money you can re-invest into your business… to make sure you can always make ends meet.

There’s An Easier Way

Even though following these 3 steps will do wonders for controlling your food spend, the truth is that you don’t have a lot of time on your hands to get them done.

Running your restaurant keeps you plenty busy, so keeping up with spreadsheets to track prices and take inventory is nearly impossible. Just going through your invoices takes at least 9 hours a week and inventory takes another 12.

So how do you control your food spend when you’re strapped for time?


There’s been a veritable renaissance of restaurant technology over the past 5 years that’s giving restaurant businesses the tools they need to track their food spend. Technology automates back office processes that suck up valuable time… processes like inventory, invoicing and accounting. In fact, thanks to this technology, the manual, outdated processes that would eat up so much of your time tracking food spend… are largely disappearing.

The best part? These restaurant software and apps are easy to use, take little-to-no-time to set up, and cost next to nothing.

With food and labor costs increasing and overall industry profits shrinking rapidly, you have no choice but to keep a close eye on food costs. The competition is just too fierce and the market too volatile not to.

And ultimately, it’s what will keep your restaurant in business.



This guest post was written by Joy Ugi, Director of Marketing at Orderly. Joy’s passion for digital marketing is only matched by her enthusiasm for helping restaurants as the marketing jack-of-all-trades at Orderly, the #1 restaurant app for invoicing & inventory. She roots for the NY Giants, loves craft beer, and is addicted to sunshine.

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