Purchases to sales: the live foodcost

I fully believe that it is critical for your restaurant to close each month with a full inventory and accurate foodcost numbers. We all hate doing it, but this is a business. With that said you can get a good idea of the effectiveness of your cost control program by calculating your purchases to sales foodcost at least once a week. This number will let you know how close you are to your budget and what adjustments you need to make to hit your goals.

There are two ways to calculate this. One is to use a program like Chefstat which will calculate your running foodcost automatically. The other is the good old fashioned method, with a calculator. To calculate this number simply add up your total sales for the month (sales) and your total purchases for the month (purchases). Then divide your purchases by your sales and multiply this number by 100 to get your percentage.

Example: purchases($8,993) / sales ($29,605) = foodcost (0.3037) x 100 = 30.37%

Factors to consider
Keep in mind that this number is not going to be as accurate as when you calculate your inventory. It is more of a quick peek at the overall health of your restaurant.

One key is the more stable your inventory the more accurate it will be. You need to consider the fact that any large purchases (like say you bought 200 pounds of frozen lamb racks on special) are going to throw this number off.