COGS-Well Feature & Function Overview
COGS-Well's Primary Functions:
COGS-Well provides features to help manage and control three functional areas of food service operations: 1) Inventory Control, 2) Recipe Management, and 3) Food & Beverage Cost Analysis. The COGS-Well primary Main Menu Bar is shown below:
The features offered by the Inventory Menu provide setup, transaction entry, listings, and reporting associated with Inventory Control.
The features offered by the Recipes & Sales Menu provide setup, transaction entry, listings, and reporting for Recipe Management and Food and Beverage Cost Analysis.
The Company and Tools Menus provide company setup, configuration, and integration management features for the full system. The COGS-Well support team typically manage the Tools and Company menu features for you.
Please note that your main menu may look slightly different than the above example based on what features you have enabled and whether you are integrating with your accounting system or not.
Benefits:
The primary purpose of using COGS-Well is to increase control over costs, automate processes currently being done manually (or via spreadsheets), and provide new and better insight into your operations.
We summarize these primary benefits as Increased control, Improved efficiency, and New Insights. A summary of the main features that are available within each functional area of COGS-Well is in the diagram below:
Inventory Control:
Inventory Control tracks your purchases, manages your invoices, values your inventory counts, manages transfers (if you do transfers), tracks cost trends, calculates your inventory usage, and determines your Cost of Goods Sold (COGS).
Inventory includes features for ordering, receiving (invoices), transfers, physical counts, and commissary management. Below is an overview of the key processes and features included in Inventory Control:
Invoice Import: Inventory Control begins with importing invoices including the detail for each inventory item on the invoice. We can import invoices from Plate IQ, directly from vendors who can export invoices, and via our Invoice+ scanning software.
We use imported invoice information to set up your initial system database. This information includes your GL Accounts, Vendors, Inventory Items, and Inventory Categories. We add configurations to your inventory items for pack size, counting units, and recipe units automatically using our Standard Packaging Definitions library.
COGS-Well will import invoices on an ongoing basis (we call this process "Receiving"). If you receive new items on an invoice, our team of auditors is alerted and they ensure the information about a new item is accurate and complete. This service is called, "Receiving Audit Service", and it will save you time and increase accuracy.
You can elect to export invoices to your accounts payable system. They will be automatically coded to the correct GL expense accounts and invoice images can be included in the export. So the easy task of scanning and uploading vendor invoices can update your inventory and your accounts payable!
Ordering: Ordering is an optional feature where orders can be entered and sent to vendors. An order can later be compared to the invoice for reconciliation. Ordering includes options to create par levels and/or projected usage so that suggested order quantities can be calculated. Please click this link for more information about Ordering - FAQs.
Receiving: As mentioned above, Receiving is our process for automatically importing and auditing your ongoing invoices. Receiving includes in-depth reporting on what items you are buying, in what quantities, at what costs, and from which vendors.
COGS-Well uses artificial intelligence to assign a standard pack size, count unit, and recipe unit configuration to every new inventory item you receive. We then audit those assignments to make sure they are complete and correct. This means COGS-Well manages your inventory database for you which will save hours every week and improve accuracy.
Item cost trends and alerts to significant price changes are also generated by Receiving. Receiving also automatically updates the costs of items used as ingredients in recipe items so your recipe item costs are always current as ingredient costs change.
Transfers: The Transfer features are for managing and accounting for transfers of inventory or recipe items from one location to another. The transfer features include the option for requesting, fulfilling, and approving transfers so it is a valuable tool for managers that they grow to rely on.
Transfers adjustments can be exported to your General Ledger to increase the timeliness and accuracy of tracking transfers so it becomes a valuable tool for your accounting team. Please click this link for more information about Transfers - FAQs.
Inventory Counts: The Inventory Counts features are for recording inventory counts and reporting the value of the counted inventory. Inventory counts can be recorded on a "Count Worksheet" or a "Mobile Device (Tablet)".
Inventory Count Reporting (Extensions) can be done by item, category, and department. Period-end inventory adjustments are reported with credit and debit balances and can be automatically exported to your General Ledger.
Actual Usage and Cost of GOODS Sold (COGS): By tracking inventory counts, receiving, and transfers, COGS-Well will calculate and report your actual inventory item usage and your Cost of Goods Sold (COGS) for each period. Cost of sales calculations can be done using a weighted average or last case cost.
Commissary Management: COGS-Well also includes (no added fees) specialized features for Commissary Management that can be enabled in your Company Settings. For more information please click this link to Commissary Features - FAQs.
Recipe Management:
Recipe Management enables you to create recipes (define the ingredients and portion sizes) for your prepared and sales item recipes. The ingredient costs for recipe items are continuously updated as invoices for the ingredients are received. Below is an overview of the key features included in Recipe Management:
Recipe Items: Recipes (the ingredients and their portions) can be created in COGS-Well for items that you prepare in bulk such as soups, salad dressing, and sauces (called Prepared Items); and for items that you sell via your Point of Sale system (called Sales Items). Sales Items are automatically added to your database when we interface with your POS system.
COGS-Well provides flexible recipe units and a recipe unit library to make recipe creation and maintenance of recipes easier. Onions can be used by weight in one recipe, by cup in another, and by each in still another recipe. Quantities can be entered in metric or standard measure types. Once recipes are created, their ingredient costs will be continuously updated via invoice Receiving.
There is no requirement to create recipes for all of your Prepared or Sales items or to enter every ingredient for each Recipe. This article on getting a Fast & Easy ROI explains the options for creating recipe items in more detail.
Count Prepared Items in Inventory: Prepared Items such as sauces, meat or seafood portions cut and stored in advance, salad dressings, soups, salsa, etc., that are in stock (unused), usually represent a large cost/value. This is because the inventory items that are ingredients in these prepared items will be included in your purchase costs.
COGS-Well allows you to count Prepared Items as part of your inventory count process. If you count Prepared items then you will get credit for the value of the ingredients that are in prepared items that are still in stock.
Preparation Instructions: COGS-Well includes an option for adding Preparation Instructions to recipe items. Preparation instructions can include pictures, steps, descriptions, and equipment. This information can then be used by food preparation and/or online production staff. An additional benefit is the ability to leverage one system as a recipe book and a recipe costing solution.
Recipe Versioning: Recipe versioning allows you to modify an established recipe to a new version while saving the prior version. You can also indicate the date the new version will go into effect. When you run reports for a date range that overlaps multiple recipe versions, the theoretical cost and usage will be adjusted to reflect what version was in effect on what dates.
Menu Modeling: Sales Items are imported directly from your POS system (item name, sales category, and price) into COGS-Well. If you add the recipe ingredients to a Sales Item, then target costs and pricing can be calculated for menu modeling. A Target Cost Variance report can be run to see which items are meeting or not meeting your targets.
Production: Production is an option that allows for tracking the quantity ("batches") being made for a Prepared Recipe Item. Production Items are counted in inventory. The purpose of tracking production is to determine the usage of a Production Item such as Chicken Salad. Theoretical usage can also be calculated for a Production Item and actual vs. theoretical usage can be compared for variance.
Preparation Planning: If you have created Prepared Item recipes, and have added them as ingredients to your Sales Items (recipe items that you sell), then the "Prep Worksheet" will suggest preparation quantities for your Prep Items using their theoretical usage history. The worksheet has the option to run for a day or a week.
Food & Beverage Cost Analysis:
Food and beverage cost analysis uses the combination of your Sales Mix (what Sales Items were sold at what price each day) and their recipes to calculate what your inventory usage and costs should be (Theoretical Cost and Usage).
Theoretical Cost and Usage can be compared to Actual Cost and Usage to calculate variances. Menu Analytics are available to help evaluate the Sales Items on your Menu based on profitability and popularity. Below is an overview of the key processes and features included in the Food & Beverage Cost Analysis.
POS Interface and Sales Mix: Each day COGS-Well will import the sales mix (what Sales Items were sold at what price) from your Point of Sale system.
When the number of times each Sales Item is sold is combined with the recipe ingredient portions and cost for that Sales Item, COGS-Well can tell you what your cost, profit, and ingredient usage should be (theoretically) for each Sales Item and your entire menu.
Theoretical Cost and Profit from Sales: The Theoretical Cost of Sales Report determines what your total theoretical cost of sales should be, and what amount of that theoretical cost is coming from each Sales Item based on the quantity sold and the cost of each Sales Item.
The Theoretical Profit from Sales Report determines what your total theoretical profit from sales should be, and what amount of that profit comes from each Sales Item, based on the quantity sold and the cost for each Sales Item.
Menu Engineering: The Menu Engineering Report calculates the popularity and profitability of each Sales Item based on its recipe cost, pricing, and quantity sold. It shows you your best, medium, and poor-performing sales items based on profit contribution.
For example, a Sales Item that is high profit and popular is ranked as a "Star". A Sales Item that is low profit and not popular, is ranked as a "Dog".
Item Cost Trends: The Item Cost Trend Chart graphically displays the cost trend for an inventory item, combined item, or recipe item (sold or not sold), over a selected period. For recipe items, the cost trend for each ingredient is included via drill-down options.
Variances: COGS-Well calculates what your inventory usage should have been (theoretical), and what it actually was (actual), and then determines a Usage Variance. Similarly, COGS-Well calculates what your cost of sales should have been (theoretical), and what it actually was (actual), and then determines a Cost Variance.
Variances can be reported by item, inventory category, inventory department, and total. Variances provide you a benchmark for how you should be performing based on the Sales Items you are selling, their ingredients, and the price you are selling them for. COGS-Well will also calculate the theoretical quantity of an inventory item that should be on hand for comparison to the actual.
COGS-Well System Flowchart:
The diagram below lists the other types of systems that COGS-Well can interface with and what data flows into or out of these systems. Below the other system interfaces, the diagram lists the COGS-Well Main Menu and most of the features or reports accessible from each menu. For an added overview of the Main Menu and the features and options with each Menu, please click this link to COGS-Well System Navigation:
The Big Picture
COGS-Well Other System Interfaces:
Plate IQ Interface: Plate IQ uses OCR technology to convert invoice scans to digital data. COGS-Well imports invoices, including the inventory item detail, from Plate IQ into COGS-Well's "Receiving" feature.
COGS-Well utilizes data imported from Plate IQ to set up your initial database (inventory items, vendors, GL accounts, and inventory categories). COGS-Well also imports invoices on an ongoing basis from Plate IQ.
Invoice+: COGS-Well offers Invoice+ as an invoice scanning solution that will convert the item detail from paper invoices into digital information that can be imported into COGS-Well's Receiving feature. Invoice+ is designed for customers who want the benefits of invoice scanning (versus manually entering inventory item detail from invoices), but don't require the AP Automation or Payment features offered by Plate IQ.
Vendor Interfaces: If a vendor can export digital invoices (often referred to as EDI capability) then COGS-Well can import the invoices with the item detail directly from that vendor in COGS-Well's Receiving feature. If a vendor can export an order guide (catalog) of the items you buy from them, then COGS-Well can import the items to create your starting inventory database. If a vendor can import an order, then COGS-Well can export your orders to that vendor.
POS Interface: COGS-Well can import your sales mix (the number of recipe items that you sell) each day from your Point of Sale system. Recipes that are sold are referred to as Sales Items in COGS-Well. If a new sales item is imported, then COGS-Well automatically adds it to your database. For your initial setup, COGS-Well imports and creates your starting sales item database automatically.
General Ledger Interface: COGS-Well can export ending inventory values (or adjustments) to an accounting system's General Ledger, in credit and debit balance. If COGS-Well does not import your GL Accounts from Plate IQ, then they can be imported into COGS-Well from your accounting system.
Adjustments for Transfers and/or Production can also be exported to your General Ledger. If you are using the financial features in the POS+ product, then COGS-Well can export financial and statistical values to your General Ledger, in credit and debit balance.
Accounts Payable Interface: If you are not already posting invoice information from Plate IQ to your accounting system's accounts payable, then COGS-Well can export summary invoice information to your Accounts Payable.
Summary:
COGS-Well provides comprehensive inventory control, recipe management, and food & beverage cost analysis. There are also numerous interfaces with other food and beverage systems that are designed to save time and/or add new insights. While COGS-Well offers numerous features, reports, and interfaces, we do not expect our customers to utilize everything we offer.
The reason COGS-Well is so robust is to accommodate different customers with different priorities. The good news is that using just a few features that are fast and easy to implement will normally provide a very good return on investment from COGS-Well. Please see this article for a detailed explanation of how to get a Fast & Easy ROI.