Obtain Benefits Quickly from COGS-Well

Overview:

Benefits from COGS-Well can be achieved quickly and easily via a few key features. These features do not require a lot of time or effort to implement. This article will identify six features you can implement immediately in COGS-Well to receive fast and significant benefits.

Six Impactful Features that are Fast & Easy to Implement:

1. Invoice Scanning and Upload:

Whether you are scanning and uploading invoices via Invoice+ or Ottimate (Plate IQ), inventory control starts with scanning and uploading invoices. The benefits from such a relatively simple process are numerous:

The Benefits of Invoice Scanning are:

Invoice Processing is automated. The invoice images from each restaurant are converted to digital and automatically exported to COGS (with invoice images). No manual entry is required.
Accounts Payable processing is automated. The invoice images from each restaurant are converted to digital and can be exported (with invoice images) to your Accounts Payable system. No expense coding or manual entry is required.
COGS-Well imports the inventory line item detail from scanned invoices. COGS-Well automatically adds new items to your database. It also uses AI to assign standard pack sizes, count units, and recipe unit configurations to each new item. Then our receiving audit team reviews each item to ensure the item information is complete and accurate.

2. Inventory Counts:

Inventory Counts is a core feature in COGS-Well that can be implemented immediately after your Initial System Setup is complete. The inventory counts features provide a method for recording ending inventory counts and then determining the value of that inventory count. Please click this link for more information on Inventory Counts.

The benefits of Inventory Counts are:

Counting inventory enables you to determine the value of your inventory on hand, your actual usage for each inventory item, and your actual Cost Of Goods Sold (COGS). Your COGS is a more accurate measure of your performance versus only tracking purchases.
With COGS-Well, counting inventory is made easy via the Count Worksheet, or using a tablet device to record inventory counts.
With COGS-Well, counting inventory is also made easy due to the ability to count Full Packs and Partial Packs (or both). For example, If you have one Pack of 12/750 mL and 7 bottles, you can record 1 Pack and also record 7 bottles, and avoid needing a calculator.
With COGS-Well, counting inventory can be made even easier if you set up and assign your items to Storage Locations. This enables "shelf-to-sheet" counting capability.
If you are already counting inventory, then counts and valuations done in COGS-Well are normally more accurate. This is because new inventory items are automatically added to your database, our auditors review the items, and the costs for existing items are automatically kept up to date in COGS-Well.
Inventory valuations or adjustments can be reported in a Journal and then be manually entered or exported into your General Ledger.
Periodically counting your inventory on hand increases your inventory control. It is a fundamental practice recommended by almost all restaurant accountants.

3. Receiving (Tracking Inventory Purchase History):

Receiving is a core feature in COGS-Well and it is automatically implemented via importing invoices from Invoice+, Ottimate (Plate IQ), or directly from vendors (EDI). Receiving tracks and reports what items you are buying, from which vendors, in what quantity, at what cost, and for any date range.

The benefits of Receiving are:

You can monitor or analyze what inventory items you are buying, from which vendors, in what quantities, at what cost, and over any selected date range. The Receiving by Item Report taps into this detail.
The Cost Alerts Report captures changes in the cost of an inventory item (in dollars and as a percentage) that exceeds your cost alert trigger percentage.
Item Cost Trends Chart: The Item Cost Trend Chart graphically displays the cost trend for an inventory or a combined item over a selected period.

4. COGS (Cost of Goods Sold) and Inventory Usage Analysis:

When Inventory Counts and Receiving are combined, you can calculate how much inventory you are using (in detail or summary) and what your cost of goods sold (COGS) is. Purchases alone do not reflect your actual inventory usage or your actual Cost Of Goods Sold (because some of what you purchase is still in stock at the end of a period). Beginning inventory + receiving - ending inventory = Actual Inventory Usage and Cost of Goods Sold.

The benefits of knowing your Actual Inventory Usage and COGS are:

The Actual Usage Report will tell you how much of each inventory item you used over a selected date range.
The Journal Adjustment Report summarizes your COGS at the GL Account level for transfer to your General Ledger. It provides you with a more accurate cost of sales than using purchases because it will give you credit for the inventory or prepared recipe items you have in storage at the end of a period.
The Actual Cost of Sales Report enables you to report your inventory category and department costs in dollars and as a percentage of sales. This report can be summarized or include item detail.

5. Count your Prepared Items:

Many restaurants have inventory tied up in what we call "Prepared Items". Examples of prepared items are; tubs of vegetables that have been prepared for use, sauces prepared in bulk, meat or seafood portions cut in advance, salad dressings made in batches, soups made in batches, etc.

The inventory items that are ingredients in these prepared items are included in your purchase costs and if you only count raw inventory items at the end of a period, you will not get credit for the unused inventory items that are still in stock, but in Prepared Items.

In COGS-Well, you can create recipes for your Prepared Items and flag them to be included as items that you count in inventory. We recommend that you do this for more expensive Prepared Items you often have in stock at the end of a period.

The benefits of counting prepared item recipes are:

Get credit against your cost of goods sold for work in process (the value of Prepared Items that are on hand at the end of a period).

6. Menu Modeling:

Menu Modeling requires creating a recipe (adding the ingredients) for an item that you sell on your menu (a "Sales Item" in COGS-Well). Sales Items (item name, category, and retail price) are automatically created in COGS-Well when they are imported from your POS system.

Menu Modeling can be done for any Sales Item once you have added a recipe for that item. The cost for the item will always reflect the most recent invoice cost for the ingredients. The cost is also shown as a percentage of the retail price. A target cost percent can be modeled to determine the suggested retail price. Ingredients or ingredient portions can be adjusted to model the impact on costs.

The benefits of Menu Modeling are:

It can be done for new or selected sales items only. You don't have to create recipes for every menu item that you sell.
Price your menu items more efficiently and/or, model using different ingredients to reduce the cost.
Once you build a recipe, the menu item cost will always stay up to date as ingredient costs change.

Summary of Fast & Easy Benefits:

The invoice automation and inventory control benefits (benefits 1 through 5 listed above) are available immediately after COGS-Well provides you with credentials to access your system. On average, practicing inventory control can reduce your COGS as a percentage of sales by 2-3 percent.

It is not necessary to create recipes for all of your Sales Items to start benefiting from recipe costing. You can create recipes for your more expensive Prepared Items and start counting them. You can also build recipes for your new or most popular Sales Items and model their cost and profitability.

If you have questions or other needs, please don't hesitate to reach out to suppor@cogs-well.com or log in to our Help and Learning Center. We also have Tips & Tricks articles that can help you discover more ways to optimize your benefits.