1. Help Center
  2. Food & Recipe Costing

Food cost calculation

APICBASE offers you the ability to analyse your food cost in depth with its food cost and margin calculation tools. The food cost tools in APICBASE are very powerful, allowing you to define not just your ingredient cost, but also wastage, personnel/production cost and finally it shows you a nice break down of the full prime cost. This article explains how to use this on a recipe level, but the feature is also available on menu level. Go here to create a menu

How to get there?

To get an overview of the financial aspects of your recipes, follow the steps below:

  • Go to the recipe you want to analyse.
  • Click on the ‘financial’ tab in the recipe overview.
  • You will now be redirected to a new tab with financial information about that recipe. 

Some general notes

  • The food cost that is displayed here, is always for 1 portion or serving, even when the recipe itself was calculated for multiple portions.
  • Obviously, you need to have filled out a few fields in order for the food cost to work. These items are:
    • Costing of an ingredient
    • Weight/Volume of an ingredient
    • In case you want to calculate the profit margins, you also need to:
      •  Add a sell price to the recipe. To do that, go into edit modus of your recipe and fill out the sell price in the financial panel. To make it easy to you, this is the price including VAT (so what you actually ask to your client). The software deducts the VAT later.
      • Add a profit margin you want to hit, either in settings (library wide), or in the recipe itself, in the financial panel.

 Explaining the different elements of the financials tab

There are three distinct blocks of information available, the next one always building on the previous one:

  • Cost of One Serving
  • Actual Profit based on your sell price
  • Target Cost & Profit based on target margin

 Here is a breakdown of all the different blocks:

Cost of One Serving:

The cost for one serving/portionwill give you a summary of your food cost, personnel cost and combine both into your recipe’s prime cost.

  • The personnel cost is the multiplication of the labour time and the cost per hour. You can define up to three different hour prices in our software, reflected in ‘prepping time’, ‘cooking time’, and ‘plating time’. The labour time is set in the recipe. The cost per hour can be determined in the library settings for prepping, cooking and plating.

    On a side note: as a company, you can decide whether or not you want to use this function. If you calculate your labour time within your margin percentage, just put the hour pricing on zero and they will not have effect on the cost calculation. If you use only one or two distinct prices, you can also leave the second or third hour price to zero.
  • The prime cost, finally, is the sum of the food cost and the personnel cost.

 

Actual profit based on your sell price:

The‘actual profit based on your sell price’ section gives you an overview of the actual margin you’ll be hitting, based on the sell price of your product. If you defined a standard margin for the recipe or your library, it will also give you an insight into whether or not you hit your predefined margin, and the difference.

  • As a reminder, your sell priceis set in the recipe itself. You can edit it by clicking on the ‘edit’ button in the grey toolbar.
  • The VAT percentage can be set as a default VAT percentage in the library settings or filled out in the recipe itself.
  • The Profitis the difference between your sell price and your prime cost.
  • The Actual profit margin is calculated by dividing the profit through the actual sell price (excl. VAT).

 

Target Costs / Profit based on your Target Margin:

The ‘Target Costs / Profit based on your Target Margin’section shows you the difference between your actual sell price / your actual margin and the sell price / margin you ought to set or make.

You can get insights into two different items:

  • your target prime costand profit given the actual sell price and
  • the target sell priceand profit given the actual prime cost.

Simply put, the difference between the two is that in the one your prime cost will be used as a base line, and in the other one the sell price. So, if you have a recipe in which you can’t up the sell price, you can select “Calculate Target Prime Cost” and it will show you the prime cost you ought to make in order to reach the required profit margin.

If you want to know exactly on which price you should actually sell your food in order to hit the margin based on the prime cost of that recipe, you select the “Calculate Target Sell Price”, which will then show you which price you should be asking for the recipe.

Finally, the ingredients overview table gives you an overview of ingredients, pricing and quantity per ingredient and per serving. The number of servings can be changed in the ‘portioning’ tab in the recipe overview. You can edit an ingredient by clicking on the pencil symbol. To see which one is the most expensive ingredient, or the most used one, just click on the arrows in the table header to order them according to your liking.

The financial tab with the food cost calculation is also available on menu level. To read more about creating menus, please go here.