Documentation/ Master records and catalogues/ Recipe costings
Recipe costings: what they are and how to build one
A recipe costing is the breakdown of what a dish or a prepared product costs: what goes into it, how much of each thing, and what that comes to. The application handles the hard part, the price of each ingredient, by taking it from what you have actually bought.
Management › Recipe Costing (AI)
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The recipe's details
| Field | What it is |
|---|---|
| Name | What the recipe is called. Required. |
| Description | Free text. |
| Yield and its unit | How much the preparation makes: two kilos, twenty litres. |
| Portions | How many servings it goes into. The cost per portion comes from this. |
| Selling price | The retail price of a portion. Margin and food cost come from this. |
| Is a preparation | Marks the recipe as usable inside another one, as a sub-recipe. |
Yield and portions answer different questions. Yield says how much the preparation produces; portions, how many parts it is divided into. A sauce might yield two litres and have no portions, because it is not served on its own.
The four kinds of ingredient
Every line on the recipe is one of these four kinds, and the kind decides where its cost comes from:
| Kind | What gets linked | Where the cost comes from |
|---|---|---|
| Product | A particular item from the product master. | The last price paid for that item. |
| Raw material | A raw material category. | The average across the products in that category, or whichever one you pick. |
| Sub-recipe | Another recipe marked as a preparation. | That recipe's calculated cost. |
| Manual | Nothing. | The amount you type. |
The choice matters. Product gives the most accurate cost, because it points at a real item with a real price. Raw material stands up better to a change of supplier, because it does not depend on your going on buying the same reference. Manual is the way out for whatever is not in the system: labour, energy, or an ingredient not bought against a document.
The fields on a line
| Field | What it holds |
|---|---|
| Kind | Product, raw material, sub-recipe or manual. |
| Source | The item, the category or the recipe linked, according to the kind. |
| Description | The ingredient's name as you want it read on the recipe. |
| Quantity and unit | How much goes into the preparation. |
| Wastage | The percentage lost. See the next section. |
| Manual cost | On manual lines only. |
| Line cost | The result, calculated. Not typed. |
Wastage
Wastage is the percentage lost between what you buy and what reaches the plate: the trimmings from preparing something, the evaporation in cooking, the offcuts from a joint. It is given as a percentage and takes values from zero to ninety-nine.
Its effect on cost is direct. If only seven hundred grams of a kilo are usable, the real cost of those seven hundred grams is the cost of the whole kilo. Ignoring wastage understates the cost systematically, and on products with a lot of waste the difference is large.
Wastage goes on the line, not on the product: the same item can have different wastage depending on the preparation.
Where each line's cost comes from
Each line shows the source of the cost it used:
| Source | What it means |
|---|---|
| Delivery note | Taken from the last price received for that item. |
| Manual | You typed it. |
| Sub-recipe | It comes from another recipe's calculated cost. |
And where it could not be worked out, the line says no cost resolved. That is the warning to act on: while there are unresolved lines, the costing's total is incomplete.
There are three usual causes: the item has never been bought, the raw material has no product with a price, or the document's unit does not match the recipe's.
Choosing a raw material's cost
Where a line is a raw material, the application can take the average across all the products in that category. A button lets you choose the cost and see the candidates: each product with its last price, its unit, the date of the document it came from and its cost per base unit.
If the units are not consistent, the screen warns you that the products' units are not consistent or prices are missing, that the average is a rough guide only, and that you should pick a particular product.
Take that warning seriously. Averaging the price of something bought by the kilo with something bought by the case gives a meaningless figure. Pick a particular product.
Products whose unit is not recognised are left out of the average, and the screen flags that on the row itself. If none of them has a price, it says so outright.
Sub-recipes: nested costings
A recipe marked as a preparation can be used as an ingredient in another. That is what lets you build a real kitchen's structure: a base sauce that goes into five dishes is costed once, and its cost carries through.
Two rules:
- A recipe cannot be used as a sub-recipe of itself. The application stops you.
- A recipe used by another cannot be deleted while it is still linked: it tells you the recipe is used as a sub-recipe of another and has to be unlinked first.
When a sub-recipe's cost changes, the recipes that use it have to be recalculated to pick the new value up.
Updating costs
The calculation is not continuous: you set it off. There are two actions, and the difference matters:
| Action | What it does |
|---|---|
| Update costs | Recalculates from what is already saved. |
| Save and update costs | Saves the changes and then recalculates. |
On a recipe with unsaved changes, the application tells you to save the recipe before updating costs. And a recipe that has not yet been calculated shows as pending.
Worth recalculating fairly regularly, at least when seasonal prices change, because the costs reflect what was bought up to the last recalculation, not what was bought today.
Things that come up
| What you see | Why | What to do |
|---|---|---|
| It will not save the recipe | The name is missing, or there is no ingredient line. | Fill the name in and add at least one ingredient. |
| It warns of lines with no product or no category | Some lines are of a kind that needs a link, and none has been chosen. | Fill in those lines' source, or change them to manual. |
| A line ends up with no cost resolved | The item has never been bought, or its unit is not recognised. | Choose another product, or put a manual cost in. |
| The total cost looks low | Wastage is missing, or there are unresolved lines. | Go over the wastage line by line and the lines with no cost. |
| A recipe will not delete | It is used as a sub-recipe of another. | Take it out of the recipe that uses it and try again. |