What is COGS
The cost of goods sold or simply COGS is one of the most important metrics that you need to look at when building a restaurant. COGS is what you pay for your food and drinks over a certain period, which is usually a month, but can also be calculated by a week, quarter or year. Bigger operations may look at this once a month, but smaller restaurants need to keep up with this metric once a week.
What can a high COGS mean? It could mean that your cooks aren’t using proper specs or that there is theft going on. The only way you can put a stop to this is to watch you cost of goods sold. You need to also watch for your distributor raising prices, which will happen often, so always look at your invoices and make sure everything looks right.
Calculation
Beginning Inventory + Purchased Inventory – Final Inventory = Cost of Goods Sold