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Why Should You Care about Cost Management for Your Business at this Time?

Updated: Jan 17, 2022

The onset of the pandemic saw most of the operations of several companies go virtual. Business has halved for some companies due to the third wave-led curbs. Such measures have pushed back restaurants to survival mode, halting expansion and staggering supplies.

Cost containment and reduction are back into place as businesses grapple with the uncertainty and a subsequent dip in business. The lacklustre demand during the Christmas and New Year season has also added to the woes of the restaurants and other businesses. Amidst such chaos, generation, collection and analysis of data of your business becomes paramount. By doing so, things are set in place and one can have a clear understanding of the running costs of the business.

Consider the following scenario: Bar A and Bar B are located next door to one another. Both sell around 50 lakhs at the bar each year, but Bar A runs a 30% Food Cost and Bar B runs a 40% Food Cost. Bar A, on the exact same sales with roughly the same client base, will make a lakh more in profits each year! So, why is Bar A making so much more money per year?

To figure this out, not only do we need to be able to calculate our food costs, but also to interpret that calculation. Interpreting food costs is one of the most misunderstood aspects in managing a restaurant—it seems difficult, confusing, and time consuming. But it doesn’t have to be when equipped with a Material Management System. Following are some of the key benefits of employing an Material Management System in your business.

  • Gain Better Clarity of your Accounts Invoiced vendor purchases can be imported directly to your accounting software, providing better clarity between sales and expenses.

  • Lower Your Product Loss By tracking the purchases, inventory and movement of the material, one can better pinpoint the material loss. Hence, business decisions can be taken to minimize those losses.

  • Real-Time Stock Control Through a real-time stock control, one can reduce the chances of overstocking of materials resulting in lowering of spoilage and expirations. In addition, ordering can be streamlined when running low on material.

  • Better Production Planning Forecasting production of semi-processed and processed goods becomes easier. Not only does it make sure production schedules can be met, but it can also save costs for a finished product while also maintaining quality through the materials that are purchased and used.

Want to learn more about Barometer Technologies or the topics discussed in this post?

Click Schedule a Chat to schedule a demo with our team today, to get a more hands-on look at how Barometer is going to help you run a better business.

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