Item Costing is a powerful feature in the Operations Module of Restaurant365.  This document gives a high level of each type of record you must create / update in order to use the many functions within Item Costing



Setup


These five records must be created and used in order to start using Item Costing in the Operations Module.  Click each link to learn more about each record type:

  1. Vendors
  2. Units of Measure
  3. Purchased Items
  4. Item Location
  5. Vendor Items



Vendors


Hover over the 'Vendor'' menu and select 'New Vendor' to create a new Vendor



On the vendor record the dropdown field named Entry can be set to 'by Account' or 'by Item.' If ‘by Item’ is selected then when invoices are entered for this vendor the item detail grid will display, if ‘by Account’ then the account grid will display (note in the item grid entries can still be made by account as item is not a required field).


 


Units of Measure also referred to as U of M.


Hover over the 'Item' menu and select 'New U of M' to create a new Unit of Measure



Units of Measure are used to designate how items are purchased and counted such as 18oz bottle, Case of 4 gallon cans, lb, OZ-fl, OZ-wt, etc. There are 3 types of unit of measure. The types are used to help find common denominators to know how one unit of measure relates to another.
  1. Volume
    1. Base for this type = OZ-fl
    2. Examples: OZ-fl, cup, gal, quart
  2. Weight
    1. Base for this type = OZ-wt
    2. Examples: OZ-wt, lb, kg
  3. Each – base for this type is also Each


The system comes with a pre-set list of standard Units of Measure. If the desired U of M is not in the list then create a new one and set the following fields:


  • Name: This name will display when selecting the u of m on transaction or when viewing on reports. This is the only required field if Item Costing is not selected on Preferences
  • Container: Optional text field to designate container type such as box, case, sack, etc
  • Packsize Description: Optional text field to describe packsize
  • Purchase: This checkbox will determine whether the unit of measure will appear on the AP Invoice as a possible unit for purchases
  • The other 2 fields are associated with U of M Equivalence:
    • The Equivalence helps the system determine how one unit of measure relates to another. To set this up specify an Equivalent U of M and Equivalent Qty. 
      • For example, if OZ-fl exists in the system but ‘cup’ does not then when setting up the u of m for ‘cup’ you would specify Equivalent U of M = OZ-fl and Equivalent Qty = 8 because a cup is 8 fluid ounces. A U of M can only be set as equivalent to a u of m of the same measure type. So you wouldn’t be able to say lb = 16 OZ-fl because fl is volume and lb is weight and while that equation is true for water it isn’t true for other substances like gold (or flour if you don’t have much gold in your restaurant). The item record has fields to specific how weight and volume relate to each other for that specific item so it isn’t set at the global Unit of Measure level. Another example that would work is if you track something in 20lb cases then create a new unit of measure named 20lb Case and set Equivalent U of M = lb and Equivalent Qty = 20.

Items


Hover over the 'Item''' menu and select 'New Purchased Item' to create a new Purchased Item



The Item record has many important fields for item costing. The system has the ability to store Item Location records which have some of the same fields as the item records but can be further defined for specific locations. There are also Vendor Item records where some information about the item can be tracked differently for different vendors. When no Item Location or Vendor Item record exists the information from the Item record will be used. Fields on the item record:


General Tab


  • Name: This is the item name that will display on other forms when referencing this item
  • Number: Optional item number that will display in some reports associated with this item
  • Description: Optional additional description about the item
  • Available to in AR Invoices: Mark yes if this item will be sold to customers and should appear on AR Invoices



Inventory Cost Tab


  • Cost Account: GL Account debited on AP Invoice and on stock counts it is debited if count is lower than previous count and credited if count is higher than previous count
  • Inventory Account: GL account that will be debited on stock count if count quantity is higher than previous count and credited if quantity is lower than previous
  • Inventory U of M: Unit of measure this item will be counted in for stock counts. This is required and very important in order to manage item costs. This can be set for individual locations on the Item Location record if desired
  • Inventory Cost: This is the cost of the item based on the Inventory U of M. This can be set for individual locations on the Item Location record if desired



Purchasing Tab:



  • Default Purchase U of M: This field is required and designates the default unit of measure this item is purchased in. This can be set for individual vendors on the vendor item record if desired.
  • Cost Update Method: 3 options exist for the cost update method:
    1. Manual: This is the default and means the item cost will be updated by the end user either when entering stock counts, or by opening the Item or Item Location record and setting it.
    2. Auto Update From Invoice: Item cost will be updated during invoice entry each time an invoice is entered. This will update the Item Location record if one exists for that item and location combination and if not then it will update the Item record
    3. Auto Update Avg Last 3 Invoices: As the name describes this will auto update just as the Auto method but it will average the 3 most recent invoices instead of just the most recent.
  • Brand: Optional text field to specify brand



U of M Equivalence Tab 



U of M Equivalence section – this section pertains to items where different measure types of units of measure are used for the same item. The types of unit of measure are Volume, Weight, Each. For example, an item might be purchased in gallons but counted in pounds. If so then of U of M Equivalence must be setup for that item. This section allows that by specifying a Weight Qty of Weight U of M = Volume Qty of Volume U of M. An example would be if the item was water then 16 OZ-fl = 1 lb. 


Click here for more information on U of M Equivalence:




Item Location


Hover over the 'Item' menu and select 'New Item Location' to create a new Item Location



Item Locations can be setup to manage inventory costs at a location where the costs are different from other locations. These records aren’t required and if no item location record exists then the values on the Item are used instead. The fields on item location are:


  • Item: Lookup of item record
  • Name: Text field to describe this record (by default will be set as Item Name – Location Name)
  • Inventory U of M: Lookup of u of m record this location counts this item in
  • Cost: Cost of this item at this location based on the inventory u of m. This field will update automatically if Cost Update Method on item record is set to Auto Update From Invoice or to Auto Update Avg Last 3 Invoices. If Cost Update Method is set to Manual then this will only be updated by making a change in this window or by changing the cost when entering a stock count.



Vendor Item


Hover over the 'Item' menu and select 'New Vendor Item' to create a new Vendor Item



Vendor Items can be setup to set a few fields for an item for a specific vendor. These records aren’t required and if no item vendor record exists then the values on the item are used instead. In order to import an invoice from a vendor then Vendor Item records are required and if missing then a record will be created during import and the user can finish setting up the record after the import completes. Vendor Item fields are:


  • Item: Lookup of item record
  • Vendor: Lookup of vendor record
  • Vendor Item Number: Text field of the number this vendor references this item by
  • Vendor Item Name: Text field of the name this vendor references this item by
  • Purchase U of M: Lookup of u of m record used as the default purchase u of m for this vendor for this item. U of M can be changed on each individual invoice but this value will be the default
  • Split U of M: Lookup of u of m record used as the split u of m for this vendor for this item. This is only used by some vendors and referenced in their invoice import files