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



Create your Inventory Vendors


Vendor records can be created via the R365 Setup Assistant, the Import Tool, or Manually.



To manually create a Vendor, hover over 'Vendor' on the top ribbon and select 'New Vendor'. A blank Vendor record will open in a new tab.


Complete all the required fields on the Vendor record as outlined on the Vendor record article.  



Vendor Entry Type



Your Inventory Vendors will need a specific setting updated in order to be used with Items in R365.  On the Vendor record, navigate to the 'Vendor Additional Info' tab and locate the drop-down field labeled 'Entry'.  This field can be set by one of two ways:

  • ‘by Account’ - This is the default value and will display the 'Account Grid' on the AP Invoice.  This should be used for Vendors that are not invoiced by Item, but are invoiced to specific GL Accounts (by Account)
  • ‘by Item’ - This is the secondary option and should be used for Vendors that are invoiced by Item.  When selected, the 'Items Grid' will appear on the AP Invoice


Ensure that each Inventory Vendor has the 'Entry' type set to 'by Item' and complete the Vendor creation process. 



Create Inventory & Purchasing Units of Measure


The next step after creating your Vendors is to create the U of Ms that will be used with your Inventory Items. There are various uses for U of Ms in the R365 Operations Module: 

  • Inventory U of M - How you count or report on an Item
  • Purchase U of M - How you receive an Item
  • Yield U of M - How much an Item will Yield in a Recipe
  • Portion U of M - How much is in a single Portion in a Recipe


U of M records can be created via the Import Tool or Manually. 



To manually create a U of M, hover over the 'Item' menu, then the 'Setup' sub-menu and select 'New U of M'.  A blank U of M record will open in a new tab.


U of Ms are used to designate how Items are Purchased and Counted (such as 18oz bottles, Case of 4 gallon cans, lb, OZ-fl, OZ-wt, etc.)  There are 3 Base types of U of M. The Base types are used to help find common denominators to know how one U of M 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
    1.  Base for this type is Each
    2.  Examples: Each, Avocado


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.



1) Name - This name will display when selecting the U of M on a transaction or while viewing reports. This is the only required field if 'Item Costing' is not selected on Preferences

2) Equiv U of M - To create a new U of M, it must have an Equivalent U of M that already exists in the system.  As OZ-wt, OZ-fl, and Each are Base U of M, many of your U of Ms will be equated back to one of these three.  You can equate U of Ms to other U of Ms you have created.  For example: Name = 'Case - 4/750 ML', Equiv U of M = 'Bottle - 750 ML', Equivalent Qty = '4'.  As 'Bottle - 750 ML' would have already been created and equated back to OZ-fl, the system can calculate how many OZ-fl there are in our new U of M 'Case - 4/750 ML'.  For more information on U of M Equivalence, see the training on U of M Equivalence

3) Equivalent Qty - The value in this field is directly correlated with the value in the Equiv U of M field and describes the quantity of our Equivalent U of M in our New U of M.  Using our previous example we had an Equivalent Qty of '4'.  That told the system that there are '4' 'Bottle - 750 ML' in our new U of M of 'Case - 4/750 ML'.  For more information on U of M Equivalence, see the training on U of M Equivalence

4) Container - Optional text field to designate container type, such as box, case, sack, etc.

5) Packsize Descrip - Optional text field to describe pack size

6) 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:

  • Note: The Equivalence helps the system determine how a U of M relates to another. To set this up, specify an Equivalent U of M and Equivalent Qty. 


U of M Example:

The default U of M 'OZ-fl' exists in the system, but ‘Cup’ does not.  When setting up the U of M for ‘Cup’, you would specify the following:
  • Equivalent U of M = OZ-fl
  • Equivalent Qty = 8 
The Equivalent Qty is set to '8' because a Cup contains 8 fluid ounces. 

A U of M can only be set as equivalent to a U of M of the same Base type. So you wouldn’t be able to say lb = 16 OZ-fl because 'OZ-fl' is Volume and 'lb' is Weight.  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 Purchased Item record has fields to specify how Weight and Volume (and Each) relate to each other for that specific item. These fields are the U of M Equivalency



Create Items


The next step after creating your U of Ms is to create the Items that will use the U of Ms.  There are three types of Items in the R365 Operations Module: 


For the purpose of this training article, the process for creating Purchased Items will be explained here. Review the training articles for Recipe Items and Sales Items to learn how to create them in R365.


 

Purchased Item records can be created via the Import Tool or Manually. To manually create a Purchased Item, hover over the 'Item' menu on the top ribbon and then the 'Setup' sub-menu and select 'New Purchased Item'. A blank Purchased Item record will open in a new tab.



General Tab



1) Name* - Enter the Name for the Purchased Item as it will appear throughout R365.  Purchased Item Names should be unique, but it is not required

2) Type* - This value is read-only and cannot be modified.  It identifies the Item as a Purchased Item

3) Catering Item Checkbox - Check this box if this Purchased Item will also be available for sale on Catering Menus in the Catering Module.  When checked, the 'Catering' tab will appear on the Purchased Item record.  Click here for more information on how to setup Purchased Items as Catering Items

4) Number (optional) - Enter a Number value for the Purchased Item.  This value can be useful for filtering and sorting purposed in the 'Items' list.  All alphanumeric characters are accepted in this field

5) Description - Enter a description for the Purchased Item.  Similar to 'Number', this value is available on the 'Items' list

6) Commissary Item Checkbox - Check this box if this Purchased Item will also be available for ordering on a Commissary Order in the Commissary Feature.  When Checked, the 'Sales' tab will appear on the Purchased Item record.  Click here for more information on how to setup Purchased Items as Commissary Items

7) Available in AR Invoice - Check this box if this Purchased Item will also be available as a Sales Item on the AR Invoice.  When Checked, the 'Sales' tab will appear on the Purchased Item record.  Click here for more information on how to setup Purchased Items as Sales Items

8) Active Checkbox - This box is checked by Default and indicates that this Purchased Item is Active in R365 and can be selected on AP Invoices, and counted on Stock Counts.  When an Item is discontinued, uncheck this box to remove the Item from Item Selectors throughout R365

9) Actual as Theoretical Checkbox - Check this box to us the Actual Usage for this Item in place of the Theoretical Usage (via Recipes mapped to Menu Items) on the AvT Report

10) Select Recipe Image Button - This button is not applicable to Purchased Items and is only used on Recipe Items

11) Upload File Button - Attach a file to the Purchased Item record using this button



Inventory Cost Tab


 


1) Cost Account* - Select the GL Account where the Costs associated with this Purchased Item will be recorded (on AP Invoices, Stock Count Inventory Adjustments etc.)

2) Inventory Account* - Select the GL Account where the Inventory Asset Value associated with this Purchased Item will be recorded (on AP Invoices, Stock Count Inventory Adjustments etc.)

3) Inventory U of M* - Select the Primary Reporting U of M for the Purchased Item.  Click here for more information on U of Ms

4) Inventory Cost - this field will contain the Cost associated with the Inventory U of M and will be updated based on the Cost Update Method set on the 'Purchasing' tab

5) Count U of M 2 - Set a secondary Count U of M for the Purchased Item.  Additional count units of measure allows you to count by multiple U of M during a Stock Count

6) Count U of M 3 - Set a tertiary Count U of M for the Purchased Item.  Additional count units of measure allows you to count by multiple U of M during a Stock Count

7) Waste Account - Select the GL Account that you want to Debit upon entering a Waste Log

8) Acceptable Theoretical Variance % - This value is currently a placeholder for future development around the AvT Report

9) Item Cost Graph - As this Purchased Item is purchased over time, this graph will display each the price at time of purchase in a running line



Purchasing Tab:



1) Default Purchase U of M - This is the default Unit of Measure for this Purchased Item and will automatically appear each time the Item is selected. It represents the most common way the Item is received

2) Cost Update Method - The Inventory Cost value on the Inventory Cost tab is updated based on this setting. Options include:

  • Auto Update from Invoice - R365 will use the Item Cost on the last approved Invoice as the Inventory Cost
  • Auto Update Average Last 3 Invoices - R365 will average the Cost from the last 3 approved Invoices as the Inventory Cost
  • Manual - No Cost updates will be made by R365. The Inventory Cost value must be manually updated. This option is rarely used

3) Par Qty - Currently Informational Only

4) Brand - Currently Informational Only

5) Yield Percent - This value is currently a placeholder for future development for using Recipes and Reporting



Item Category Tab



Item Categories are used for sorting, classifying, and reporting on your Inventory.  It is recommended that each Purchased Item receive a 'Item Category 1' and (if necessary) a 'Item Category 2'.  'Item Category 3' is used much more infrequently, but does have a useful application depending on the specific Purchased Item.  Click here for more information on Item Categories



U of M Equivalence Tab 



This tab is used for Purchased Items where different U of M Base types are used on the same item. The Base types are Volume, Weight, and 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.


Click here for more information on U of M Equivalence




Create Item Locations


The next step is to create Item Locations for your Items.  Item Locations allow you to track the cost of your inventory by Location, or rather, each Location will have a different cost value for each Item.  This is extremely useful if you have costs that vary significantly from one Location to another.  


Item Location records can be created automatically on the Purchased Item record, via the Import Tool, or Manually.  


Auto-create


To auto-create Item Locations, open a Purchased Item record that has previously been saved, then navigate to the the 'Item Locations' tab and click the 'Create for all Locations' toggle.  An Item Location record will be created for each Location in your R365 database.  You can manually delete un-needed Item Locations by clicking the trashcan icon on the respective Item Location row.




Manually Create



To manually create an Item Location, hover over the 'Item' menu on the top ribbon and then the 'Setup' sub-menu and select 'New Item Location'. A blank record will open in a new tab.


Refer to the Item Locations article for more information about Item Locations.



Create Vendor Items


The final step in getting Item Costing up and running in R365 is creating Vendor Items.  These records represent the Items you purchase from specific Vendors.  Purchased Items can be considered 'Master Items', or Parents, while Vendor Items are the Child.  Every Vendor Item must correlate directly back to a Purchased Item. Vendor Items have a Many to One relationship with Purchased Items, as shown below:




Vendor Item records can be created during AP Invoice Entry, via the Import Tool, or Manually.  Refer to the Vendor Item article for more information on how to create Vendor Items via AP Invoice Entry.


To manually create a Vendor Item, hover over the 'Item' menu on the top ribbon and then the 'Setup' sub-menu and select 'New Vendor Item'. A blank record will open in a new tab.


Refer to the Vendor Item article for more information about Vendor Items.