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.
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:
Create your Inventory Vendors
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
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.
- Base for this type = OZ-fl
- Examples: OZ-fl, cup, gal, quart
- Base for this type = OZ-wt
- Examples: OZ-wt, lb, kg
- Base for this type is Each
- 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
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.
Equivalent U of M = OZ-fl Equivalent Qty = 8
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:
- Purchased Item - The main Item record that represents the Inventory purchased from your Vendors and counted on Stock Counts
- Recipe Item - The Recipes that are prepared at your Restaurants. These Items are made up of Purchased Items and other Recipe Items and can be Mapped directly to the Menu Items that are imported from your POS System. Click here to learn more about Recipe Costing in R365
- Sales Item - The Items that are sold to AR Customers on the AR Invoice
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.
Inventory Cost Tab
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
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.
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.
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:
Refer to the Vendor Item article for more information about Vendor Items.