5 Ways to Track Prep Items That Save Restaurants Money

Walk through the back of almost any commercial kitchen, and you'll find inventory that never appears on a menu: trays of diced vegetables, tubs of house-made dressing, five-gallon batches of chicken salad, portioned cuts of protein, pots of simmering stock. Restaurants call these Prepared or “Prep” Items.

Most operators track the ingredients that go into a Prep Item but treat the item itself as invisible once it's made. That gap creates real problems: inflated cost of goods, duplicated recipe work across the menu, and prep quantities based on guesswork instead of data.

Closing the gap on Prep Items takes more than a spreadsheet. A spreadsheet can hold a list of ingredients, but it can't apply a recipe's cost to an inventory count automatically, calculate actual usage against theoretical usage, track waste, or project how much to prep based on predicted usage.

The fix starts with using a restaurant cost control system that adds recipes and tracks your most impactful Prep Items. Doing this unlocks five core benefits.

Get Credit for Ingredients You Haven't Used Yet

The ingredients that go into a Prep Item are already reflected in your purchase costs — they hit your cost of goods sold (COGS) the moment you buy them. If a batch of chicken salad sits half-used in a cooler at the end of the period, the chicken, mayonnaise, and celery in that batch have already counted against your COGS, even though the ingredients haven't been used yet.

A cost management system should give you the option to count a Prep Item as part of your regular inventory count once you create a recipe for it. The value of the Prep Item gets applied to your ending inventory valuation, based on its current ingredient costs, which reduces your COGS by giving you credit for the value still in inventory. Your theoretical usage for each ingredient is also given credit. 

Build the Recipe Once, then Reuse it Everywhere

A Prep Item recipe isn't just useful for inventory counts — it's also the foundation for every menu item that uses it. Once you've entered the ingredients and batch size for a five-gallon batch of chicken salad, you don't have to re-enter chicken, mayonnaise, celery, and seasoning every time you build a recipe for a chicken salad sandwich or side order that uses it. And its cost as an ingredient is automatically always up to date.

This also eliminates a tedious, time-consuming process. It means a single price change to an ingredient — say, chicken — automatically flows through the Prep Item recipe and every menu recipe built on top of it, instead of requiring updates in a dozen places.

Track Prep Item Production

A cost management system should include an option to track the quantities of Prep Items you prepare so it knows the quantities that should be on hand at any time. Sophisticated systems like COGS-Well also provide an option to treat a prep item as a “Production Item”.

A Production Item will deplete its ingredients when the quantity produced is entered. It will also convert the Prep Item to an Inventory Item. Once it is an Inventory Item, the actual and theoretical usage can be tracked for the item versus its ingredients. The item can also be transferred as an inventory item to another location – an excellent option for commissaries or central kitchens producing recipe items for other locations.

Understand Prep Item Waste

Because many Prep Items are made in large batches — and are built from fresh, perishable ingredients — Prep Item waste is where a lot of unnecessary cost hides. A five-gallon batch of hollandaise sauce or a tray of trimmed vegetables that go bad before being used isn't just wasted food; it's wasted labor and ingredient cost that show up in your COGS without being identifiable.

If you've created a recipe for a Prep Item, you can record it in a waste count in most cost management systems. This will adjust the calculated quantity on hand. Tracking Prep Item waste over time will also give you a clear picture of which items are wasted most often, and in what quantity — information you can use for better prep decisions.

Take Advantage of Suggested Prep

One question tends to eat up a lot of a prep cook's time: what items do we need to prep today, and how much? Guess too low, and you risk running out during service. Guess too high, and you're throwing food away and reducing your profits.

The best cost management systems can suggest what Prep Items, in what quantity, to prepare each day for the kitchen staff. They should do this based on the quantity on hand, predictive/projected usage, the number of days to prep for, and the shelf life for each item (as shown on the Prep Worksheet below).

Prep Features to Look for in a Cost Management System

Prep Items are easy to overlook and very difficult to manage without a dedicated system. Handled well, prep items turn one of the least visible parts of a kitchen and your COGS into one of the most measurable. When evaluating cost management software, it's worth checking whether it can:

• Build a full recipe — ingredients and batch size — for any item you prepare in advance

• Let you count Prep Items in inventory and receive cost credit for what hasn't been used

• Reuse a Prep Item recipe as a single ingredient line in any menu recipe that calls for it

• Flag a Prep Item as a Production Item and track its actual versus theoretical usage

• Track waste for Prep Items in addition to inventory and menu items

• Calculate suggested prep quantities based on on-hand levels, projected usage, and shelf life