Analysing your revenue by ingredient allows you to have efficient insight into your business performance by the items you sell, not individual measures. This article explains how this is achieved within Kobas.
Updated on 02 May 2023
Jump to:
- Introduction
- How net revenue is attributed to ingredients
- How discounts and adjustments impact revenue
- Examples of configurations
Introduction
This article is aimed at clients utilising our Stock Management System, to ensure your setup allows you to analyse revenue and Gross Profit as you would expect.
Within Kobas we have EPoS Items which are used through both your EPoS and Online Ordering as they represent the items/services your customers purchase. EPoS Items have multiple properties such as prices, modifiers, allergens, and recipes. The recipe allows you to attach ingredients and batches to the EPoS Items, allowing our stock system to work.
A key part of your business analysis is Gross Profit and Net Revenue. Kobas assists you in showing you your theoretical Net Margin and Gross Profit percentage based on the retail price, to assist you in price planning.
We show revenue, costs, and margins against EPoS Items in our Revenue Analysis. We also show similar information against Ingredients in our Operations Analysis. This allows you to analyse ingredients used across many different items easily.
By doing this you can see, for example, the analysis of Vodka in one place in Operations Analysis. Within Revenue Analysis you would need to look at the individual places where you sell the Vodka (such as Single, Double, Bloody Mary, Moscow Mule, etc).
When you have set up your Global Categories, you will be able to analyse within the hierarchy of categories.
Please take a look here to see how Kobas calculates your stock values.
Take a look: To fully analyse this information once it is set up correctly, take a look at our Operational Reporting section.
How net revenue is attributed to ingredients
Where EPoS Items do not have a modifier (PISC) attached
This represents a simpler setup, and in essence, the revenue will be split between the ingredients and batches, in line with their proportion of the overall recipe.
| EPoS Item | Ingredients | Attributed | ||
| Espresso Martini | Absolut Vodka | 50ml | 40% | £2.80 |
| £7 Eat In Price | Kahlua | 25ml | 20% | £1.40 |
| Espresso | 25ml | 20% | £1.40 | |
| Simple Syrup | 25ml | 20% | £1.40 | |
| Total volume of recipe | 125ml | 100% | £7 |
Where EPoS Items have a modifier (PISC) attached
The EPoS Item retail price will be attributed to ingredients within the EPoS Item recipe as noted above. Then any revenue from a Price Change on the Modifier will be split in the same proportionate way across ingredients or batches in the Modifier recipe.
In simple terms:
- EPoS Item revenue > EPoS Item recipe ingredients/batches
- Modifier price change > Modifier recipe ingredients/batches
| EPoS Item | Ingredients | Attributed | ||
| Vodka | Absolut Vodka | 25ml | 100% | £3 |
| £3 Eat In Price | (of EPoS Item) | |||
| Modifier 1 Answer | Ingredients | |||
| Double up - Yes | Absolut Vodka | 25ml | 100% | £2 |
| +£2 Price Change | (of Modifier 1) | |||
| Modifier 2 Answer | Ingredients | |||
| Mixer - Fever Tree | Fever Tree | 1 item | 100% | £1.50 |
| +£1.50 Price Change | (of Modifier 2) | |||
| Total Retail Price | £6.50 |
Warning:
It is important that you consider the impact on reporting when you configure your EPoS Item and Modifiers.
In the above example, if the Fever Tree mixer had no price change in the Modifier, then the ingredient Fever Tree would have no revenue attached from these transactions. This may give you an artificially deflated view of the revenue of your Fever Tree.If you do not have any revenue against an ingredient/batch, then there will no revenue attributed to that ingredient/batch. This could be a decision made intentionally, but you should be aware of the impact of how you configure these elements of Kobas. Within your Stock Usage Comparison Report revenue in an EPoS Item or Modifier where there are no ingredients or batches, the revenue appears in a high-level line named: Sales of items and modifiers with no linked recipe.
How discounts and adjustments impact revenue
When we apply a promotion or price adjustment to an EPoS item, this will effectively reduce the revenue for the EPoS Item on that occasion. This will not affect the Modifier. This will reduce the total Gross or Net Revenue for the EPoS Item or Ingredient in the report. For example:
- If you sold 9x Vodka EPoS Items (at £3 retail price) and 1x Vodka EPoS Item adjusted to £2 retail price. Your reports would show £29 Gross Revenue.
Top Tip: If you wish then to analyse the effect discounting has had on your business, you can use the discount report in Revenue Analysis. Our Support Help Desk can arrange for an email report to be sent that details exactly when items have been discounted.
When you apply a discount to a whole order, this will apply to the EPoS Item and the Modifier, and therefore the revenue against both will be reduced in the same way as described above. The impact of these can also be analysed through the above-mentioned reports.
Examples of configurations
Here are some common scenarios that our clients face and how they may wish to configure their EPoS Items and Modifiers to aid their revenue reporting:
| Scenario | EPoS Item configuration | Modifier configuration | Effect on revenue ingredient attribution | Effect on CIC Mobile Ordering |
| Spirit with optional double-up and a mixer | Price and ingredients for the single spirit with no mixer. | A Modifier for the double-up additional shot ingredient and cost. Second Modifier for mixer and cost. | Revenue will be attributed for each option correctly. This allows me to see in the Modifier setup the GP achieved on the cheaper double-up and mixer. | This will show as "from" the price of a single, and therefore gives a smart and smooth customer experience. |
| A main pasta dish with different styles of homemade pasta. | The amount of the price that you wish to be attributed to most of the ingredients (but not pasta) and those ingredients. | A Modifier for the pasta choice and the amount of revenue you wish to be attributed to that. | Revenue will be attributed as you require it to be. This will be split in the detail of the receipt, but the total price will be correct. | The CIC will show the genuine minimum price to purchase the item, looking for the EPoS Item price + the lowest mandatory Modifier prices. |
| Steak meal with cooking options. | Price and all ingredients should be in the EPoS Item. | The Modifier should have no price or ingredients as this is simply a cooking instruction. | Revenue will be split proportionately across all ingredients. | Because the Modifier doesn't have a price change it will simply show as an option after the item is selected. |
Top Tip: With our Modifier in Kobas you can have a negative price, which is intended for scenarios such as Glass Deposit redemption. If you use negative prices against ingredients this will simply show a deficit in your revenue. For offers and special events, we recommend you make use of our Discounts and Price Bands features.
Accurately recording Post-Mix drinks
Because this is a product which you purchase concentrated, is dispensed automatically and mixed with mains water and gas, it is notoriously difficult to track on a Stock Management system.- By creating a Product the includes the syrup you can set the dilution ratio by adding the amount of syrup to the recipe, and the amount of product it yields to the batch setting.
- Then this allows you to link the recipe to EPoS items and Modifiers using the mililitres of finished product that will be used, meaning no complex maths!
- You can still stock-check this in boxes of syrup as Ingredients too, the best of both worlds!