This article gives you an explanation as to how the system calculates your stock values, and the best practice tips to get fast and accurate results.
Last updated 19 Jan 2024
Jump to:
- Introduction
- The stock journey in Kobas
- Calculating the value of your holding stock
- Average Value or Guide Price
- Calculation tools
- Best Practice timelines
- How values in the Stock Usage Comparison Report are calculated
- Actual usage
- Theoretical usage
- Usage variance (Actual vs Theoretical)
- Further Analysis: Control Gap
- Further Analysis: Theory Usage Breakdown
- Other Reports
Introduction
The stock management pillar of Kobas will allow you to have greater visibility of your stock movements and costs, allowing you to make informed business decisions. The system assists in the visibility of Gross Profit, aids in pricing decisions, predictive stock ordering and the tracking of waste and giveaways.
This article explores how our systems and tools calculate and track all of your stock movement, and best practice tips on utilising the system. If you require detailed instruction on any element of the Kobas stock system, please read the relevant section of the Knowledge Base. Further information on reporting and analysis, analysing revenue by ingredient and Gross Profit calculation is available.
The stock journey in Kobas
All Ingredients sit within a Stock Ingredient Category and have properties such as the name, base measurement size, and allergen information. Your suppliers are managed on Kobas, and Ingredients can then have multiple suppliers/supplies, which hold information about size and price.
Parts of the ingredient are then listed as the recipe for a Batch, Modifier or in EPoS Items (PLU's). Therefore, when you make sales or log stock usage (such as waste) with any of these objects, then the ingredient usage is logged.
You'll then place orders and record deliveries of ingredients from suppliers as they happen.
The final element is recording actual Stock Checks into the system.
Calculating the value of your holding stock
Average value or guide price
A price has to be attributed to the cost of ingredients in order to feed into stock holding and profit analysis calculations. Kobas will by default calculate the average cost of the ingredient, for example, if you purchase on the same day for the same venue:
1L of Milk at £2
1L of Milk at £4
The average ingredient cost would be £3 per Litre.
You can override the average value for specific ingredients by setting a guide price for an ingredient. This will ensure that our system uses the price you put here for all of our calculations and this will not vary.
Calculation tools
The ingredient set-up process allows different sizes and prices for the same ingredient. Therefore, when we look at stock usage, we use an average cost price. Kobas calculates the average unit cost price and the volume you hold per venue overnight.
When a Stock Check is completed, Kobas then looks to see if a guide price is set and if so uses that, otherwise uses the average value. Any volume that isn't accounted for by deliveries will use an average cost of all supplies.
There are some events that will trigger a recalculation of the average unit price, and prices associated with orders, items and stock usage:
- Editing a historic stock check, transfer or delivery.
- Receiving a historic delivery
When a recalculation is triggered it will only recalculate the affected ingredient and this calculation is put into a queue of jobs.
Best Practice timelines
The current stock system is Kobas' third-generation stock system and makes use of the "First In First Out" principle which allows the stock holding figure and value to be accurate. Our current system is designed primarily around an overnight calculation when the system is used much less, so it doesn't affect the performance of those using the system.
In order to see accurate and timely results, we strongly recommend this process is followed:
- Ingredients and all recipes should be created/modified before they are sold/used.
- Deliveries should be entered as they arrive throughout the stock period you are checking.
- Stock Checks should then be created last. Several Stock Checks can be created to log counts in different parts of the venues but should be merged together in one action (to prevent multiple recalculations queueing).
- Managers should then follow our guide to investigating variances.
- Any changes to data should then be made in one go, which will trigger one calculation for that venue. The more instances that recalculations are required, the longer it will take for our system to show you an accurate result.
Warning: Where several actions are taken that trigger a recalculation (such as entering all deliveries for the period after the Stock Check), the recalculations will then queue and therefore this will take much longer for an accurate result in your cloud reporting.
How values in the Stock Usage Comparison Report are calculated
Actual usage and profit
Actual usage figures take the information that you input into Kobas in relation to the stock movement in your venue to calculate actual usage and profit values.
Cost of Stock = (Opening Stock Count value + (Deliveries - Credit Notes) + Transfers In - Transfers Out) - Closing Count
Gross Profit £ = Net Revenue - Cost of Stock
Gross Profit % = (Gross Profit £ / Net Revenue) x 100
Note: Stock Categories and Lead Types can be set to be excluded from Gross Profit calculations. If so, their sales and costs won't contribute to this figure.
Theoretical usage and profit
Theoretical usage uses your previous Stock Count as a starting point, adds deliveries and transfers recorded, and then takes into account stock usage (sales, waste, etc). This figure allows you to compare your actual closing Stock Count against the Theoretical value at that point, which then shows you a variance that you may wish to investigate. This is your stock loss or gain.
Theoretical usage = Opening Stock Count value + (Deliveries - Credit Notes) + Transfers In - Transfers Out - (Cost of Sales* + Waste* + Director* + Comp*)
*These figures are calculated using the Average Ingredient Cost for every part of an EPoS Item or Modifier recipe that is then marked as Sold/Wasted/Comp/Director.
Theoretical usage also allows you to have an estimated holding level and value throughout the stock period.
Note: The theoretical values are only as accurate as the data that has been input into Kobas. If deliveries, credits, transfers or waste is recorded much later than it occurred, the theoretical value will be incorrect until that is entered.
Top Tip: If this doesn't seem to be as expected, checking Pricing and Cost Price history of EPoS items, Modifiers and Ingredients would be a good place to check first, followed by transfers between venues where different costs apply.
Usage Variance: Actual vs Theory
This figure highlights the difference between the Actual and Theoretical units used. This is necessary for you to have visibility of your stock loss and gains, and have information to allow you to investigate the variance further.
Usage Variance units = Actual Usage units - Theoretical Usage units
Top Tip: There is a Kobas System Preference setting that can inverse the variance figures in your SUCR depending on your working practices.
Once we know the Usage Variance Units, we apply the Average Unit Cost figure to get the value of this variance. Therefore the difference in monetary value between Actual and Theoretical Value will not necessarily match Usage Variance Value in the same way that the Units figure will.
Usage Variance value = Usage Variance units x Average Unit Cost.
We then show the Usage Variance Value figure expressed as a % of the Actual Usage Value, and of your total net revenue for this period.
Further Analysis: Control Gap
This figure is the Actual Usage Value - Cost of Sales expressed as a percentage. This figure will increase with Waste, Comps and Director giveaways, giving you a quickly accessible figure to quickly see and compare how much stock is not being sold for you to control.
Further Analysis: Theory Usage Breakdown
These lines allow further analysis and break down your Theory Usage (ie. what has been put through your tills) between Sales/Waste/Comp/Director. It shows you the total as a percentage of all Theoretical Usage, total volume and value.
Other reports
The other reports that will show the cost of a sale or a Gross Profit calculation are listed here.
Daily Sales By Order Report
This report uses Theoretical stock figures.
Revenue = Actual sale value of that item
Ingredient Cost = Total costs of the ingredient proportionate to the recipe using Average Ingredient Value for that day.
Potential Revenue = Amount customer has saved on this ingredient with a promotion
Item Sales (All) By Date Range
This report uses Theoretical stock figures.
Cost of Sales = Total costs of the ingredient proportionate to the recipe using Average Ingredient Value for each day for items sold.
Margin = Net Revenue - Cost of Sales
GP% = Margin / Net Revenue x 100
Discount Report
This report uses Theoretical stock figures.
Net Ingredient Costs = Total costs of the ingredient proportionate to the recipe using Average Ingredient Value for that day.
Net Potential Revenue = Amount customer has saved on this ingredient with a promotion
Cost per use = Net Ingredient Costs / Discount Uses
Operational Profitability Report
This report uses Actual stock figures.
Cost of Sales = Total costs of the ingredient proportionate to the recipe using Average Ingredient Value for each day for items sold.