Feature Overview: COGS (Cost of Goods Sold) Module

Feature Overview: COGS (Cost of Goods Sold) Module

The COGS module enables users to understand their cost of good sold and food cost without building and assigning recipes. This provides early visibility into cost trends, helping teams monitor performance, identify usage, and establish accurate baselines for later Actual vs. Theoretical (AvT) analysis (full recipe build out) if this is the ultimate goal.


Every inventory item and POS menu item is linked to a COGS Account, allowing reports to roll up usage and sales by COGS department of category. 

Yellow Dog then integrates multiple data sources, such a vendor invoices, POS sales, and physical inventory counts, to calculate COGS and Food Cost.

The formulas used are it:

COGS = Beginning Inventory + Purchases – Ending Inventory

Food Cost =  COGS (Beginning Inventory + Purchasing – Ending Inventory) ÷ Revenue

Yellow Dog captures each element of these equation through:
  1. Beginning and Ending Inventory:  physical counts taken manually or through YD Mobile or CountXL, grouped by store, department, or custom category.
  2. Purchases: vendor invoices (manual, EDI, or Retriever imports), all tied to specific COGS accounts.
  3. Revenue:  your POS or eCommerce systems, mapped to COGS departments.

To ensure accurate COGS reporting, the following requirements must be met:
  1. COGS accounts must be assigned to items
    1. This assignment is typically completed at the level. 
    2. This assignment capture the value of purchases.

  2. COGS accounts must be mapped in POS Item map so that revenue can be tracked
    1. Items without COGS accounts assigned in POS Item map will not have revenue assigned which will prevent cost from being reported accurately.
    2. Because the ingredients for most POS Menu Items will be assigned to multiple COGS categories (i.e., a burgers ingredients could include items assigned to Dairy, Protein, and Produce) users can only map COGS Departments in POS Item map. The system then divides each categories cost by the total department revenue individually.

  3. Physical Inventories must be performed regularly
    1. Most COGS reporting pulls data between two physical inventories.

  4. Purchasing is entered accurately and consistently
    1. Invoices must be entered consistently.
    2. Transfers should be created as needed.
    3. Returns to Vendor should be created as needed .
  1. Batch Recipes and created and counted in physicals
    1. This will allow users to include batched items in their physical inventories as well as perform waste adjustments for these items as needed.

  2. Manual Adjustments are entered
    1. When manual adjustments for waste are made the variance in Physical Inventories will be closer to representing true usage derived from items sold. Without performing waste adjustments the variance in a Physical Inventory will represent total usage (includes sold and wasted quantities).

  1. COGS Account Structure: Supports multiple levels of reporting, by department or category.
  1. Flexible COGS Account Assignment: COGS assignment can be completed by level or item.
    1. Assignment is most typically completed by level.

  2. Corresponding Reports: Yellow Dog provides several reports to support COGS analysis.
    1. COGS Detail Report- Provides a snapshot of activity including sales cost, physical inventory adjustments, and purchasing without requiring two inventory selections.
    2. COGS by Item/Department/Category Reports - Calculates cost percentages based on activity between two physical inventories.
    3. Inventory Items / POS Items with No COGS Accounts - Identifies inventory or POS items missing COGS mappings (shown as “Not Set” in reports).

  3. Clear COGS and Food Cost Formula: COGS and Food cost is clearly determined using the standard formulas.
    1. COGS Formula - (Beginning Inventory + Purchasing) – Ending Inventory
    2. Food Cost Formula: (Beginning Inventory + Purchasing – Ending Inventory) ÷ Revenue
  1. Multi-Phase Implementation: Yellow Dog’s COGS process grows with your operational maturity.
    1. Phase 1: Basic COGS (revenue vs. usage)
    2. Phase 2: Recipe-based costing
    3. Phase 3: Basic Actual vs. Theoretical tracking (selected recipes)
    4. Phase 4: Full Actual vs. Theoretical (all recipes and modifiers linked)





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