8 strategies for managing costs across multi-unit restaurants with an RMS

Running a restaurant can be intense and tumultuous even on the best of days, but running a medium to large restaurant group turns that dance up to 11 with its unique challenges and special brand of chaos. But if you didn't love it, you wouldn't be doing it.

And while love for the grind isn't all you need to be successful (sorry, John and Sir Paul),  overseeing multiple locations, ensuring consistent quality, managing costs, and maintaining smooth operations can seem like a juggling act—one where any slip-up can affect the bottom line.

Enter the Restaurant Management System (RMS), a powerful tool designed to streamline operations and boost profitability across all your venues. Here are eight key strategies on how an RMS can help you efficiently manage costs across your multi-unit operation.

1. Track costs in one platform for all locations

Imagine having a comprehensive view of your entire restaurant group's costs within a single platform. An RMS consolidates data from all your locations, allowing you to monitor expenses such as food, labor, and operating expenses across the board. 

This unified view simplifies your workflow and ensures that cost tracking is accurate and up-to-date, enabling better financial decisions in the moment - not after your accountant closes the period.

With MarginEdge, for instance, you can easily access and compare P&L reports across all your locations. This feature allows you to see the big picture and drill down into specific expenses, helping you identify areas for cost-saving measures. Plus, it eliminates the need for manual consolidation of data from multiple sources - saving you time and effort.

2. Forecast sales to better predict ordering and staffing requirements

Accurate sales forecasting is crucial for optimal inventory management and labor scheduling. Most RMSs will let you input your own forecasting that either you or your accounting team already use so that your spending, sales and forecasts can all be seen in one place. 

This insight helps you predict future sales trends, helping you make informed decisions about ordering and staffing. This predictive power ensures that you’re neither overstocked nor understaffed, which can significantly reduce waste and labor costs.

MarginEdge is developing a sales forecasting tool that auto-updates as your sales roll in, recalculating your forecast daily based on recent sales performance. This product will provide you with the best possible estimate of how your restaurant locations will perform.

If you’re interested in learning more about soon-to-be-released tools like Sales Forecasting, click here.

3. Compare performance between stores

One of the greatest advantages of a multi-unit operation is the ability to learn from each location's performance. An RMS allows you to compare key metrics like sales, labor, and operational efficiency between stores. This comparative analysis helps you identify best practices and areas needing improvement. 

If your store managers are bonuses based on performance, an RMS is a great tool to show them exactly how they’re performing which will incentivize them to take action in the moment and optimize their performance.

With performance comparison tools, you can quickly review your restaurants’ behavior for the entire period and gain insights into sales trends, forecasts, budgets and expenses across all locations. This information empowers you to replicate successful strategies across your entire network and support underperforming units more effectively. 

If one store is consistently hitting its numbers, you can do more digging to understand what makes it successful and bring those lessons to your other stores.

VIDEO: See how Greg Casten uses MarginEdge to improve performance across his restaurant group's stores.

4. Track waste - in the kitchen and the dining room

Consistency in food quality is essential for maintaining customer loyalty. An RMS enables you to standardize recipes across all your locations, ensuring uniformity in taste and presentation. You can make updates in one place which are then automatically sent out to all or some of your stores. You can also customize permission levels that make sense for your team and operations.

Additionally, it helps you monitor product prices in real-time, so there are no surprises when it comes to ingredient costs. For one location, a $2 increase in ground beef for an order might not be enough to necessitate a change. But when you've got 20 burger joints, that $2 makes a much bigger impact. An RMS lets you see that information as soon as the invoice is processed so you can correct course quickly, optimize your menu and protect your bottom line.

Tracking food costs in real-time and easily adjusting recipes in one place automates protecting your profitability. Digital inventory management systems update prices daily, allowing you to make timely adjustments to your menu and pricing strategy. 

An RMS that lets you take inventory from your phone saves even more time because the counts are entered directly into the system, meaning there’s no need to manually transcribe them from a clipboard.

Case Study: Burger 21 was able to cut its food costs by 2% by using digital inventory management tools in the MarginEdge platform.

5. Streamline invoice processing

Manual invoice processing is time-consuming and prone to errors, and when you've got multiple locations, that problem compounds exponentially. An RMS automates this process, capturing invoice details and syncing them with your accounting system automatically. 

And since we know not every invoice makes it out of your kitchen in pristine condition, look for an RMS that can process hand-written scribbles and adjustments, along with non-food products like packaging and supplies for you. You should always expect to pay some oversight to any automation technology, but should not have to enter in the data yourself. 

This automation saves hours of labor for both your store and finance teams and minimizes the risk of discrepancies. If it saves one person three hours a week, imagine how many hours worth of labor that saves across your entire restaurant group with just one solution.

Make sure you look for a robust invoice processing feature where you can submit invoices via photos in a mobile app (because when are you not working from your phone?), email files, platform uploads, or EDI integrations. The system should capture all the line item data within 24-48 hours, even from handwritten notes, making the process seamless and efficient.

6. Automatically categorize purchases into central products

After an invoice is processed, and RMS should categorize your purchases into central products for you. What does that mean? It means your RMS will know that a tomato should go in your produce category, but it might not know that you use yellow onions from Gordon Food Service the same way you use the ones from US Foods. In short, some RMSs don't automatically see your products the same way you do in your kitchen. Let's break that down further.

A central product is what's used when creating recipes and inventory count sheets in your RMS. For example, you use yellow onions in your French onion soup recipe but get them from different vendors depending on quality and availability. On your shelves, all yellow onions are stored together regardless of who delivered them.

If your RMS doesn’t map your like products (like all yellow onions) to a central product, your food costs won’t be correct because your recipes will only use prices from the specific vendor you were using when you added the recipe, and you'll have 15 different "yellow onions" on your inventory count sheets.

Some RMSs will make you manually map the new yellow onions to your recipes for accurate food costs and consolidated count sheets every time you purchase from a new vendor. This clearly doesn’t save you time if your RMS doesn’t map it for you, and is a key differentiator between the RMS solutions available.

7. Automation to speed up vendor statement reconciliation

As a multi-unit group, you likely work with dozens if not hundreds of vendors. Ensuring that you’re paying them all the correct amount is critical for cost management and a painfully long process. 

An RMS can speed up parts of vendor statement reconciliation, alerting you to potential missing credits or shorts automatically. Reconciliation ensures that every cent counts and reduces the manual effort involved in verifying vendor statements. You’ll still need to decide how often and how you’ll want to reconcile vendor statements, but an RMS takes on the tedious task of searching for those discrepancies for you.

A vendor statement reconciliation tool helps ensure you receive every vendor credit due and only pay what you owe, giving you peace of mind that you’re always paying the right amount and keeping cash flow in check.

And when combined with bill pay capabilities, your accounts payable (AP) process streamlines with automation even further with customizable levels of control so you can let the RMS do the heavy lifting, or just let it lend a hand where necessary. 

This gives your accounting team more time to provide financial advice and solutions, rather than searching for numbers in a haystack and tracking vendors down like they're Steve Irwin in the Outback (RIP). 

If you’re interested in learning more about soon-to-be-released tools like Vendor Statement Reconciliation, click here.

8. Track internal transfers and commissary orders

A unique feature of multi-unit restaurant groups is typically using a commissary kitchen, central production kitchen or making internal transfers. Managing commissary orders and the movement of products from one location to another can be challenging, especially when keeping track of the associated costs and how they're allocated to each entity.

An RMS serves as a single source of truth, providing a paper trail for each transaction. This transparency ensures that each store is charged or paid accordingly, maintaining financial accuracy across your operation. And since RMSs sync automatically with your accounting system, both you and your accounting teams will see the same accurate financial reports, like your P&L, for all locations.

MarginEdge allows you to manage internal transfers with ease, ensuring that all transactions are documented and accounted for. This feature is particularly useful for multi-unit operations that rely on centralized commissaries for certain supplies or prepared items.

Managing costs across multiple restaurants can be much simpler with the help of technology and automation. By leveraging the power of an RMS like MarginEdge, you can streamline operations, improve financial accuracy, and drive profitability across all your locations. From tracking costs and forecasting sales to streamlining invoice processing and vendor reconciliation, an RMS provides the tools you need to make informed decisions and run a successful multi-unit operation.