When You’re Losing Money, but Can’t See Where It’s Going: The Food Cost Blind Spot

One of the most frustrating challenges for any restaurant operator is knowing your margins are shrinking, but not knowing why. Your food costs seem fine. Your cost of goods sold (COGS) is within the typical range. Yet, at the end of the month, the numbers don’t add up. You’re losing money, and it’s not clear where it’s going.

This exact scenario came up in a recent conversation between our team and a multi-unit operator evaluating better tools to manage their kitchen and costs. They weren’t new to the business, and they weren’t flying blind. They tracked COGS. They looked at spreadsheets. But their gut, and their bank statements, told them something was off.

“My COGS is at 27–30%. I think that’s normal... right?”

On paper, this operator was sitting in the sweet spot. Most food and beverage venues aim to keep COGS between 25–30%, depending on the concept. But while their COGS seemed acceptable, their profit margins were not.

The problem? Surface-level numbers can lie - or at least, mislead. Operators may assume that a healthy COGS means food costs are under control. But unless those numbers are tied to actual recipes, real-time inventory, and up-to-date vendor pricing, they’re more of a guess than a guarantee.

‍Spreadsheets and Sticky Notes Don’t Scale

‍When asked how they tracked food costs and recipe margins, the operator shared what many in hospitality still rely on: spreadsheets, notepads, and rough estimates. They didn’t have a system to tie inventory usage to sales or to understand how ingredient costs were fluctuating week to week. They were making decisions in the dark.

And that’s not uncommon. Many seasoned operators are still managing food cost data manually - especially those running tight ships or multiple locations. But over time, even small inaccuracies compound. One missing delivery invoice, one outdated price per pound, or a menu item that was never updated in the spreadsheet can throw off your actual costs significantly.

‍The Hidden Impact of Missing Recipe Costing

‍Recipe costing was another blind spot. While they knew what they charged for a dish, they couldn’t confidently say what it cost them to produce each plate. This meant they couldn’t identify low-margin items or catch when something slipped from profitable to loss-making. Without real-time plate costing, operators are left guessing:

• Is that best-selling burger still profitable after a beef price hike?
• Are portion sizes creeping up during a busy shift?
• Is food waste quietly draining the bottom line?

These aren’t theoretical concerns - they are everyday realities that silently erode margins.

‍Why Visibility Matters

‍The biggest takeaway from this conversation wasn’t that this operator lacked discipline or insight. It was that they lacked visibility. They were running a solid operation. But without a system to tie purchasing, recipes, sales, and labor together, they were left reacting to lagging indicators, like an unexpected dip in monthly profit, instead of acting on real-time insights. With the right tools in place, they could have seen:

• Which menu items had the highest (or lowest) margin
• When ingredient prices changed, and how that affected recipes
• Which dishes were leading to the most food waste or over-portioning
• Whether prep and inventory practices matched the actual sales velocity

Solving the Problem with Real-Time Insights

‍This is where the right technology makes a difference, Not just by digitizing your process, but by connecting the dots across your operation. That’s exactly what platforms like opsi and GoTab were built for.

By combining GoTab’s real-time sales and menu data with opsi’s recipe management and kitchen workflows, operators get a live look at their actual margins - no guesswork required.

• Recipes are costed based on actual vendor pricing
• Ingredient-level tracking helps spot inefficiencies fast
• Prep lists tie directly to on-hand inventory and sales trends
• Operators gain the ability to adapt quickly instead of playing catch-up

From Gut Instinct to Data-Driven Control

‍Every experienced operator has good instincts. But instincts only go so far without the data to back them up. And in a tight-margin business, flying blind even just a little can be the difference between growing and just getting by. If you’re looking at your numbers and something still feels off, it might be time to trade the spreadsheets for real-time tools that give you clarity, confidence, and control.

Because when you can see where the money is going, you can finally stop losing it.

‍Ready to get control of your food costs?

‍Let’s show you how opsi and GoTab work together to give you full visibility from prep to profit. Schedule a Demo →

‍