Tweaking the price of an ingredient by just a dollar can make a significant cut into restaurants’ margins.
Flores Financial Services, a San Diego-based company that provides accounting and HR services to local restaurants and grocery stores, has added real-time tools to help its clients track the price of ingredients. They're included in upgrades the company made to its invoice and payroll systems.
The new software gives restaurants an analysis of purchases down to the line item, and can alert them when vendors change prices.
“If you’re a restaurant and you sell a ton of chicken, a price deviation of 10 or 15 percent can make a big difference in your budget,” said Greg Flores, President of Flores Financial Services. “You can’t change the price of chicken from $1.29 to $3.29 without us catching it.”
Aside from going paperless, Flores said the goal was to help restaurant and grocery store owners be proactive about costs, either through adjusting the price of their products or addressing vendors directly.
After implementing the service at four of its locations, local hospitality group Consortium Holdings-Projects said the service helped reduce food costs by 2 to 4 percent, according to an emailed statement.
“Restaurants have an extremely thin margin. If you don’t recognize you’re suddenly paying more for something, you could be a month or two down the road and not know about it,” Flores said. “It’s the same for a grocery stores. If a gallon of milk suddenly went from $1.20 to $1.90 per gallon, and you didn’t recognize it for months, you’d be selling the product at a much smaller margin than you had anticipated.”
Since Flores joined the business in 1995, it has grown from about 10 employees to 100. While the company started in accounting, its HR consulting business has increased to 15 employees.
“The market does drive some of that as well. It’s just very difficult for a restaurant and a grocery store to sit there and operate an accounting department and an HR department when really they need to be focusing on different things,” he said. “If we’re able to take that burden off of them, they’re able to go do what they love to do and what they’re passionate about.”
Flores said the new service has helped his company continue to grow its presence outside of the San Diego region.
Flores Financial Services works with more than 300 restaurants in San Diego, including Farmer & the Seahorse and Regents Pizzeria. The company also has clients in Hawaii, Colorado and the Midwest.