Incorrect Wastage Classification (COGS vs Expense)

Overview

In SUPY, wastage can be classified as either COGS or Expense. If wastage is incorrectly classified, it can cause confusion when reviewing food cost, expenses, and overall profitability.

What Happens (Impact)

When wastage is misclassified:

• COGS appears higher or lower than expected

• Expense reports do not reflect true operational losses

• Profitability analysis becomes misleading

Typical Indicators

You may notice:

• High COGS without a matching impact on sales

• Expense reports missing operational losses

• Confusion over where wastage costs are reflected

Root Cause (How It Happens in SUPY)

In SUPY:

• Wastage types determine whether costs flow into COGS or Expense

• Incorrect wastage setup or selecting the wrong wastage type sends costs to the incorrect financial classification

Best Practice (How to Prevent This)

To avoid misclassification:

• Define wastage types clearly during initial setup

• Train teams on which wastage type to use in each scenario

• Review wastage configuration periodically

How to Fix

If wastage is already misclassified:

• Review wastage types in Settings

• Correct wastage classification going forward (historical data will remain as recorded)

• Use reports to clearly separate COGS vs Expense impacts

Operational Tip

If food cost or COGS looks incorrect, wastage classification should be the first configuration to review.

Why This Matters

Correct wastage classification ensures accurate cost reporting and protects the reliability of your food cost and profitability analysis.