[BETA] Track ingredient costs with Square Recipes
About ingredient cost tracking
Ingredient cost tracking lets you add ingredients to your item library, build recipes from those ingredients on your menu items and track food costs automatically. When a menu item with a recipe is sold, Square decrements ingredient stock and calculates cost of goods sold (COGS) and profit margins based on your ingredient unit costs.
With ingredient cost tracking, you can:
Add ingredients to your item library manually or through a CSV import.
Attach recipes to menu items to connect sellable items to their underlying ingredients.
Track ingredient stock levels and automatically mark menu items as sold out when ingredients run out.
View COGS and profit margins for each menu item in your reports.
Use simple cost tracking to monitor margins without enabling full stock tracking.
Note: Ingredient cost tracking is a beta feature and may change over time.
Before you begin
Review the current limitations of ingredient cost tracking:
No batch prep or recipes of recipes. You can’t create a recipe for an ingredient that itself has a recipe. For example, you can’t create a “pizza dough” recipe and reuse it within a “pizza” recipe. Model these as simple, one-level recipes.
No recipes on modifiers. Modifiers don’t track inventory or costs. Add-ons like extra cheese or sauce shots won’t decrement ingredient stock or appear in recipe-level COGS.
No recipes on items with multiple variations. Items with multiple variations (for example, Small, Medium, Large) can’t have recipes. A workaround is to model different sizes as separate items instead of variations.
All-or-nothing availability. If any tracked ingredient in a recipe runs out of stock, the menu item is automatically marked as sold out. You can override this and still sell the item from your point of sale.
To keep setup manageable, start with your top 10–20 menu items that drive the most sales or margin, then expand over time.
Add ingredients to your item library
You can add ingredients through a bulk CSV import or create them one at a time.
Use this method if you already have a list of ingredients in a spreadsheet or another system.
- Sign in to your Square Dashboard and go to Items & Orders > Items.
- Select Actions > Import Library.
- In the import window, select Download template and save the CSV file.
- Open the template and fill in your ingredient details, including name, category, unit, unit cost and SKU. Use a dedicated category such as “Ingredients” so you can filter and keep ingredient items separate from your sellable menu items.
- Return to Import Library in your Square Dashboard, upload your completed file and select Next.
- Match each column in your file to the correct Square field, then select Next to start the import.
- Review the confirmation banner to verify how many items were imported.
The imported items appear in your item library and can be attached to recipes.
If you don’t have a spreadsheet to import, you can create ingredients individually.
- Sign in to your Square Dashboard and go to Items & Orders > Items.
- Select Create item.
- Enter the item name and category. Use a dedicated category such as “Ingredients” so you can filter and keep ingredient items separate from your sellable menu items.
- In the Price area for the default variation, select the unit. The default unit is set to each (ea).
- Choose the unit your ingredient is measured in, like ounces, pounds or litres. If you plan to receive or use this ingredient in more than one unit, select Sell by multiple units and use Add unit or Add alternate unit to define each unit and its conversion. Learn how to set up stock conversion and sell-by units.
- Enter a Price or leave the field empty if you don’t plan to sell this ingredient directly.
- Turn on Stock tracking if you want Square to track availability based on this ingredient’s stock level.
- Select Save.
If you don’t want staff to sell an ingredient directly, mark it as internal use only so it doesn’t appear on your checkout screens.
- For single-variation items: Open the item, scroll to the Manage checkout section and turn on Internal use only.
- For multi-variation or multi-unit items: Select the variation name to open the variation details, scroll to the unit you want to hide and turn on Internal use only for that unit.
Learn how to create non-sellable variations.
Add recipes to menu items
Recipes connect your sellable menu items to their underlying ingredients. When you sell the item, Square decrements ingredient stock and rolls up ingredient costs into COGS and margin calculations.
Sign in to your Square Dashboard and go to Items & Orders > Items.
Find the menu item you want to add a recipe to and select it to open the item editor. You can also select Create item to start a new menu item.
Fill out the item details (name, category, price) if you haven’t already.
Scroll to the Recipe section and select Add.
Search for and select each ingredient you want to include, then select Done.
For each ingredient row in the recipe, enter the quantity used per one unit of the menu item (for example, 2 slices of bacon, 30 ml of syrup).
Confirm that the unit (e.g. ounce, gram) matches how you track stock for that ingredient. If the unit doesn’t match, go to the ingredient item to update it.
Select Save.
How availability and stock work with recipes
When you sell a menu item with a recipe, each ingredient’s stock is decremented according to the recipe quantity.
If any tracked ingredient doesn’t have enough stock for the recipe, the menu item is automatically marked as sold out.
You can override the sold-out status and still sell the item from your point of sale.
Update ingredient stock and costs
Accurate stock levels and unit costs for your ingredients enable automatic marking as sold out and ensure correct calculations of COGS and profit margin. You can update stock from your Square Dashboard or from the Inventory applet on your point of sale.
Use the Stock overview page for receiving deliveries or making bulk adjustments.
- Sign in to your Square Dashboard and go to Items & Orders > Inventory > Stock overview.
- Filter or search to find the ingredients you want to update. Only items with stock tracking turned on appear on this page.
- Select Actions > Receive stock for new deliveries, or Adjust stock for count corrections.
- For each item, enter the stock action (for example, Stock received), vendor name, unit cost for this delivery and the quantity and unit received.
You can also update stock for individual items by opening an item from Items & Orders > Items, selecting Manage stock and receiving or adjusting stock from there.
Use the Inventory applet for quick updates during service.
- From your point of sale, tap More > Inventory.
- Use sort and filter options (for example, by category or vendor) to find the items you want to update. Only items with stock tracking turned on appear on this page.
- Tap an item to receive stock for a new delivery (with cost per unit) or adjust existing counts.
The Inventory applet works well for delivery intake and quick corrections during service. For deeper configuration like recipes, units and conversions, use your Square Dashboard.
View COGS and profit margins
Once your recipes, stock levels and unit costs are in place, you can view cost and profit data for each menu item.
Sign in to your Square Dashboard and go to Reports > Inventory reports > Cost of goods sold (COGS).
Review the report columns for each item, which may include quantity sold, COGS, total revenue, profit and profit margin. Columns may vary by region.
Recipes use your ingredient unit costs to calculate each menu item’s cost and margin. Keep your ingredient unit costs up to date when prices change to maintain accurate reporting.
Use simple cost tracking without full stock tracking
If you want to monitor costs and margins without tracking stock levels, you can use simple cost tracking.
Enter a unit cost for an item even if stock tracking is turned off. Square uses that cost in margin reports.
If an item has a recipe, its cost comes from the sum of ingredient costs. The standalone unit cost field for that menu item is hidden, but you can still set unit costs on the individual ingredients.
For detailed stock tracking by lot, set the unit cost per stock received in Manage stock flow.
Simple cost tracking is a good way to start small. Add unit costs first, then layer in recipes and stock tracking when you’re ready.