Food spend is 1/3 of the costs of your restaurant. Not having a firm grip on your cost of goods sold by taking inventory means you get a false picture of your restaurant’s health. Not only is inventory critical to running your restaurant, it’s critical to your daily processes. However, finding the time to work on inventory each day can feel overwhelming. Managing your restaurant’s inventory is not a one-time thing, or even a once a week task, it is an everyday task.
What is Inventory Management?
Long story short, restaurant inventory is a loss prevention tool. It’s how you measure how profitable your restaurant is. It’s also how you can account for supplies that you need/come into your restaurant, menu items that go out of the kitchen, and food ingredients leftover.
It’s also how you can account for:
- Supplies that you need/come into your restaurant
- Menu items that go out of the kitchen
- Food ingredients leftover
Poor inventory management leads to food waste, a food cost you cannot control, and ultimately, inconsistent profitability in your restaurant.
When you cannot understand how much inventory has been used or unused, you cannot truly determine your restaurant’s earnings in a shift, week, month, or year. With the right inventory management, you can understand not just your profit, but your menu’s success, your guest satisfaction, and even server performance!
So, How Can I Manage My Restaurant Inventory?
Whether you’re a restaurant inventory management pro or it’s your first go at figuring out this process, Upserve has put together your step by step guide on how to manage your inventory accurately. The most successful restaurateurs keep track of their inventory by following a few steps, and keeping a record.
Inside, you’ll find:
- An overview of what restaurant inventory looks like
- An in-depth explanation of how to manage your restaurant inventory
- A downloadable restaurant inventory template you can use today
Use this guide to understand the process for good restaurant inventory management. And use this template to keep track of your restaurant inventory – track your COGS and more. Review to see where you have variances, make menu decisions, sales and expense adjustments, and have a better command of your financial wellness!
Save Money by Tracking Inventory
Not taking inventory is like flushing money down the drain.
Food spend is 1/3 of the costs of your restaurant. Not having a firm grip on your cost of goods sold by taking inventory means you get a false picture of your restaurant’s health. Then, there’s having your money tied up in perishable items, which eventually go to waste. Not only is restaurant inventory management critical to running your restaurant, it’s critical to your daily processes. 86ing an item in the middle of a dinner rush is an issue directly tied to inconsistency in inventory processes.
There’s no way around it… taking inventory regularly with a proven process is a must for running your business.
But regular inventory is more than just about taking a count. In fact, you can calculate cost of goods sold, which gives you exact numbers. This helps you plan your budget and food spend. You’ll see how much is being used and how quickly. When you take inventory, it almost guarantees you won’t run out of stock and food won’t go to waste. Regular inventory is the most accurate way to get a picture of your restaurant’s health.
Food cost is one of the largest expenses for the restaurant, and one of the most overlooked areas for improvement and control.Get The Guide
Save Time by Tracking your Restaurant Inventory
Compare your restaurant inventory system to being on the line. Just as your food goes through changes as it moves down the line, your inventory changes depending on the week, season and based on what is trending.
Finding the time to work on inventory each day can feel overwhelming. Managing your restaurant’s inventory is not a one-time thing, or even a once a week task- it is an everyday task. Why? Well, food waste, spoilage, theft, and overstocking are all costs that seriously affect your cash flow.
The most successful restaurateurs keep track of their inventory by following these three steps:
Step 1) Take inventory frequently.
- Some items need to be done daily and some twice a week. It truly is a science and depends on the type of produce.
- Keep a schedule. For example, if you have more energy and hands before open, take inventory each morning. If you are a night owl, do it after close. Many restaurateurs think it is alright to take inventory while on the clock, but this will be ineffective because it varies so much from day to day.
Step 2) Clean and organize before even starting.
- What restaurateur starts work in a messy kitchen? Throw away expired foods, and group similar foods together.
- FIFO isn’t just a type of accounting. Implement the first in first out basis. Rotate your goods, and explain to staff the order in which they should be using produce.
- It does take a team. Train a few trusted staff members on your best inventory practices. This will also help you ensure that you are counting properly and check your work.
Step 3) Keep a record.
- Keeping organized takes time, time in which you don’t have. But think about it like this, if you spend just a few more minutes keeping up with an organized inventory process, you will save time and money in the long run.
- Use count sheets or templates to keep track of your process. This is good, not only while taking inventory but as a log to look back and build off of in the future.
3 Inventory Management Tips For Seasonality
Maintaining your restaurant’s inventory based on seasonal demand is hugely important when it comes to making a profit.
… And that goes beyond food ingredients! Paper towels, linens, silverware — it’s important to ensure that you are supplied efficiently everywhere so that you can meet your guests’ (and staff’s) needs.
While understanding your sales forecast is half the battle, there are 3 quick inventory management tips you can use to deal with seasonal trends (and really any time of the year!).
1- Choose A Consistent Time To Take Inventory
When you pick the same day of the week and time of day, you’re more likely to understand the norms of your restaurant, and you can better plan for seasonal highs this way, too!
2- First In, First Out (FIFO)
When it comes to food especially, this is a good system for … always… but especially during seasonal planning. Utilize the FIFO system by rotating older items to the front of the shelves. This means they get used first and have less chance of expiring. Plus, now you can see easily what you have excess of and may need to cut down on with your next inventory order.
3- Standardize Cost
When you are planning your budget based on a sales forecast, it can be easy to forget to account for changes in pricing of different items. Always be sure to use the latest price you paid as your standard for making decisions.