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Got Food Waste? How to do a Restaurant Inventory the Right Way

Ryan Andrews
Ryan Andrews

Apr 6, 2018 6:35:00 AM

restaurant inventory restaurant

What many restaurateurs don’t realize is that a restaurant inventory is no different than their bank account.

If someone asked you to reach into your wallet and give them some money, you’d most likely hesitate and probably say no. If your employees asked to go into your bank account any time they wanted, well you already know how you’d respond.

It’s important to look at your restaurant inventory policies the same way you’d look at your bank account and ensure that you keep your inventory secure and constantly counted.

What is Restaurant Inventory Management?

Simply put, restaurant inventory management is keeping track of your hard-earned money – money you have used to purchase food and beverage with the goal of prepping, cooking, serving, selling, and earning a profit. You have to manage that inventory much the same as you would manage the money in your bank account.

The reasons for conducting daily weekly and monthly inventories are:

  • Less waste
  • Less spoilage
  • Less theft
  • Lower food and beverage costs
  • Fewer “86’d” or “out of” items
  • Higher profits

Restaurant inventory management is a key part of the overall information management system at any restaurant. The five elements that make up this system are purchasing, receiving, storing, issuing and inventory.

When only one person is responsible for all 5 elements of your information management system, your chance of error is 100%.

When two or more people are responsible for the different elements of the system, you significantly reduce your chance of error. When you have a different person responsible for each of the five elements, your chance of error is reduced to almost zero.

Restaurant Inventory Management is:

  • Crucial to the financial health of your restaurant
  • Critical to controlling your food and beverage costs
  • Key to improving your overall profitability

It ensures all the food, beverage and other goods you purchase are managed properly, accounted for and are performing their job. That job is to generate sales and ultimately provide bottom line profits.

Think about this:

  1. You do a great job purchasing. You competitively bid your stock and get the best products at the best price.
  1. You have a structured receiving policy. You count, weigh, and measure so that all ordered products are received at the correct prices. You are receiving exactly what you specified and all weights and counts are accurate on the invoice. All your invoices are signed by your staff.
  1. Your storerooms, coolers and freezers are highly organized and properly secured.
  1. You issue products to the proper areas using a requisition system (if you have a large operation that transfers to other departments.)

But, what if you’re not counting your inventory regularly? What if you’re not comparing your inventory to your item sales from your POS system? What if your inventory is somehow shrinking?

All your efforts in the first four elements will be squandered.

Most restaurateurs get into the business for the more glamorous parts of owning or running a restaurant and many restaurateurs admit they either don’t take proper inventories, they do a bad job of taking inventory, they don’t conduct regular inventories and some don’t take inventories at all.

46% of SMBs either don’t track inventory or use a manual method (Source: Wasp Barcode)

Poor restaurant inventory management results in poor customer service. You never want to tell a guest that you’re out of a regular menu item because someone didn’t know you were running low or that you ran out of that item. And if it happens with one item, it will most likely happen with others.

Soon your guests will stop frequenting your restaurant because your establishment is not consistent. There’s nothing worse than a guest having their mind set on an item, or coming to your restaurant for a specific item, only to be told, “Sorry, we ran out.”

5 Simple Techniques to Faster Restaurant Inventory Management

Here are five techniques to help make your restaurant inventory project more structured and simpler to implement and help increase your profit.

  1. Inventory Frequency

At a bare minimum you should be taking inventories once a month. Ideally you should be taking inventory at least once a week, and for your highest cost items (sensitive items) you should be taking daily inventories.

  1. Inventory Timing

Inventories should be taken, if possible, on the same day and at the same time and should be conducted when the restaurant is closed when there is no inventory movement. 

  1. Inventory Organization

To make your inventory process smoother and simpler, ensure that your inventory sheets are set up in the same way that your shelves are stocked. Your inventory sheet should have:

  • The item name
  • How you count the item
  • Item quantity
  • Item par (how many of the items you should have on hand)
  • Unit price
  • Total item value

It is also helpful to label all the areas of your storerooms, where possible, with each item that should be stored in that location. This way all your items are stored in the correct place when put away after deliveries, easily located when needed, and when it’s time to count.

  1. Inventory Team

Many times those charged with taking inventory dread the process because it’s tedious, oftentimes disorganized and performed at the end of a long day.

It’s always easier when you have a team to take your inventory; one or two people to do the counting and one or two people to record the numbers on your inventory sheets. At a minimum, it is best to have one person counting and one person writing.

  1. Inventory taking tools
  • Clipboards for your inventory sheets to make it easy to write on the inventory forms.
  • Two working pens, best if one is attached to the clipboard with a string.
  • A ruler: when measuring some liquid items that are counted by tenths or fractions, a ruler guarantees that you’re being consistent and using the same unit of measure instead of just “eyeing” it.
  • Scale: approximating weights on your high cost sensitive items like meats, seafood, and poultry is a bad way to take inventory. A scale guarantees exact inventory weights.

The more you can systematize, organize, and streamline your restaurant inventory management system, the easier it is to take inventories and keep your waste, shrinkage and losses to a minimum and keep your restaurant as profitable as possible.

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