Picture this: It’s a busy night at your restaurant. You’re running low on a key ingredient for your most popular dish, but before word gets out to your servers, you’re faced with a flood of orders you can’t fill. Cue disappointed customers and potentially lost revenue. While there’s always the possibility of an unexpectedly busy night, if you have poor inventory management practices, this scenario can become the norm. Here’s how restaurants can get a sense of how to best manage inventory to control costs, reduce waste, and keep customers happy.

What Is Restaurant Inventory Management?

Restaurant inventory management tracks food and other items coming in from suppliers as stock is used, lost, or discarded. Overall, inventory management helps companies, including restaurants, know how much stock to order and when to order it. You need enough to meet customer demand, but you don’t want to take up too much space or tie up more capital than necessary. Restaurants have the added challenge of selling perishable items with a limited shelf life: Order too much, and you risk spoilage and waste. Order too little, and you might run out of important items during a busy service.

Restaurants that do effective inventory management carefully track all ingredients and supplies, beginning the moment they’re delivered. This includes keeping a close eye on usage rates, monitoring expiration dates, and anticipating demand fluctuations based on seasonality or special events. Like any other form of inventory management, restaurants can track inventory using spreadsheets and manual counting. But inventory management software helps ease the process and more accurately count and track products. It can also reveal important financial and performance data, allowing restaurants to make well-informed purchasing decisions that reduce food waste and improve overall bottom line.

Key Takeaways

  • Good inventory management practices are a must for restaurants looking to control costs, reduce waste, and keep customers satisfied.
  • Restaurant inventory management involves carefully tracking all items from the moment they’re received until they’re used, sold, or discarded.
  • The high-level goal is to prevent selling out of key ingredients while avoiding perishable overstock that leads to waste.
  • Regular physical inventory counts coupled with perpetual inventory tracking using POS systems or specialized software tends to be the most accurate and efficient way to manage restaurant inventory.

Restaurant Inventory Management Explained

Effective restaurant inventory management requires a systematic, detail-oriented approach. It starts with setting up clear processes for receiving and logging new inventory. This involves more than just counting boxes—it’s about verifying that the quantities and quality match what was ordered and then accurately entering that information into an inventory tracking system, be it with software or pen and paper.

Once items are logged, the focus shifts to following their movement through your restaurant. While it’s impractical to log the use of every single ingredient in real time, restaurants can track inventory on a daily or weekly basis. This is where having a reliable, easy-to-use tracking system is crucial. For example, many modern POS systems have features that allow you to log the sales of specific menu items, which can provide a rough idea of ingredient consumption. Regardless of methodology, staff should be trained on the importance of accurately logging use and waste.

Besides ongoing daily tracking, regular physical inventory counts are essential. This process, often conducted weekly, helps restaurants verify that records match what’s actually on shelves, identify any discrepancies, adjust when inventory needs to be reordered—aka “par level”—and make smarter purchasing decisions.

The Importance of Inventory Management for Restaurants

Restaurants are more likely to enjoy long-term success if they practice effective inventory management, as it helps optimize operations and profitability. By keeping track of stock levels and usage rates, restaurants are better prepared to keep enough food and ingredients on hand to meet customer demand and prevent stockouts, substitutions and lost customers. At the same time, inventory management can mitigate over-ordering to reduce the risk of spoilage and loss—especially important given restaurants’ reliance on perishables.

What’s more, data generated by inventory tracking provides insight into a restaurant’s most popular dishes and seasonal trends. In an industry known for tight profit margins, such info can make a significant difference in a restaurant’s long-term success.

What Is Restaurant Inventory Control?

Restaurant inventory control is the process of managing food and other stock to avoid spoilage and loss. While inventory management is a broader term that encompasses all aspects of tracking and managing stock, inventory control specifically focuses on minimizing losses and ensuring optimal stock levels. In a nutshell, it helps restaurants plan for when to repurchase inventory.

Inventory cost accounting is a related concept that refers to the process of determining how much product a company should carry to reduce its total inventory costs. It looks at more than just the actual cost of the product and considers storage, administration, and market fluctuation.

Defining Inventory in Food and Beverage Services

For the food and beverage industry, inventory includes all the physical items needed to provide service to your customers, including food and maintenance, repair, and operations (MRO) items like detergent, paper napkins, and pots and pans.

Examples of inventory in a food and beverage service business include:

  • Food
  • Dry goods
  • Spices
  • Liquor and beverages
  • Cooking equipment
  • Linens
  • Worker uniforms
  • For the sake of efficiency, it’s wise to track inventory in separate categories like food, liquor, and non-food items.

Key Inventory Terms for Restaurants

Experts use some standard terms to explain elements of inventory, including restaurant inventory. Here are some common terms.

  • Sitting inventory: The total amount of a product that your restaurant has on hand. You can measure sitting inventory in dollar value or another physical or unit tally. However you measure, be consistent.
  • Count sheet: A physical document or digital spreadsheet used to record the actual items on hand during a physical inventory count. The count sheet is then compared with the presumed inventory levels in your tracking system to identify discrepancies.
  • Shelf to sheet: The process of physically counting inventory items (on the shelf) and recording those numbers on your count sheet. Also known as a physical inventory count.
  • Unit conversion: The process of converting inventory counts into a standard unit of measurement for the sake of consistency. For example, if you count 15 cans of tomatoes, you might convert to pounds or ounces based on the size of the cans. This leads to more accurate tracking and costing.
  • Depletion: The dollar value of a product your restaurant uses in a specified period. You can track depletion daily, weekly, monthly, or over longer terms.
  • Usage: A measurement of how long you have before a product is entirely gone if you bought no more. To calculate usage, divide the sitting inventory of a product by the depletion rate for that product. For example, if you have 250 pounds of hamburger and use 50 pounds of it per day, you have five days of usage.
  • Shrinkage: The loss of inventory due to factors such as theft, spoilage, or errors in receiving or tracking. Shrinkage is often expressed as a percentage of total inventory. For example, if your sitting inventory is $10,000 and your actual inventory is $9,500, your shrinkage is 5%.
  • Variance: Often tracked as a percentage. Variance is the difference between the depletion of a product and how much your records say was sold. For example, at the end of a weekend, your inventory of pizza dough is down by 200 pounds. But your POS system says you sold pizzas that used 190 pounds of dough. The variance is 10 pounds. In this example, the variance would be 10/200, or 5%.
  • Yield: Represents the ratio of the amount of product your POS reports as sold compared with the amount actually used. In the previous example, the POS said you sold 190 pounds of pizza dough, but you have 200 pounds less pizza dough, so the yield is 190/200, or 95%.

Techniques for Taking Restaurant Inventory

It’s likely that every restaurant takes inventory a bit differently, depending on its size and type, but here are six common inventory steps that most restaurants follow to some degree.

  1. Create a table: Create an inventory table with five columns across the top. Name the columns: item, unit of measurement, current count, unit price, and total cost.
  2. List items: List all items in individual rows on the inventory table. You may want to group similar items—all meats, for example.
  3. Record the amount: Record the amount of an item by a logical unit of measurement. For example, you might list hamburger by the pound or by the number of 10-pound packages. And you might record buns by the quantity of 12-bun packages.
  4. Record price: Record the unit price for each item in stock. It’s important to use the most recent price you paid for the items. That helps you understand the current cost of goods and how much it costs to replenish.
  5. Determine cost: Multiply the inventory count by unit and by the last price of the item. Place that number in the total cost column.
  6. Use par inventory sheets: Owners and managers set the minimum level they want on hand for each item as the “par” level. A par inventory sheet shows how much of an item the restaurant always wants on hand and when to purchase more. You might also add a sixth column to your table to reflect par levels for each item.

Effective Food Inventory Management Strategies

Regularly track inventory manually, ideally with the same staff members to help maintain consistency and improve efficiency. And consider restaurant inventory management software to automate processes and ensure more accurate data and reports.

Six tips for effective restaurant food inventory management:

  1. A point of sale (POS) system will help, but use an ERP or take inventory by hand. A POS helps immensely with forecasting, order planning, accounting, and some inventory tracking. But you’ll still want a person or persons to do a manual count of your inventory to verify and update information included in your digital platforms.
  2. Use the same staff to do inventory. If the same employees track inventory each time, they’ll become more efficient and can learn to spot trends or inconsistencies—but be aware of the possibility of theft if only a few employees are responsible.
  3. Track inventory on a consistent schedule. Count and monitor your inventory on a regular basis to see how quickly you’re using food and ingredients, which is called cycle counting. Create a plan for your inventory management. It’s best to conduct your process before you open or after you close, for example. Plan to take inventory at the same time of day on the same day every week or month to ensure consistency. However, you can track different types of stock on different schedules. You might track more perishable food every few days and bulk or less frequently used items every week or every other week.
  4. Use a food waste sheet. While tracking inventory, you should use a separate sheet in your inventory table to track the amount of food that has spoiled or been wasted in other ways. Monitoring food waste can help you find ways to avoid that loss. Use a food waste log to find areas you can improve to save money.
  5. Follow the first expiring, first out (FEFO) inventory method. Restaurants rely on perishable goods, so you want to use the FEFO inventory method. That means you use the oldest food and supplies before any others. Position the oldest items in your storage areas toward the front to make it easy to access.
  6. Use your inventory to guide future buying decisions. Consistently taking inventory should help you identify trends regarding how you’re using food and ingredients. Use that data to guide future purchasing decisions so you always have the right kind and amount of stock on hand.

Determining Optimal Food Inventory Levels

Restaurants should keep less inventory than many businesses because they usually deal with fresh ingredients. However, some items can last longer than others. For example, canned goods and food with a longer shelf life, such as flour, sugar, and rice, don’t need to be turned over as often as perishable items that need to stay fresh for safety and quality. The latter goods generally need to turn over within a week or less.

Calculate your monthly turnover by dividing the cost of sales for the month by the average value of inventory on hand. For example, if you spend $24,000 each month, divide that by six to get the low end of the value of inventory you should have on hand, say $4,000. And then divide the starting number by four to get the high end—in this case, $6,000. It’s calculated this way because you should be turning over most of your food inventory four to six times each month. If the cost of your inventory on hand is outside that range, it could be an indicator of having too much or too little on hand.

The Impact of Inventory on Restaurant Profitability

Restaurant inventory management is all about finding that sweet spot. On one hand, you need enough inventory to meet demand; a customer who can’t order favorite menu items because an ingredient is out of stock is a customer who might not come back. On the other hand, overstocking can tie up valuable capital, increase storage and handling costs, and lead to waste due to spoilage or expiration.

Having enough inventory to drive sales while minimizing waste will improve net profit, or the amount of money left over after all expenses and taxes. Every dollar tied up in excess inventory is a dollar that could have been invested elsewhere in the business, whether on new equipment, staff training, or marketing. Conversely, every sale lost due to insufficient inventory is a missed opportunity to generate revenue and build customer loyalty.

Effective inventory management can also help restaurants pinpoint and reduce sources of waste, such as over-portioning or inefficient prep processes. In turn, restaurants can lower their food costs and increase their profit margins. The restaurant industry is notorious for its tight margins, so even the smallest improvements in inventory efficiency can benefit the bottom line.

Advantages of Inventory Management for Restaurants

Proper inventory management helps you decrease food waste and loss, work with vendors, decrease the overall cost of goods, increase profits, and keep customers happy. Major benefits include the following:

  • Less food loss: Up to 10% of food purchased by restaurants is wasted before it even reaches the consumer. When restaurants buy too much food at a time, it ends up spoiling before being sold to customers. Food inventory management can minimize that loss.
  • Lower cost of goods: Food costs are generally 28% to 35% of total costs for a restaurant. That percentage goes up when food is lost or spoils.
  • Better vendor management: Restaurants can use inventory management to more closely track their food and purchases, allowing them to better manage stock levels and payments to vendors.
  • More satisfied customers: Develop repeat customers and keep them happy by having ingredients on hand for all the dishes on your menu.
  • Increased profits: The total cost of goods sold is a major component in the determination of net profits. Inventory management decreases waste, which lowers the cost of goods sold and ultimately increases profits.

Manually managing inventory is useful, but inventory management software can take things to the next level. Among other advantages, these systems can offer insights into expenses and sales that manual tracking simply cannot provide, such as:

  • Real-time visibility into inventory: Inventory management software can integrate with your POS system to track even a single order of a meal and its impact on your inventory.
  • Easy tracking of sales: Inventory software that is integrated with a POS system provides in-depth insights into which items are most popular and profitable.
  • Promotion tracking: Restaurant owners can use inventory software to track the success of marketing, loyalty programs, and other promotions.
  • More effective and efficient tracking: Staff can use inventory software to efficiently and accurately track stock digitally.
  • Automated inventory supply: Inventory management software not only provides insights into a restaurant’s supply levels, but it can also set automated orders that replenish supplies to the appropriate amounts when items reach a specified level, further minimizing both stockouts and waste.
  • In-depth reports: Inventory software provides key performance indicators (KPIs) and other restaurant data that can drive better informed business decisions and increase profits.

8 Restaurant Inventory Management Best Practices

Categorizing and organizing stock, setting automated reorder points, establishing safeguards against inventory mistakes, and using technology to forecast demand are some important means of helping you manage inventory more effectively. Here are additional best practices.

  1. Organize inventory: Put labels on shelving to help staff find items quickly. This practice also makes restocking goods easier and quicker. Identify the most-used goods and keep them in the same, easily accessible spot.
  2. Keep stock levels as low as possible: Use an inventory management system to help keep just enough stock to satisfy customers, without spoilage or requiring unnecessary space that could be used for more equipment or even more tables for customers.
  3. Monitor the sell-through rate: This is a way of tracking how much you sell of a specific item during a given period. For example, if you order 100 steaks in a week and sell 60, you have a sell-through rate of 60%. Track your sell-through rate for different items and groupings of items, such as meat, bread, beer, and produce.
  4. Track all inventory: Track every item your restaurant uses, from steaks and potatoes to napkins and staff uniforms. How often you count inventory will vary depending on the type of item. For example, you may track some perishable items weekly but others, like uniforms, yearly.
  5. Safeguard against mistakes: Consider putting two employees in charge of inventory and have them check each other’s work. You should also create an inventory sheet that corresponds to where items are stored on-site for easier counting.
  6. Employee accountability: Start by training employees on how you’re tracking all food and beverages that go out and cash that comes in. Help them be a part of the solution and understand all the processes in place for inventory tracking. If you use a POS system, give managers permissions for viewing employee activity and inventory reports.
  7. Automate reordering: Inventory management systems can help you set automatic reordering for when stock or supplies reach a certain level.
  8. Use technology to forecast demand: Use POS or inventory management software to forecast demand based on a variety of factors, including previous trends, seasonality, and other preset conditions.

Watch: Restaurant Inventory Management

8 Restaurant Inventory Management Tips

Restaurant industry experts advise getting a sense of each recipe’s complete cost, analyzing your menus based on real prices, and avoiding waste. The following eight restaurant inventory management tips are good places to start.

  1. Cost out recipes: Analyze the exact cost of each recipe based on the price and precise amount of each ingredient. You can calculate this manually, but restaurant inventory management and POS technology make the process much easier.
  2. Carefully engineer menus: Evaluate the popularity of each menu offering and determine the specific cost of each item. This practice can guide you toward ways to economize by increasing sales of certain items, changing the price point, or finding less expensive ingredients.
  3. Use surplus food and ingredients to avoid waste: If your inventory shows a large number of certain foods and ingredients in danger of spoiling, have your chef include them in recipes or offer special appetizers.
  4. Provide bonuses for reduced waste: Consider offering companywide bonuses that reward the reduction of waste from one period to another.
  5. Adjust your product mix: Analyze the performance and profitability of each item. Having enough menu items that are popular and profitable will keep your business hopping and is a key component of leveraging your restaurant’s product mix.
  6. Do some daily tracking of inventory: Use an inventory consumption spreadsheet to track certain items on a daily basis. Understanding how much and what you use frequently can help you detect and better monitor food waste.
  7. Do some basic daily sales tracking: You can’t do a deep dive every day, but you can track some overall sales through a POS and other systems. If an issue does arise, you’ll be more likely to identify and address it quickly.
  8. Use strategies that reduce employee theft: Up to $6 billion worth of goods is stolen annually in the restaurant industry by employees. And more than half of restaurant servers have committed theft from their employers at least once, according to a 2019 study. Some common ways employees steal from employers is by taking food for breaks and meals, voiding cash checks and falsely claiming customers left without paying while pocketing cash. Take steps to identify and prevent employee theft that can cut into already razor-thin margins.

KPIs for Restaurant Inventory Management

Several KPIs can give you a sense of how well you manage a restaurant’s inventory. Keeping an eye on sales, labor costs, and the costs of goods helps you track and measure these and other KPIs to find areas that are doing well and opportunities for improvement. Many indicators focus on the cost of goods and loss of goods. Important KPIs include:

1. Cost of Goods Sold (COGS)

COGS includes all the direct costs of producing a product—in this case, food. To determine, add the purchased stock to the inventory you had at the beginning of a period. Then subtract the ending inventory. Calculate COGS with this formula:

COGS = Starting inventory + Purchases – Ending inventory

Suppose you have $10,000 in total inventory at the start of a period and you purchase $8,000 more. If at the end of that period there’s $9,000 in stock left, then the cost of goods sold was $9,000.

2. Food Loss Cost

Determine average food loss by tracking it over a day or a week; use a period representing an average level of business. Place all food waste in a separate bin. After a specified period, weigh that bin and subtract the weight of the container.

Next, calculate the estimated average cost of fresh food by the pound. Multiply the food loss figure by this number. Add the per-pound disposal costs for the restaurant. Then add how much it costs staff to prepare the disposed of food and multiply by total staff costs. Calculate food loss cost with this formula:

Food loss cost = (Food loss in pounds x Average cost of fresh food per pound) + (Food loss in pounds x Average cost of disposal per pound) + (Food loss / Total food used x Average staffing costs)

For example, a restaurant owner tracks food loss for two days and determines that the food bin has 50 pounds of waste. He estimates that the average cost of all food is $1 per pound. The cost of disposal is $0.20 per pound. During those two days, the restaurant used a total of 1,000 pounds of food. In this scenario, the food waste is 5%. The average food-preparation staffing costs for those two days is $3,200. The food loss cost for those two days is $220.

3. Food Cost Percentage

This KPI determines the food cost as a percentage of total sales. To calculate food cost percentage, use this formula:

Food cost percentage = Food cost / Total sales x 100

For example, if your food cost is $9,000 and total sales in that period were $25,000, the food cost percentage is 36%.

4. Liquor Loss Cost

Liquor loss cost is a bit harder to quantify. Consider assigning a manager to track liquor loss from, for example, spillage, free drinks given to customers to make up for bad service, and liquor consumed by staff. Multiply the amount by the average cost of all alcohol. Calculate liquor loss cost with this formula:

Liquor loss cost = Amount of liquor lost in average day x Average cost of all liquor

For example, say your bar manager has been monitoring liquor loss for a week. The manager tracks an average loss of 3.5 liters of liquor each day due to spillage, complimentary drinks and staff consumption. If the average cost of liquor is $20 per liter, liquor loss cost would be $70 a day.

5. Liquor Cost

If you want to calculate liquor costs separately from overall COGS, the process is similar. Determine the dollar value of inventory at the start of a period. Add the cost of alcohol you buy during the period. Then subtract the alcohol left at the end of the period. To calculate liquor cost, use this formula:

Liquor cost = Starting inventory + Purchases – Ending inventory

If you have $3,000 in alcohol at the beginning of a period and buy $2,000 more and end with $2,500, then the liquor cost was $2,500.

6. Liquor Cost Percentage

Like food cost percentage, this calculates the total liquor costs as a percentage of total liquor sales. To calculate liquor cost percentage, use this formula:

Liquor cost percentage = Liquor cost / Total liquor sales x 100

For example, if your liquor cost was $2,500 and you sold $10,000 in liquor, the liquor cost percentage is 25%.

7. Inventory Turnover

To determine how long it takes to sell a good from the time it is purchased, divide restaurant sales during a period by the average cost of stock during that period. Calculate the average cost of inventory by adding the beginning and ending inventory during a period and dividing by two. Restaurants generally want to turn over much of their stock as possible in seven days or less.

You can also divide the average inventory into COGS, rather than sales. To calculate inventory turnover, use one of these formulas:

Inventory turnover = sales / (beginning inventory + ending inventory / 2)
or
Inventory turnover = COGS / (beginning Inventory + Ending inventory / 2)

For example, say you have a beginning inventory for a month of $30,000 and end with $20,000 in stock. Total sales, or COGS, for the month was $135,000. The inventory turnover during the month would be 5.4, or occurring a bit less than once a week.

Inventory turnover = $135,000 / ($30,000 + $20,000 / 2) = 5.4

8. Prime Cost

Prime cost accounts for all direct production costs. Calculate prime cost by adding total labor costs to COGS. Calculate prime cost with this formula:

Prime cost = COGS + labor

For example, if the COGS for a period was $9,000 and labor costs were $6,000, then the prime cost was $15,000.

9. Prime cost as a percentage of sales

This number represents the prime cost as a percentage of total sales. Calculate prime cost as a percentage of sales with this formula:

Prime cost as a percent of sales = Prime cost / Sales x 100

For example, if the prime cost is $15,000 and total sales are $25,000, the prime cost as a percentage of sales is 60%.

These and other inventory management metrics can help you monitor and make decisions about your stock.

Choosing the Right Inventory Management System for Your Restaurant

Think about the size of your restaurant, what other software you’ll need to integrate with, and the price when purchasing an inventory management system.

  • Consider the size and complexity of your operations: If you run four restaurants that serve 4,000 customers per day, you’ll have far different and more complex needs than a small restaurant that has 100 customers coming through its doors. Inventory management software can benefit any eating establishment, but smaller operations may need only basic software.
  • Evaluate how your POS and inventory management systems work together: If you already have a POS system, make sure it will integrate with the new inventory management system. If your POS system can’t track stock, consider getting an updated POS system that includes inventory management.
  • Analyze the most common features: Ask the following questions about general features, noting which are most relevant to your needs:
    • Real-time tracking: Can the system make adjustments in inventory with every customer order?
    • Automatic purchasing: Can the software create purchase orders for suppliers whenever a specific item starts to run low?
    • Financial assessments and reports: Can the platform track how each item sells and which items are most profitable?
    • User-friendliness: Is the system easy to understand and use for busy restaurant staff that may have high turnover?
    • Scalability: Can you easily make changes in the system as your restaurant or group of restaurants grows?
  • Consider whether you want an in-house or cloud-based system: A cloud-based option allows for tracking stock using multiple devices and across different restaurant locations.
  • Think about cost: Weigh the cost of a system that suits the size of your operation. Don’t buy software that is more complex and more expensive than you need.

Restaurant Inventory Management Case Study

Philz Coffee in San Francisco struggled with disparate systems. Additionally, critical work, like tracking and replenishing inventory and monitoring sales, was all done manually. The company implemented an integrated NetSuite platform to help with accounting, inventory, and sales—and revenue increased by 400%.

Philz Coffee has more than a dozen locations in the Bay Area and recently expanded to Washington, D.C. and Chicago. Its wholesale distribution now reaches 100-plus buyers. As it grows and extends business models, NetSuite for restaurants adapts and scales with Philz Coffee.

Maximize Your Restaurant’s Potential With NetSuite Inventory Management Solutions

Today’s restaurants need a system that takes inventory, tracks sales, and provides other useful data about running the business to help cut costs and improve efficiency. Restaurant owners need a solution that will help them effectively manage their business and increase their profits. Whether you’re looking for a completely new inventory management system or something that will integrate into your existing setup, NetSuite can help.

NetSuite’s restaurant and hospitality management software system is a modern and lightweight solution for restaurants, franchisors and hospitality groups to drive revenue and reduce costs. With a solid foundation of backend financials and inventory in a unified cloud platform, restaurants can elevate their business by adding the functionality required to meet their changing business needs, including point-of-sale integration, commissary and franchise management, and more.

The restaurant industry is notorious for tight margins. Any way to cut costs without cutting corners is worth considering, and inventory management is a perfect candidate. The process involves implementing strategies to optimize inventory levels, reduce waste, and control costs, all of which can have a positive impact on a restaurant’s bottom line. Practices include regular physical inventory counts, perpetual inventory tracking with POS or dedicated inventory management systems, and making data-driven decisions that inform not only regular supplier orders but also menu planning and overall business strategy.

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Restaurant Inventory Management FAQs

What is inventory management in a restaurant?

Inventory management in a restaurant refers to the process of tracking, organizing, and controlling stock levels of ingredients, supplies, and other items needed for food preparation and service. It also involves forecasting demand, placing orders, and minimizing waste.

What do restaurants use to keep track of inventory?

Restaurants can use a variety of tools to track inventory, including:

  • Pen and paper: Some restaurants use physical count sheets and clipboards for manual inventory tracking.
  • Spreadsheets: Many restaurants use digital spreadsheets to record and calculate inventory data.
  • Inventory management software: Specialized software can automate much of the inventory tracking process, integrate with point-of-sale systems, and provide real-time data and analytics.
  • Point-of-sale (POS) systems: Modern POS systems often have built-in inventory management features that track stock levels as items are sold.

What is the best inventory method for restaurants?

The best inventory method for a restaurant depends on its size, type, and specific needs. Many restaurants find that a combination of regular, physical inventory counts and perpetual inventory tracking using POS systems or inventory management software efficiently provides accurate results.

How can restaurant managers ensure effective implementation of inventory management practices?

To ensure effective inventory management, restaurant managers can:

  • Establish clear processes and procedures for receiving, storing, and tracking inventory.
  • Train staff on proper inventory management techniques and make sure they consistently adhere to standard operating procedures.
  • Conduct regular physical inventory counts to verify stock levels and identify discrepancies.
  • Use technology, like POS systems or inventory management software, to automate tracking and receive access to real-time data.
  • Regularly review inventory data to identify trends, optimize ordering, and pinpoint ways to reduce waste.
  • Foster a culture of accountability and communication around inventory and inventory management.

How often should restaurants take inventory?

The frequency of inventory counts depends on the restaurant type and sales volume, but a common approach is to use daily counting of high-value or fast-moving items. Then, smaller restaurants might do weekly full inventory counts, while larger operations might take full inventory counts on a monthly or bimonthly basis, with weekly spot checks. The goal is to strike a balance between having up-to-date, accurate inventory data and not overburdening staff with constant counting.

What are the four types of inventory management systems?

  • There are several types of inventory management systems. Here are four common ones:
  • Perpetual inventory systems, which continuously update inventory records in real time as items are received or sold.
  • Periodic inventory systems, which update inventory records at set intervals, such as weekly or monthly, based on physical counts.
  • Barcode inventory systems, which use scannable barcodes to track inventory movement and automate data entry.
  • Radio frequency identification (RFID) inventory systems, which use RFID tags and readers to automatically track inventory movement and levels.