The Basics of Restaurant Inventory Management

restaurant inventory

Posted: Mar. 14, 2019

For new restaurant owners and managers, getting a handle on inventory has its share of challenges. Weekly inventory checks and labeling systems call for rigor. It’s not fun, but that’s no (good) excuse for not counting inventory.

Here’s why: Inventory control is tantamount to your restaurant’s success. After losing control of their counts, many great foodservice operators have closed down in less than a year. A restaurant that can’t reduce its food waste or over-orders ingredients is throwing out money. In an industry where every penny counts, it’s wise to learn the basics of keeping inventory.

A surprising number of foodservice operators don’t:

  • Have written records of their purchase orders or sales reports
  • Take inventory regularly
  • Use a restaurant POS system to keep track of inventory

If this sounds familiar, change your routine and you’ll start seeing a change in operations within one month.

Stick to a regular schedule, use the best technology, and keep accountability, and you can manage restaurant inventory. With a strong understanding of how much food and drinks are ordered versus how much is consumed or thrown out, you can efficiently manage your COGs and have total control over the finances.

See below for the basics of managing restaurant inventory.

Use the Inventory Feature of a Restaurant POS System

Restaurant point of sales are so popular because they’re easy to use and they help restaurants save money. They are even simplifying restaurant analytics by letting managers make smart changes that increase profitability. They also count inventory.

Knowing how much is bought, prepped, and sold is the reason to run inventory—and a POS system does this for you. The inventory features in a restaurant POS can lighten the burden.

For most new restaurant owners and managers, inventory is like a never-ending grocery list they have little control over. Ingredients are bought and prepped, then sold. And every day the same process continues.

When it comes to running their business, new managers are likely to opt out of using a formal inventory management system. Big mistake. With every submitted order, the POS will deduct exact quantities from the inventory. When ingredients are getting low, an alert is sent to the kitchen. The same goes for menu items; before something is 86’d, the tablet shows exactly how many orders are left so servers aren’t running around trying to find out themselves. If you have multiple locations, you can link their inventories so that if one place is running out of an essential ingredient, you can pull it from another location instantly.

Roadmaps have been replaced by GPS systems because of their accuracy and ease of use—the same applies for inventory systems. If you don’t already, start looking into how your POS can help you manage inventory.

Take Inventory Like Clock-Work

The trick to inventory management is taking inventory at least once a week. If you are purchasing small quantities on a daily basis, it’s recommended to increase that to two or three times a week. If it sounds excessive, try it first. You’ll see that updating inventory records frequently and regularly make controlling your food costs even easier.

Here are other types of decisions inventory records can help you make:

  • Ordering enough ingredients for your most popular dish without over-ordering
  • Reducing food waste
  • Ordering a different ingredient that doesn’t expire so quickly
  • Creating daily specials that use food nearing its expiration date

Inventory control reveals problems areas, makes sense of fluctuating sales reports, and protects your bottom line. If it’s unclear how much of your operating budget goes toward purchasing food, money could be funneling into dark holes.

Be Precise

Do you look at your shelves and take a mental inventory? Do you rely on estimates to have a ‘general idea’ of which ingredients are available? How many times have you written down an approximate number instead of counting the exact number of tomatoes you have?

Guesstimates are harmful, not helpful, for your business. If there is always a scramble to make food because ingredients are running out, you can change that by taking precise inventory counts.

A restaurant’s success is bound by its accurate inventory sheets. A sizeable percentage of the budget is allocated for food costs, and inventory shows when you are overspending. Cutting back on certain ingredients or finding a way to spread an ingredient throughout a menu can help. These kinds of changes could save you hundreds or even thousands of dollars every month. 

 Reduce Food Waste, Theft, and 86’d Dishes

It’s time consuming and tedious, but there are several huge benefits to taking inventory:

  1. Inventory lets you pinpoint and reduce waste, such as over-ordering produce that spoils and is thrown out. The money saved here can be put towards marketing, salaries, or renovations.  
  2. Correct purchase orders for the right numbers will prevent frequent 86-ing of menu items too early in a shift.
  3. Inventory reveals theft taking place.

Inventory is also a great way to make your staff responsible, so don’t feel like you have to do this alone every time. Delegate inventory to someone you trust so that maintaining it becomes a team effort.



Posted: Mar. 14, 2019 | Written By: Emma Alois


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It’s a fact: The quality of your restaurant’s POS system can mean the difference between profit and loss. Having the right POS solutions positively affects the functionality of every aspect of your business. From maintaining optimum customer care standards, to your ability to manage your inventory, effective POS can help your restaurant succeed beyond your wildest expectations.


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