Food Inventory: Perfect Your Restaurant Management Checklist

What Is Food Inventory Management?
To put it simply, keeping food inventory records makes for a great loss prevention tool and profitability measure for your restaurant. Having an eye for such business records is essential and keep in mind that one may never know what they can earn if they don’t realize what they losing (spoilage, theft, etc) in the first place.

Inventory tracking may include all important details about:

What supplies are received by the restaurant
What goes out of your kitchen
What is leftover in the back of the house

Knowing these exact numbers will be of help in understanding where your business supply (and money) is going. To track and realize what is lost and what is found on your shelves is one thing, and it’s another to determine exactly how and why.

Always take into consideration these areas of loss; spillage, employee mistakes, remedying customer complaints, staff meals, and theft. Accidents are bound to happen, customers are not always satisfied
and all the other inevitable truths that come with running a restaurant should be taken into account in regards to keeping inventory and tracking the profitability of your business. It is one way to truly determine your earnings in a day, week, or year.

These are among the most common terminologies you should familiarize yourself with to better your skills in inventory keeping and master how to talk the talk...

Sitting Inventory

The amount of product (or dollars worth of product) in-house. This may depend on your business or your preference as a business owner, but you can always refer to sitting inventory as either dollars worth or physical amount. Whichever is utilized and kept in the records, however, should be consistent and sticks to one unit of measure.

Depletion

The amount of product (or dollars worth of product) used in a set period of time. These numbers can be based upon daily, weekly, or monthly sales. This is also oftentimes calculated using the sales reporting data from your own POS.

Usage

The amount (or dollars worth) of sitting inventory divided by the average depletion in a set period. With the formula:

Sitting Inventory ÷ Average Depletion (during a given time period) = Usage

For instance, if you have four gallons of cheese and you plan to use one gallon per week, you are left with four weeks of usage of the said supply.

Variance

This refers to the difference between your product cost and the usage amount cost. Let’s say your inventory is down $100 worth of meat at the end of the day, but your POS says you only sold $95 worth of meat. This makes your food cost variance -$5, leaving you with $5 worth of chicken that is still unaccounted for.

It can also be a percentage to help you make easier comparisons. In this scenario, -$5 (the variance amount)/$100 (the usage amount cost) = -5% variance.

Best Practices In Inventory Tracking
Automated Inventory Management

This may be the most accurate way to track inventory among others. This method requires you to manage records through your restaurant POS system. This management software is a metric that business owners use to compare side by side their theoretical usage for a bigger picture of how inventory works through the restaurant.

Pros: It’s the most accurate method of tracking inventory for your restaurant.

Cons: It’s not always available on all POS platforms. Very few POS systems have integrated inventory management, so make sure your restaurant point of sale platform has this capability for convenience.

Par Inventory Sheets

This inventory management tool uses tracking methods by categories of food type and/or food supplier. Managers can often set levels of how much of a certain food supply they want in-house, also known as a par level.

During the next following inventory order, these par inventory sheets can serve as a guide to what and how much they need to be ordering based on their sitting inventory, how quickly a certain supply moved past the shelves, and any upcoming events they may want to prepare for.

Pros: It’s intuitive and just requires simple math and forecasting to come up with ideal inventory orders within your benefit.

Cons: The only usage is taken into account – leaving out cost and variance. Because of this, over portioning and theft may go undetected if not compared to the actual variance of your records.

Wing It

To clear things up: this is not necessarily considered a legitimate inventory strategy, but it would be a lie if we said no restaurant orders inventory based on their gut or a quick once over of the walk-in.

Mistakes may cost you more than expected- this is not a legitimate method to keep inventory records, and it’s time to rethink your ways if this has been your strategy up until now.

Winging it to keep track of your inventory paves a much bigger threat of theft, incomplete reports of records, and a high food variance that’s detrimental to the bottom line.

Pros: No inventory is needed to be done.

Cons: You’re putting your business at more serious risk.

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