Great Tips for Restaurant Inventory Management

What Is Restaurant Inventory Management and What Are The Benefits?

Restaurant food inventory is used to measure profitability and prevent losses within a restaurant. A small business in the restaurant industry should understand the value that tracking inventory has on lowering food costs.

Why is it important to track and manage restaurant inventory?
Restaurant operations can better understand total cost breakdown compared to earnings by having an inventory process in place. Without a way to manage inventory, the earnings potential could be skewed.

Inventory tracking means knowing-

• Stock levels
• Sitting Inventory
• Ending Inventory
• How Much Food is Going Out

Without knowing the exact inventory count it will be impossible to use inventory as a basis when planning and pricing menu items.

For example a restaurant bar will value inventory when offering up a round on the house. They'll need to count inventory losses that were result of-

• Spillage
  
• Employee mistakes
• Remedying customer complaints
• Staff meals
• Theft

Full service and quick service restaurants alike use inventory control to determine profits and loss. Not knowing which supplies are being wasted and which are the sitting inventory can complicate purchase orders with vendor management.

What Are The Tips for Restaurant Inventory Management?

Effective inventory management is essential to successful restaurant operations. Restaurant inventory is part of long-term goals and the bottom line for businesses in the restaurant industry.

Having an inventory system in place will provide better results. Managing inventory supply and food inventory can reduce food waste which ultimately saves money.

7 Restaurant Inventory Management Tips

1. Use a Restaurant POS System, and Take Inventory by Hand
A POS system has many advantages including automated inventory tracking. Most restaurants' POS systems have inventory software included that provides real-time data based on customer orders. However, the inventory system doesn't account for certain types of inventory loss like spoilage or spillage. Itemized inventory for those scenarios and customer complaint resolutions from incorrect food prep must be done by hand as the POS system won't document it. Taking inventory by hand along with the restaurant inventory management software ensures a more accurate report.

2. Have the Same Staff Member(s) Track Inventory
It's a good idea to have a designated team of staff members do the inventory tracking on the same day and time. This will make identifying inconsistencies in the inventory clearer. Because these dedicated few are taking inventory, they'll be able to discern patterns and discrepancies easier. Make sure the staff doing the inventory tracking is trained on any inventory management software being used. Besides using the inventory software, they should also know about the best practices for inventory management.

3. Maintain a Consistent Schedule to Manage Inventory
Along with a dedicated team, the inventory tracking should be done on a specific schedule. Keeping a schedule provides a more accurate measure of the standing inventory. For example, the inventory software can be set up to check perishables daily while other ingredients are done bi-weekly. Having an inventory management system makes it easier to adjust the schedule.

4. Follow the First In, First Out (FIFO) Method
First in, first-out (FIFO) is standard in the restaurant industry. It means that the items received first should be used first. According to FIF, any food storage area like a freezer or pantry should be set up according FIF) to reduce spoilage and food waste.

5. Create an Inventory Sheet for Food Waste
An inventory list will highlight ingredients and supply quantities. However, using a food waste inventory sheet will show the lost inventory that's not accounted for in sales. Having this information lets a restaurant owner come up with a plan to reduce losses.

A restaurant POS system may include a food waste sheet that provides a place for this information with the following columns-

• Time and Date
  
• Item
• Amount of Weight
• Reason for Waste
• Employee Initials

6. Use Surplus Ingredients to Minimize Food Waste
Excess ingredients can be repurposed into existing dishes or used for specialty menu items. Rather than let the ingredients spoil, they can be used to increase sales.

7. Use Past Inventory Insights for Future Purchase Orders
Having all the methods above in place will provide insight for future purchase orders. Information from the POS system and hand inventory tracking will predict future trends for a more informed economic decision.

Key Takeaways: 7 best practices to ensure accurate inventory counts-

1. Utilize POS Systems, and Take Inventory by Hand
2. Have the Same Staff Member(s) Track Inventory
3. Have a Consistent Schedule to Manage Inventory
4. Follow the First In, First Out (FIFO) Method
5. Create a Sheet for Food Waste
6. Utilize Surplus Ingredients to Minimize Food Waste
7. Use Past Inventory Insights for Future Purchase Orders

Conclusion to Restaurant Inventory Management

• Restaurant inventory management is a system restaurant owners use to track product inventory levels that move in and out of the restaurant.
• Managing inventory keeps purchase orders under control.
  
• Effective inventory management is essential to day-to-day restaurant operations.
• Restaurant inventory is tied to long term goals and controlling the bottom line.