One of the crucial aspects of owning and running a restaurant is restaurant inventory management. With increased competition, restaurants are constantly trying to gain new customers while cultivating repeat business and expanding their clientele. This makes it crucial to have accurate restaurant inventory tracking methods.
The process of managing raw materials and food products that come into your establishment is known as restaurant inventory management. During this process, you should also consider excess inventory you might have, shrinkage, and other human factors like variance.
When you maximize your inventory with restaurant inventory management tips, you save time and money. It’s a way to guarantee that your consumers will get the freshest products. It can also keep employees pleased since you’ll equip them with vital resources to retain clients. That's why it's important to utilize the inventory turnover formula.
Below you’ll find five restaurant inventory management tips that can help you and your business succeed. You'll also learn how to ensure proper restaurant inventory tracking. Be sure to explore the benefits of ERP and the ERP meaning.
Top 6 Benefits of Restaurant Inventory Tracking
The inventory management process is important because it can help restaurants keep the proper amount of food and ingredients on hand. Restaurants must have adequate stock levels to serve their customers while avoiding spoilage. Restaurants have a greater chance of succeeding long-term if they use effective inventory management practices.
Restaurant inventory management comes with quite a few benefits. It can help decrease food loss, waste, and more. Here are six great benefits of restaurant inventory tracking to consider:
- Less Food Loss
When restaurants purchase food, about 4-10% of it is wasted before it reaches the consumer. This happens because they’re buying too much food at one time, and it ends up spoiling before it’s used.
Proper restaurant inventory tracking and food and order management minimizes this loss. Though you can't control spoilage prior to stock reaching your restaurant, you can control it once it arrives. Ensure your food storage bins and locations are cleaned regularly and whenever you update inventory using the LIFO method.
- Better Vendor Relationships
In most cases, restaurants purchase their inventory through vendors they’ve already vetted. It’s much easier to work with a smaller group of quality suppliers over the years than constantly switching vendors based on small or temporary inconveniences. Strong supplier relationship management makes it easier to handle restaurant inventory each month, because you'll get all your supplies from the same people at roughly the same times.
- Lower Cost of Goods
Restaurants typically have a lot of total costs to consider, and 28-35% of it is food costs. This cost can increase when food is spoiled or lost.
- Automatic Inventory Restock
You can have automatic inventory restocks when you utilize restaurant inventory management software. This is because many software platforms offer insights into your restaurant’s supply levels. You can create automated processes that can replenish your food inventory when it reaches specific levels to avoid waste. This is essential for restaurant inventory tracking.
- Increased Profits
Net profits are determined by the cost of goods sold, and food is a big factor. Inventory management can reduce food waste and, in turn, lower the cost of goods sold. This can essentially increase profits. You can determine your profits by first calculating the break even point.
- Satisfied Customers
Customer satisfaction is one of the most important goals for any restaurant. By keeping ingredients on hand, restaurants can ensure that their customers are always satisfied. This not only keeps customers coming back but also helps to build a word-of-mouth reputation. Keeping customers satisfied is the key to any successful restaurant business. You may also keep track of customer satisfaction through your loyalty program.
How to Do Restaurant Inventory Tracking
Restaurants can engage in restaurant inventory tracking in a few different ways. They can choose to go the old-school way and do it by hand or utilize a restaurant inventory management system.
1. By Hand
If you’re doing manual inventory management, here’s a best practice to be maximally efficient:
A. Create a Table
Create an inventory sheet with columns including Item, Current Count, Unit of Measurement, Unit Price, and Total Cost.
B. List Items In Inventory
In the table rows, list all the items in your inventory. You can group items that are similar, such as meats.
C. Record the Respective Amounts
Record the respective amounts of each item using the appropriate unit of measurement. For example, meat can be measured by weight or by weighted packages.
D. Take Down the Price
Keep a record of the cost of your inventory items. Use the most recent price to understand better the cost of goods and how much you’ll need to pay to replenish them.
E. Determine the Cost
You can determine the cost of your inventory by multiplying the inventory count by your units and by the last price of the items. Add this number to the total cost column of your table.
F. Utilize Par Inventory Sheets
Restaurant managers or owners will typically have a minimum level for each item they want in stock. This is considered par level. With par inventory sheets, you can see how much of each item should be on hand and when you should purchase more. Checking this is possible with the SKU number on each product.
2. Food Inventory Management Software
Instead of doing all the restaurant inventory tracking calculations by hand, your restaurant can invest in food inventory management software. This is how you can track your inventory automatically.
The ideal food inventory management software will automate purchase orders once they reach the specified reordering point. With such software, you may avoid manually using the inventory days formula to calculate how long you have sitting inventory.
Top 5 Restaurant Inventory Management Tips
In order to master restaurant inventory tracking and control, you’re going to need a few restaurant inventory tips. Here are five strategies to use in your restaurant inventory work:
1. Plan and Organize
Planning and organizing are the most important parts of managing inventory, especially at a fast pace. Every item should have a designated location, and you should know where they are and how to get them. This can keep your employees focused and boost sales.
Try organizing by adding labels to your shelves and keeping track of what’s on them. You can also divide your inventory into different sections.
Following a schedule regularly can ensure consistent and accurate inventory measurements. This can keep track of the cost of goods sold, par levels, food inventory turnover, volatility costs, and utilization. Looking into how to calculate ending inventory and using the inventory turnover formula can also be ideal for restaurant inventory tracking.
2. Monitor Your Inventory Stock
You can lower your food costs by keeping a close eye on your restaurant’s inventory. This includes keeping track of your daily consumption. Make a note of the ingredients that are used daily. Try to get in the habit of making purchases only when it’s required to do so.
Having a close eye on your inventory stock lets you notice when items need to be reordered. Monitoring your inventory reports prevents ordering items that you still have in stock and limits the likelihood of food waste.
Keep track of your item’s yield to avoid food waste. The yield can indicate how much of each individual ingredient is required to make the dish, and you can place your inventory orders accordingly.
Restaurant inventory management techniques and tracking software can streamline this process for you and keep track of your items all in one place. You can also schedule a periodic inventory audit to have a clear view of your inventory and financial reports.
3. Use a POS System
POS or point of sale systems can come in handy for restaurant inventory tracking and inventory management. Restaurants can manage their inventory with cloud-based POS software and integrate different aspects of their process.
4. Utilize Forecasting Tools
Even though forecasting might not always be accurate, it can help restaurants recognize certain trends and respond quickly. The process is based on past data, giving insight into your significant food, labor, and expenses.
You can also use inventory forecasting tools to examine seasonal trends or historical data. This can increase business growth in the future.
5. Investing In Great Software
Restaurant inventory tracking and management software can simplify the entire process of taking inventory. Many software platforms, like BlueCart, have restaurant POS integration that streamlines your processes to serve your customers better.
BlueCart is one of the all-in-one eCommerce platforms that allow buyers to place their orders, connect with vendors, and more. The platform also allows distributors to customize their product catalogs, pricing, fulfilling orders, and more.
Frequently Asked Questions About Restaurant Inventory Management Tips
Why Is Restaurant Inventory Management Important?
Inventory management is important because it helps restaurants keep track of their food and ingredients. This will ensure that all the essential items are stocked to their desired levels, and it can also avoid food spoilage and loss. This is especially important for foods like dairy, meat, and other baseline ingredients. Keeping track of your inventory can help you plan out each menu item, including those on your restaurant QR code menus.
How Can You Take Restaurant Inventory?
Restaurant inventory can be taken by hand using tables and spreadsheets, or you can use restaurant inventory software. This software is commonly used in the restaurant industry. It helps identify sitting inventory and which menu items may be affecting your bottom line. Utilizing such software is the ideal way to do it as it reduces error, automates inventory ordering, and reduces stress
What are Tips for Proper Restaurant Inventory Management?
Some tips for proper restaurant inventory management include:
- Planning and organizing
- Closely monitoring inventory stock
- Managing backorders
- Using a POS system
- Utilizing forecasting tools
- Investing in restaurant inventory management software
These tips are crucial for tracking restaurant inventory and ensuring your stock room accuracy.
What Is Restaurant Inventory Tracking?
Restaurant inventory tracking refers to the method in which you maintain the inventory going in and out of your restaurant. It's possible to track inventory by hand or using inventory management software. With an inventory management system, you'll have an accurate and up-to-date count on all inventory. This also improves inventory control, cost control, and recipe costing.
What Are 3 Restaurant Inventory Tracking Tips?
Three tips for restaurant inventory tracking include:
- Performing thorough inventory counts each week or month, aside from daily checks
- Utilizing restaurant inventory management software for real-time inventory tracking
- Using the FIFO method for inventory