One of the crucial aspects of owning and running a restaurant is restaurant inventory management. With an increased amount of competition, restaurants are constantly trying to gain new customers while cultivating repeat business and expanding their clientele.
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 any overages you might have, waste, and human factors.
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 be equipping them with vital resources to keep clients coming back. 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. Be sure to also explore the benefits of ERP.
Why Pay Attention to Inventory Management
The inventory management process is important because it can help restaurants keep the proper amount of food and ingredients on hand. It’s essential for restaurants to have enough stock, so they can serve their customers while also avoiding spoilage and loss. 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 some benefits of restaurant inventory management tips 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 purchasing too much food at one time, and it ends up spoiling before it’s used. Proper food and inventory management can minimize this loss.
Better Vendor Management
In most cases, restaurants purchase their inventory through specific vendors. With inventory management, you can track the food and purchases, payments, and more.
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
When you utilize restaurant inventory management software, you can have automatic inventory restocks. This is because many software platforms offer insights into your restaurant's supply levels. You can create automatic processes that can replenish your food inventory when it reaches specific levels to avoid waste.
Net profits are determined by the cost of goods sold and food is a big factor there. Inventory management can help decrease 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.
Restaurants can gain repeat customers and work on keeping them happy by having ingredients on hand.
How to Take Restaurant Inventory
There are a few different ways that restaurants can take food inventory. They can choose to go the old-school way and do it by hand, or they can utilize restaurant inventory management software.
If you’re taking inventory by hand, here’s how you should do it to be the most efficient:
Create a Table
Start by creating a table for your inventory with columns including Item, Current Count, Unit of Measurement, Unit Price, and Total Cost.
List Items in Inventory
In the rows of your table list all the items in your inventory. You can group items that are similar, such as meats.
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.
Take Down the Price
Keep a record of the price of your inventory items. Use the most recent price to better understand the cost of goods and how much you’ll need to pay to replenish them.
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.
Utilize Par Inventory Sheets
Restaurant managers or owners will typically have a minimum level for each item that they want to have in stock. This is considered to be “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.
Food Inventory Management Software
Instead of doing all the inventory 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. You’ll also have the ability to implement bath tracking and reduce food spoilage. Overall, similar inventory management software will reduce lead times, and you won’t have to worry as much about the back-end tasks.
Top 5 Restaurant Inventory Management Tips
In order to properly manage your restaurant inventory, you’re going to need a few tips. Here are some to consider during your process:
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 as well as how to get to 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 on a regular basis 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.
Monitor Your Inventory Stock
By keeping a close eye on your restaurant’s inventory, you can lower your food costs. This includes keeping track of your daily consumption. Make 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.
By having a close eye on your inventory stock, you can notice when items need to be reordered. Monitoring your inventory can also avoid ordering items that you still have in stock and potentially avoid food waste.
Focusing on the sell-through rate can be beneficial to your restaurant during the busy seasons. You’ll be able to foresee certain items running out by planning and managing properly.
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 automate this process for you and keep track of your items all in one place.
Use a POS System
POS or point of sale systems can come in handy when doing inventory management. Restaurants can manage their inventory with cloud-based POS software and integrate different aspects of their process.
Utilize Forecasting Tools
Even though forecasting might not always be accurate, it can still help restaurants recognize certain trends and respond quickly. The process is based on past data which can give you 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.
Investing in Inventory Management Software
Restaurant inventory management software can simplify the entire process of having to take inventory. Many software platforms, like BlueCart, can sync to POS systems and streamline your processes, so you can better serve your customers.
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, fulfill 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 your menus, including 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. Utilizing such software is the ideal way to do it as it can reduce error, automate inventory ordering, and reduce stress.
What are Tips for Proper Restaurant Inventory Management?
Some tips for proper restaurant inventory management include:
- Planning and organizing
- Closely monitoring inventory stock
- Using a POS system
- Utilizing forecasting tools
- Investing in restaurant inventory management software