How to Do Food Inventory: What Every Restaurant Needs to Know

by WISK

How to Do Food Inventory: What Every Restaurant Needs to Know

Any restaurant owner or manager would agree that tracking food inventory is one of the most important tasks that come with running a restaurant. Food, after all, is the main component that drives your business. Without a properly stocked shelf, you risk running into issues like missing items or mismanaged orders, which can lead to chaos in the kitchen and ultimately, a poor dining experience for your customers. 

This is where food inventory management comes in. As the term suggests, food inventory management involves the processes and systems used to monitor and manage the stock you're carrying at any given time.

Done right, the practice can keep your restaurant running smoothly and ensure that your kitchen is stocked with everything your team needs to produce the right dishes and keep your customers happy. 

The benefits of doing food inventory for a restaurant

Implementing good inventory practices at your restaurant benefits your business in a number of ways including:

It keeps you in the loop with important metrics and KPIs

Managing and tracking your food inventory will enable you to keep tabs on things like the food quantities you have on hand, along with the value of the inventory that you’re carrying. These measures can then be used to calculate essential metrics and KPIs like:

Food cost percentage. This measures the ratio of your food costs to revenue, and is calculated using the formula: (Beginning Inventory + Purchases – Ending Inventory) ÷ Total Food Sales.

Variance. Inventory variance refers to discrepancies between the stock quantities/values you have on paper versus the actual stock on hand. This is an important measure to track, as a high variance could indicate theft or administrative errors. 

Usage. Stock usage pertains to the amount of inventory you've used up over a given time period. You measure it using the formula: Starting Inventory + Received Product Orders – Ending Inventory

Taken all together, these measures help you make informed decisions — such as what ingredients to order, how much to price your dishes, etc.

It reduces food waste and spoilage

Spoilage and food waste could be costing your bottom line. Research by ChefHero found that food service businesses are losing $2 billion a year in profits because of food waste.

That’s nothing to sneeze at, and if your establishment suffers from food waste and spoilage issues, you’re not just leaving money on the table — you’re virtually throwing it away. 

But with proper inventory management, you don’t have to. When you’re regularly tracking your food quantities, you can avoid over-ordering unnecessary items and ensure that you use up products well before their expiration date.

All that will lead to fresher ingredients on hand, lower food costs, and a healthier bottom line. 

It could surface issues such as theft and admin errors

Managing and monitoring your inventory closely can shed light on discrepancies between your physical stock and the quantities in your system. A large amount of discrepancy could indicate that something is amiss or you could be dealing with problems like theft or admin errors.

Having a tight process for food inventory surfaces these issues sooner rather than later, so you can investigate and resolve them quickly. 

How often should a restaurant do inventory?

The frequency of your inventory checks depends on several factors, including how much stock you have and the type of ingredients you’re using. But the consensus among industry experts is that restaurants should do food inventory at least once a month and strive to do it more often if possible. 

According to QSR Magazine:

Taking an inventory at the end of every month is okay, but in order to be really effective, inventory should be scheduled once a week on the same day. 

Some experts even recommend taking inventory as often as you order, so if you order produce twice a week, then that’s how often you should conduct inventory counts. 

Product or ingredient types should also be taken into consideration. If you’re stocking a number of high-ticket items (such as premium steaks or truffle oil), these things should be counted and measured more frequently. 

Ditto for highly perishable items. The last thing you want is to hold ingredients after their “best by” date, so keeping tabs on these products is a must. Proper stock control practices ensure that you move your inventory quickly and avoid spoilage.

Let’s say you over-ordered milk and the item’s expiration date is approaching in the coming week. With this in mind, you can craft a menu special or promotion on milkshakes, so you can use up the product before it goes bad. 

Restaurant inventory best practices

We covered the basics and benefits of regularly doing food inventory; now it’s time to talk about the process of implementing it.

Below are some best practices to keep in mind when conducting food inventory counts at your restaurant. 

Schedule your food inventory counts

You know what they say, what gets scheduled gets done.

If you want your team to conduct regular stock counts, the task must be on their calendar. 

For best results, schedule to do food inventory on the same day and time of every week or month. This builds consistency and helps your team establish an inventory routine — making the task easier overtime. 

When people know when the next inventory count is being done, they can make the necessary preparations and execute the task more efficiently. 

Assemble a team

Select the right people for the job. The best employees to conduct inventory checks would be those who are already familiar with your stock. Staff members who order and receive products are in the best position to do your inventory because they already have an idea of what you should have.

If you have newer team members, pair them up with seasoned employees who can oversee the process and walk them through different steps.

Make sure your space is clean and organized

Restaurant inventory is already a tedious task as it is; don’t make it harder by having an environment that makes it difficult to count items. 

See to it that the spaces in which products are stored — i.e., your freezer or stock room — are clean and organized. The key is to make items simple to locate and access. Depending on how everything is laid out, you could take steps like:

  • Grouping and organizing items in a logical order (e.g., by category) 

  • Keeping key items at eye level so it’s easier to view and count them

  • Investing in the right shelving or bins in which to store your products

  • Labeling shelves and containers correctly

  • Placing items in transparent containers (whenever possible) to improve visibility

  • Positioning the items in such a way that their quantities, pricing, and expiration dates are facing your employee when they’re conducting inventory counts

Have a plan

Planning is half the battle when conducting stock counts. In addition to knowing when you’re doing it, come up with a plan that details how inventory should be counted. At this stage, you should iron out details like:

Which items or areas to take care of and in what order. Determine the products that you’ll count first or the areas that you’ll start with. For instance, you could choose to count perishables first or decide to kick off the inventory count in the freezer before moving on to the kitchen and other storage areas. 

The people in charge of counting specific items. You don’t want team members bumping into each other — or worse — double-counting the same products. Be organized when you’re delegating stock counts. See to it that people know each other’s assignments so they don’t overlap or get in each other’s way.

Have a solid system for entering data 

Doing restaurant inventory counts includes tracking and entering the following information:

  • Date and time of stock count

  • Item name 

  • Description 

  • Unit price 

  • Quantity 

Depending on your system, you may also need to take note of details like inventory IDs, reorder points, expiration dates, etc. 

In any case, make sure you have a solid and reliable process for entering this necessary information. Some restaurants may use a clipboard and spreadsheet, though this isn’t recommended, as doing things by hand can slow you down. A better option is to use a mobile device so you can count and track your inventory with ease. 

Avoid eyeballing products

Eyeballing or estimating product quantities defeats the purpose of doing your inventory. One of the objectives of conducting physical inventory counts is to get a precise idea of what you have on hand and ensuring that your records are accurate. 

That’s why it’s essential to count every item by hand and record the quantities accordingly. For products that need to be measured (e.g., alcohol) use a scale so you can have precise data on how much you have. It’s tempting to “guesstimate” your inventory levels, but doing so will lead to inaccurate data and ill-informed decision making. 

How to do restaurant inventory quickly

Doing your inventory isn’t the sexiest part of running a restaurant, and if you’re like most people, you want to get the task done as quickly as possible. 

To that end, here are a few tips to help you complete inventory counts faster — without compromising the accuracy of the process.

Train your team

Make sure the employees who’d be taking care of your inventory have the knowledge and skills to perform the task well. Before conducting the stock count, orient your team on your inventory management practices. Get them acquainted with your items and ingredients, educate them on how to use your tools, and ensure they’re well aware of the specific inventory procedures you have in place. 

Doing so will give them the know-how and confidence to conduct inventory counts, in turn minimizing mistakes, and ensuring that counts are conducted as efficiently as possible. 

Digitize your inventory management practices

We’ve alluded to this earlier, but it’s worth fleshing out in more detail. Manually managing your inventory is a recipe for disaster. The costs that come with recording and tracking data by hand (i.e., spoilage, inaccurate data, wasted time) are far higher than the expenses you’d incur by investing in a solid inventory management platform. 

The right solution can automate tedious tasks like calculating inventory values and costs, measuring stock levels, and flagging low-stock. 

This brings us to our next point...

Choose the best app for food inventory

When it comes to counting food inventory, equip your team with a stock management app like WISK Food, which lets them count inventory using their mobile devices. Instead of entering the data by hand, WISK enables users to scan products and confirm counts with their phone, saving time and increasing accuracy while counting. 

WISK even integrates with restaurant POS systems like TouchBistro, Lightspeed, and Square, so you can keep your data in sync. 

Try it for free today and see how WISK can make food inventory a breeze at your restaurant.

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