Everything You Need to Know About Restaurant Inventory
Food costs account for 28 to 35 percent of expenses for most restaurants. Miscounted inventory can therefore mean the difference between a profitable year and an unprofitable one. If you miss something, you risk over-ordering, wasting product due to spoilage, or having to 86 your signature dish during the dinner rush.
However, for most restaurateurs, the process of restaurant inventory management is dreadful. Whether you’re new to the restaurant scene or you’re looking for smarter ways to manage your inventory, read on to learn all you need to know about inventory management, including why it matters and how to execute like a pro.
The Importance of Inventory Management
As Chron explains, “One of the worst things you can do in business is to turn away customers—people who are ready to give you their money—because you’ve run out of the item they want. ‘Stockouts’ not only cost you money from missed sales, they can also make you lose customers for good, as people resolve to take their business somewhere that can satisfy their needs.”
Carefully managing your inventory can also help avoid potential fraud. By knowing what inventory you have, you always know when it goes missing. While rare, the occasional employee may steal—a bottle of vodka here, a bushel of broccoli there. While these items seem minuscule in the grand scheme of things, it costs money and can reveal a larger problem with employee respect and behavior.
Additionally, the U.S. Department of Agriculture estimates that 30 to 40 percent of the U.S. food supply is wasted. Using an inventory management solution enables restaurants to significantly reduce over-ordering and waste. This saves space in our landfills and enables more food to get to those who need it the most.
How to Manage Your Restaurant’s Inventory
In addition to keeping an accurate count of everything you have, how long it will last, and when you’ll need to order more, you should also:
- Run projected calculations to understand your future inventory needs based on previous sales cycles.
- Practice “first in, first out.” Sell the food supplies you have in stock, especially perishable items, in the same order in which you received them; otherwise, you’ll be selling fresher items as older ones rot in the back of the inventory line.
- Put the data to good use. If your inventory management process shows that some of your items move more slowly than others, take time to reflect on why. Do you have a dish that doesn’t sell or a drink garnish that guests often ask your bartenders to forgo? Take what you learned and make smart decisions about what should stay on your menu.
How Automation Can Help
Sounds like a lot of work, right? It can be, which is why so many restaurant managers loathe the process and why it was only a matter of time before technology stepped in to take over. Today there are a variety of automated inventory management systems that integrate directly into your point-of-sale system and handle metrics with precision. Automated inventory systems can save operators between 30 and 50 hours per month while increasing margins by over 5 percent.
This guest post is brought to you by Vania Silva, Outreach Coordinator with Upserve, a technology company filled with experts in inventory management. Vania is a regular contributor to Restaurant Insider, covering the best restaurant industry news and trends. When she’s not chatting about restaurant management and POS technology, she’s more than likely drinking coffee and scrolling through TripAdvisor to discover the next best restaurant to try.