5 Tips for Improving Your Restaurant’s Inventory Accuracy

Save money and headaches by keeping better track of what's in stock.
Taking inventory is an unpopular job, but one that is critical to controlling costs and increasing profitability. (Photo: Nestor Rizhniak/Shutterstock)

For restaurant owners, doing inventory ranks up there with bookkeeping and taxes. It’s a necessary evil. But if you do it regularly, you’ll reap the rewards of saving money, calculating menu costs more accurately, cutting back on waste and catching instances of fraud.

“It’s unbelievable how many people don’t do inventory,” said Ed Doyle, president of Boston-based RealFood Consulting. “Some people don’t think they need to, others say they don’t have time to do it. But you can’t calculate an accurate cost of goods without knowing what they are and what you have.”

NCR Silver asked two industry experts to share their tips for implementing a good inventory system or making your current process more precise.

Related: The Four Most Common Reasons Restaurants Fail

Weigh your items


Weigh and record food in pounds in order to get a better picture of how much food your restaurant is going through monthly. (Photo: Tyler Olson/Shutterstock)

According to Steve Zagor, dean of the Culinary & Restaurant Management program at the Institute for Culinary Education in New York City, there is no substitute for weighing food, no matter how tedious this can be.

Anything you buy by weight should be weighed. If you have 20 tomatoes, don’t record 20 tomatoes but pounds of tomatoes. This way, you can accomplish a few things. First, you can check your product weights against what your vendors are saying they gave you.

Second, weighing can give you a fuller picture of how much food you’re going through in reality versus what your recipes call for. If you notice, for example, that you went through 100 pounds of ground beef in a month but your POS system says you sold only 90 pounds worth of hamburgers, your chef might be cooking portions that are inflated.

“A couple points difference can be the difference between lights on and lights off,” Doyle said.

Be consistent

Whatever your method of taking inventory, whether it’s using an app or an Excel spreadsheet, Doyle said you must do the same thing every time to make your efforts worthwhile.

“The only thing worse than having no data is having the wrong data.”
-Ed Doyle

This requires setting standards. For example, if every month you count jars of mayonnaise, you need to use the same process each time to count what’s in an open jar. Are you weighing the jar by ounces or eyeballing the amount and recording it as a quarter or half of a jar? Whatever you do, your processes should be the same every month.

If you weigh tomatoes one month, they should be weighed every month thereafter. If you’re taking inventory of ketchup by the ounce and not by the number of bottles, stick to that system for ketchup.

Zagor said restaurants must also handle fluctuating prices. Some restaurants use the most recent item price when they do inventory. Others use “blended prices,” or averages. Again, whatever system works best for your restaurant should be used consistently.

Use the same employees

Another way to ensure your inventory process is executed correctly is to designate the same two employees to do it. “When you have the same people, you have continuity month-to-month,” Doyle said.

Zagor recommended using two people because you can have one person doing the counting and the other doing the recording. This cuts back on employee error because you aren’t requiring one person to count, remember the number and record it properly over and over again.

Related: Ultimate Playlist to Pump You Up During Inventory

Store items as you count them


Store items in the order that you count them to make your inventory process run more smoothly.
(Photo: Syda Productions/Shutterstock)

Another easy way to make your inventory more precise is to organize your pantry in a way that makes sense for conducting inventory.

“Store things in the same order that you count them,” Zagor said. “Items don’t have to be alphabetical. You don’t want to be running around your storage room.”

Additionally, Zagor said all restaurants should organize their storage areas according to the “first in, first out” method. Any new product you bring in the restaurant should go to the back of the shelf, behind the older product, to keep your stock rotating. “And you don’t want old cans on the shelf if the health department comes in,” Zagor said.

Set a schedule

If you do your inventory randomly when you think of it and not on a regular basis, you won’t get useful data, Doyle said. Every restaurant’s needs are different, but in general, most restaurants should do inventory every month, usually at the end of the month.

If your restaurant’s food levels fluctuate dramatically or you’re struggling financially, it might be a good idea to conduct inventory on a weekly basis until you identify problems, noted Zagor.

“If you don’t know your food costs, you’re driving your business blind,” Zagor said. “Taking inventory, you’ll know how much food has been used, the value of the products on the shelf and what you purchase.”

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