There are few tasks in the restaurant industry more dreaded than food inventory, but it can be made easier.
Having an efficient food inventory system in place—such as a restaurant management software, our free inventory spreadsheet template, or traditional pen-and-paper methods—is crucial to running a successful food program.
There's no easy way to build out or update a food inventory spreadsheet so we created one for you. Download it below if you're starting from scratch or looking for guidance.
Kitchen Inventory Basics
Sufficiently stocking a kitchen with food ingredients is just the beginning. Inventory is important for maintaining enough product, of course, but it also helps with:
- Calculating your overall food costs
- Building recipes to optimize menu profitability
- Determining how much product you need to order
- Avoiding spoilage or other loss of product
The ultimate goal is to calculate your inventory usage (i.e. the amount or cost of product used) for a certain period.
Many factors play a part in this process, but here is the basic method.
You’ll need to know:
How much stock you had at the beginning of your inventory period
How much stock you have at the end of this period
How much stock you received via deliveries during this period
You’ll take these numbers and use the following formula to determine your inventory usage: starting inventory + received inventory — ending inventory = usage.
When you know your usage amount, you can move on to the next step and turn this information into useful data to better manage your food program. But we’ll get to that in part 2 of this series.
First, let’s look at what needs to be done to find the information that will help you answer this formula.
How to do Food Inventory
In order to determine your inventory usage, you need a beginning and an ending inventory count, taken once at the start of the period and once at the end, respectively. Here are some inventory tips before we get into the details:
Take your count the same way every time; if you start counting from left to right, you should always count left to right.
Keep your inventory periods consistent (i.e. weekly, bi-weekly or monthly).
Find a method that works for you. Some bar managers have one person shouting out names of the inventory items while another replies with the count; others have individuals do the counting and recording alone.
Take inventory while the kitchen is closed so that no product slips in or out while the count is in progress.
Properly train your employees in inventory counting. This includes things like keeping an eye out for specific issues, or recording significant spoilage or other loss of product.
Now, let’s go through a step-by-step example of how to take inventory in the kitchen.
This imaginary establishment has a dry storage, a prep area, a freezer, and a walk-in cooler. This first count will take place at the beginning of our inventory period.
If you’re still using spreadsheets to take inventory counts, we understand, but at least make sure it’s a spreadsheet that works for you (like this free, downloadable inventory spreadsheet).
Arrange the spreadsheet according to the way your inventory is set out in the location. This will save you from having to pull all the items on top of the counter and arrange them alphabetically.
Start in dry storage. Count the items the way they’re positioned and, if needed, filter them alphabetically on the spreadsheet when you’re done. Include the product’s type, brand, name, and case or package size. Also include a column for your prep area, freezer, walk-in, or any other parts of the restaurant where food or kitchen related items are kept.
The easiest (and most commonly used) counting method is to visually take note of how much product is in each package or container, separating it into tenths. This is an estimate whether the package is half full (0.5), a third full (0.3), etc. This works for product that is based on weight, but if you are counting product that has individual pieces you may prefer to use “units” or “pieces”. As long as you are able to convert cases to unit and vice versa to ensure you have an accurate total inventory at the end of your count you are fine but this conversion can sometimes get complicated.
Repeat this process of counting every product, and enter the numbers onto the sheet, separating them into produce, dairy, protein, or other categories you want to arrange by.
Repeat this process for the prep area, freezer, and walk-in cooler. Your counts will likely vary here, based on a mix of cases and units, rather than just individual units only, so you may need to add another column to your sheet to account for this. For instance, if a case comes with 12 pieces, you might want a column in the excel sheet that can convert from case to units and vice-versa.
Finally, take your sheet and add up the totals for each category.
At the end of the inventory period—whether it be a week, two weeks, or a month—you’ll take all these counts again, repeating the exact same process. This will leave you with a beginning and an ending inventory count.
Over the course of this period, you’ll sell and receive more food inventory. Keep a record of how much product you take in (this should be in your invoices from the week before), and the product you sell should be recorded in your POS system (we’ll look at that more in part 3 of this series).
In a new excel sheet, enter the totals of all your food categories into three columns:
Take the simple formula from before: starting inventory + received inventory — ending inventory = usage.
You now have your inventory usage for this period.
Once you determine your usage, you’ll be ready to do your pricing and ordering, which we’ll cover in part 2. We’ll look at how to incorporate costs into this sheet in order to identify total prices of both purchases and sales, and then we’ll look at things like pour costs and invoicing.
Check out the next two articles in this series:
As always, we at BevSpot are always available to be helpful in any way!