Did you know that one of the most common hidden expenses for restaurateurs is down to poor food and beverage inventory management processes? Yet, despite this, many restaurants are still struggling to implement successful inventory management processes.
Unfortunately, poor inventory management leads to hidden costs that have a huge impact on your bottom line.
Without the proper processes in place, these hidden costs are almost impossible to find. They could stem from any part of your inventory process, from overpaying vendors, unfollowed recipes, overpouring beverages or product spoilage.
It’s crucial to the profitability of your business that you implement inventory management processes that give you complete visibility into your inventory. This helps you control spend and improve processes before they become a problem - making your business more profitable.
Tracking and managing inventory isn’t easy, however. Most restaurants are still using time-consuming and manual spreadsheets to manage their inventory. This unfortunately does not work.
To effectively manage your restaurant’s inventory, your business needs to invest in a beverage and food inventory management system that has been designed to specifically automate the inventory processes that help you prevent waste, reduce spend, improve efficiencies and make better product purchasing and usage decisions.
To give you an idea of why your restaurant may be struggling from hidden costs, we have created a list of the five top reasons why you simply cannot effectively track your restaurant’s inventory with a spreadsheet.
#1 - Spreadsheets lead to human error
Manually entering data and formula into spreadsheets is time-consuming and complicated, and this leads to one huge problem - human error. This by no means is a fault of your employees, manually processes have always (and always will) lead to human error.
The problem is, one simple error in your inventory management processes will have a ripple effect on everything you see, and that will impact your inventory decisions moving forward. To ensure you are able to make more insightful decisions and reduce spend in your inventory process, it’s crucial your inventory management is accurate and reliable.
#2 - They require a huge amount of work
Each time you add a new product to your inventory, your employees will need to add it to your spreadsheet. Each time your vendors change prices you will need to change the formulas on your spreadsheet. And if you want to change how you view your inventory (perhaps you want to view it by category) you’ll need to make significant changes to your spreadsheet.
Adjusting a manual spreadsheet takes a huge amount of work, and that takes away from what your restaurant really should be focusing on - creating high-quality dishes for your customers. Inventory management systems can auto calculate and update in seconds, without requiring your employees to spend their time working out complicated formulas.
#3 - Spreadsheets don’t measure variance
Variance in the hospitality industry is the difference between the cost of goods sold and the cost of goods used, which gives you insight into how much product you are paying for, how much of that product you are using and what your profit from that product is.
Most restaurants use spreadsheets to track the product on-hand and to calculate what product they have used by adding in the purchases.
Some might even divide the used cost from the spreadsheet by their sales to give them their actual cost percentage. But they don’t calculate their ideal cost percentage and compare that to their actual number. They usually just compare it to a past actual percentage or some “desired” goal.
#4 - You can’t automate your processes with a spreadsheet, resulting in wasted time
We’ve spoken about the amount of work that goes into creating, and changing a manual spreadsheet, but did you know that you could be saving a huge amount of work and time by using a system that automates all of these processes?
Unlike spreadsheets where every process needs to be entered manually, an inventory management system will automate how you monitor, track and measure every step in your inventory management operations. Integrations with other technologies, such as point-of-sale machines, will enable your inventory management system to automate your data even further.
#5 - They make it difficult to train your staff on inventory best practices
Implementing an inventory management strategy into your restaurant’s operational processes requires your employees to be fully trained, updated and onboard with each process to make it a success. A crucial part of that is the ability for your managers to clearly communicate insights from your inventory data to their employees, showing them where they can make improvements in their job to help the business achieve its goals.
Even if you have managed to nail the data in your spreadsheets, you’re simply not going to engage and train your employees by presenting them a mass of numbers on an Excel document.
Inventory management systems make it far easier to train your staff by providing your business with performance reports and analytics that make it seamless for restaurant managers to communicate to employees about how inventory processes can be optimized and improved for superior results.
Are you concerned that your current inventory management processes are leading to hidden costs and inefficiencies across your restaurant? Reach out to Sculpture Hospitality today. Our team of locally-based inventory experts would love to answer any questions that you may have.