Bar & Restaurant Management Blog

How to do Inventory at a Restaurant: Your Quick-Start Guide

Written by Krista Dinsmore | February 20, 2024

Are you ready to dive into one of the secrets of our trade: nailing your restaurant inventory? Trust us, getting your inventory right is like having a superpower in the restaurant industry, saving you cash, cutting down waste and keeping your customers coming back for more. 

So, how do you master this art and better achieve your business goals? 

First things first, managing your inventory isn’t just counting food items and bottles. It’s about staying on top of what you’ve got so you don't end up with too much or too little, as well as gaining critical insights that enable you to boost profit margins and better serve your customers. 

Inventory at your restaurant is a balancing act that keeps your cash flow happy and your kitchen running smoothly. 

To help you do exactly that, we’ve listed seven tips that will help show you how to do inventory at your restaurant and kick-start your pathway toward increased profits and business growth. Let’s get started! 

1. Set Up Your Inventory Management System 

The right tools make all the difference when it comes to inventory. You want something that fits the unique needs of your restaurant. This could be a simple spreadsheet or a more advanced inventory management software that integrates with your Point of Sale (POS). 

Organizing your inventory is also key. Group items by category – like dairy, meats, vegetables, and beverages – and use consistent naming across the board. It’ll save you a ton of time and headaches.

Bar Inventory Spreadsheet or Bar Inventory System: What’s Best?


2. Implement a Routine Inventory Count
  • Frequency: Decide how often you’ll count inventory. Options include daily, weekly, or monthly counts, depending on your restaurant's size and menu complexity.
  • Timing: Schedule counts during quiet periods (like early mornings) to ensure accuracy and minimal disruption.

3. Inventory is a Group Effort

Getting your team involved in inventory management is crucial. Assign a few team members to take the lead. They need to understand the importance of their role and how inventory affects your restaurant's overall success. Regular training sessions are also vital. They help your team stay sharp and confident in handling inventory duties.


4. Technology is Your Friend

Integrating your inventory management with your POS can make a world of difference. It streamlines the process by automatically updating stock levels as sales happen. Also, dive into data analytics. It's like having a crystal ball that gives you insights into your inventory trends, helping you make informed decisions.

Metrics that you should be analyzing, include: 

  • Inventory Turnover Ratio: This tells you how often you’re replenishing your inventory. A high turnover ratio could mean strong sales, while a low ratio might indicate overstocking or menu items that aren’t selling well.
  • Cost of Goods Sold (COGS): Knowing your COGS helps in pricing your menu items appropriately and identifying areas where you can cut costs.
  • Variance Reports: These reports highlight differences between what you should have used and what was actually used, shedding light on potential waste or theft.
  • Stock-Outs and Overstock Reports: Tracking items that frequently run out and those that are consistently overstocked helps in adjusting your orders to better match customer demand.


5. Keep it Fresh with the FIFO Inventory Method

The FIFO method is a game-changer for managing perishables. Always use your oldest stock first to minimize waste. Make sure every item is date-labeled upon arrival. It's a simple step that helps maintain order and freshness in your storage areas.

How to Calculate FIFO for Successful Restaurant Inventory


6. Monitor and Analyze Your Inventory for Actionable Insights

Regular reviews of your inventory against sales data are essential. They help you spot trends and adjust your orders accordingly. For instance, if you notice a particular ingredient isn't flying off the shelves as it used to, you can reduce your order size to prevent waste.


7. Build Strong Supplier Relationships 

Having strong partnerships with your vendors can be a game-changer when it comes to successful inventory management. Strong supplier relationships can lead to faster turnaround times on receiving inventory (which helps ensure your customers are satisfied), as well as potential discounts that help you save money. 

When working with your suppliers, keep seasonal ingredients in mind. Seasonal goods are often more cost-effective for your restaurant and allow you to create fresh dishes and “seasonal specials” that keep your menu exciting for your patrons.

Interested in learning more about how you can use inventory data to grow your business? Get in touch with Sculpture Hospitality today