A good portion of your restaurant's expenses is spent on raw ingredients. If you don't have good control over the cost of items you sell, it is affecting your restaurant business critically.
Restaurants who take inventory management seriously boosted their revenue by 24 percentage in one year.
This guide will help you in understanding restaurant inventory management and the best practices.
Why is inventory management important?
Making a good profit in the food and beverage industry is not easy. About 30 percent of the revenues are spent on raw ingredients. Restaurant inventory management is how you calculate how profitable your items are. Inventory management gives you an overall idea about what are the supplies you need and what are the supplies that move fast.
If you are not managing your inventory properly, you are missing out on your profits through food and ingredient wastage.
If you don't know how much inventory is used, you can never know how much profit you are making. By using the right inventory management process, you can understand how profitable each item in your menu is.
Inventory management is understanding what comes into your restaurant, what leaves your kitchen, and what's remaining.
Restaurant Terminologies:
If you want to master inventory management, you should start getting familiar with the following words.
Sitting inventory
The number of items that are currently available in your restaurant.
Variance
Variance is defined as the difference between product cost and usage cost.
Depletion
The time is taken to use a particular item.
Usage
Usage helps you understand how long each item will last.
wastage
Tracking the number of items wasted through spoils, improper cooking, etc.
Teach your employees
A single person cannot manage the whole inventory management process. When it comes to restaurants with multiple locations, inventory management should be done by the working manager and they should deliver precise reports when they log out.
Your employees in the kitchen should also be noting down wastage whenever they see it. It may be hard to teach them the math behind it, but you can ask them to take notes of everything so it is easy for you to cross-check later.
Keep track of your sales
No matter how busy you are, spend a little time every day to track your sales. When you do this, you will notice changes in the demand for a particular item and you can make purchasing plans based on that.
Make sure you get detailed sales reports from your point of sale system. Without that, tracking sales will be a great task.
Keep something extra
You should keep some extra inventory for fast-moving items. This will help you in times of emergency like a sudden rush. Make sure you switch this one regularly so that it won't go bad.
Step 1) Check inventory everyday
Have a schedule for inventory checking. The best way is to check your inventory every morning. This way, you will have a clear idea of what you have
Step 2) Plan your inventory
Organize your items and implement first in first out method. Plan an order in which the items should be used. Train some of your staff on the FIFO method.
Step 3) Track everything
Use excel sheets or your POS Software to keep track of all items. Add detailed descriptions to get the most out of your inventory.