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May 24, 2022
Are they worth it? 6 benefits to taking regular restaurant inventories
Written by: [me] marketeam
With over 350 collective years spent working in restaurants, we know a thing or two about taking inventories. Mainly we know how big of a pain they are to do, but we also know how important they are for profitability and making running and working in a restaurant much easier.
There are a few different ways to take inventory (including not taking inventory at all). Depending on the size of your restaurant and size of your menu, your inventory needs may differ from your friend’s restaurant down the street.
In order to help encourage any operators out there who might be on the fence about regular inventories, we’ve compiled a list of six benefits to taking inventories.
Six Benefits to Taking Inventories Regularly:
This one is probably obvious, but a good reminder nonetheless. Unless you’ve got a side hustle as a spirit medium, accurately predicting order amounts without taking inventory first can be a pricey gamble. Even if you’re only able to do a quick count of your highest volume or priced products as you order, you’ll still be a lot more protected from under or over ordering every week.
Weekly or bi-weekly inventories will save you even more time when it comes to making accurate orders, because you’ll have a better idea of which products you tend to have an excess of or run out of on a regular basis.
You might be skeptical about how much time that would actually save you, but we promise it will and recommend thinking about it in terms of mental energy savings too.
Let’s say you have a beef short rib entree that is pretty popular on your menu (because duh, it’s beef short rib), and normally you go through about 70lbs a week.
Or so you thought.
Summer is coming, which means temperatures are rising, and braised beef short ribs just don’t seem to be as appetizing to your guests when it’s 90º outside. Weird.
Even if you sell just 5lbs less a week, without adjusting your ordering, within a month you’ll end up with 20lbs of excess short rib close to expiring, taking up space in your walk-in. Now what?
You’ll either have to throw it away, increase your portion sizes to make up for the excess, which increases your food costs, or come up with a new special that uses it before it expires (and make sure that special doesn’t increase your food costs either). Is all that extra work worth taking a few extra minutes to see what you’ve got on hand before ordering? We’ll let you decide.
Keep guests happy
Along with optimized ordering, your guests will be happier if your kitchen is able to stay fully stocked. Taking inventory won’t ensure that you’ll always have enough products (thanks, supply chain shortages), but it will give you better insight for ordering, which in turn will give your guests a better experience. Your servers will probably thank you too as it prevents them from having to be the bearers of bad news.
Another benefit to taking and tracking regular inventories is being able to keep a better eye on expiring products. This benefit is less for products that you use on a daily basis with a higher inventory turnover rate and more to make sure those lesser used, back-of-the-wall type products don’t miss out on their chance to be counted.
Being aware of the excess food items informs your ordering for next time and gives you the opportunity to use it and get your money’s worth before it goes bad.
Got a few extra gallons of milk that are about to go bad? Make your own dulce de leche in house and add it as a dessert special. If it’s on your shelves, you’ve already paid for it, so get creative and recoup those costs!
Weekly inventory checks will help prevent waste (which we have a handy dandy worksheet to help spot) and alert you to expired items living on your shelves, which brings us to…
Keep the DOH happy
There is nothing quite like the thrill and adrenaline-fueled scramble that is hearing that the Department of Health has just walked in the door. Who knew that someone in a polo holding a clipboard could cause such a visceral reaction? And who knew weekly inventories could be the antidote, keeping you calm, cool and collected? Spoiler alert- we did. We knew. And now you do too!
As you take inventory every week, you can ensure that products on shelves have been stocked first in first out (FIFO), are still good to use with use-by dates on them, and are being stored at the correct temperatures.
If you’re into role play, you can even pretend to be a health inspector during weekly inventories. We won’t judge you for it, but no guarantees that your coworkers won’t.
We know that food safety is something restaurants care deeply about, and while this blog may have an extra portion of humor and sass, food safety is really not something to laugh about for operators.
Hefty fines, reputation damage from citations or a failed inspection, or in the worst case, endangering a customer, can inflict lasting damage. Even in the most rigorous of kitchens, it’s human to be a little anxious when the health department stops by, so adding in an extra check during your inventories can provide additional reassurance that your kitchen is operating safely and will help you ace that inspection.
Accurately track food costs
From a profitability standpoint, regular inventories are a must. Not only for tracking usage and preventing waste, but also for informing your plate and food costs.
Let’s say you are pricing out your menu items based on your most recent invoice prices but aren’t incorporating inventory counts. You can get a very simple calculation of food costs by looking at money spent vs money earned, but when restaurants operate on thin margins, every little chance to improve by a percent or two can really add up.
How do inventory counts make a difference to plate costs? Let’s dig into an example.
Last week you purchased 70lbs of beef short rib at $9.50/lb, and you use 1lb portions for your braised short rib entree, puting the cost per portion at $9.50. Your dinner entree is priced at $36, and is balanced with mashed potatoes ($0.50 per portion) and grilled broccoli ($0.80 per portion) as sides. You are aiming for 30% food costs for this menu item. ($9.50 + $0.50 + $0.80 = $10.80; $10.80 x 30% = $36)
In order for this food cost to be accurate, you would have to assume that the 1lb portion of short ribs was exactly 1/70th of your 70lbs order - meaning there was no waste, and you sold all of that 70lbs.
But what happens if you only sold 55 orders that week, and a plate was accidentally dropped on its way out to the dining room? You would have 14 portions of short rib left over that would be unaccounted for the next time you order - if you don’t take inventory first.
This means even if you looked at your POS data first to see how much you sold last week and adjusted your next order to 56lbs, you would still have net +14lbs on hand.
Thanks to those unused 14lbs, your short ribs now actually cost you $12.09 per portion, bringing your total plate food cost to $13.39 or 37% food costs for that week.
If you took inventory before ordering, you would be able to account for the 14lbs left over, and stock the new short ribs FIFO making sure they get used before expiring.
Improve your mental health
You might be saying to yourself, “What on earth does inventory have to do with my mental health?” Well, reader’s inner voice, we’re glad you asked!
Taking regular inventories gives you an excellent excuse for a little extra quiet time in the walk-in. Therapists be damned- nothing compares to the healing effects of a 5-minute power sob betwixt the spring mix and that bulk batch of coleslaw.
According to Harvard Health, “crying releases oxytocin and endogenous opioids, also known as endorphins. These feel-good chemicals help ease both physical and emotional pain.” So not only will the tears help you feel better emotionally, they can help with your back pain as you crouch down to count those 70lbs of raw short ribs.
Pro-tip: take inventory on a tablet or mobile phone so your tears won't smear your counts the way pen ink does on the old clipboard method.
Jokes and sass aside, taking regular inventories are an excellent way to gain better insight into food costs, prevent waste and keep your kitchen running smoothly.
If taking inventory by hand and manually transferring counts to an excel spreadsheet has you feeling like the juice ain’t worth the squeeze, we suggest looking into a restaurant management system with inventory management capabilities.
Not sure what to look for? This blog can help.
Tag(s): Inventories , Multi-unit , Franchises , Single-unit