Inventory management is one of the touchstones of managing your restaurant, and represents a vital factor of your long-term success. Keeping track of the ingredients that enter and leave your restaurant helps you manage and optimize food costs. Simply put, you can’t run a successful restaurant without restaurant inventory management.
The tips and ideas below will show you the nuts and bolts of how to manage your restaurant’s inventory in a pain-free way.
The benefits of a restaurant inventory management system
- Cuts costs. Perhaps the most relevant benefit of inventory management for restaurants is its ability to lower food costs. Until you try a restaurant food inventory management system, you won’t know the amount of money you waste on lost inventory that’s caused by human errors. Automating inventory is the future of restaurant management.
- Reduces time waste. When you’re a restaurant owner/manager, the last thing you want is to waste time on keeping track of stock by hand. A restaurant inventory tool will throw this information at your fingertips, so all you need to do is check it.
- Provides real-time insight. No more running to the back to write down inventory that you’ve used after a customer ordered a meal. A restaurant inventory management system will do that for you, without you having to lift a finger. If you have multiple restaurant locations, it can also track this number across all sites.
- Keeps track of recipe costs. Keeping track of your recipes and restaurant menu items can help you calculate food costs and increase your profits. With an overview of all recipe ingredients, you can adjust your recipes and menu items to maximize efficiency, cut costs, eliminate items that don’t sell, and replace them with more profitable ones.
- Provides purchase orders. What happens when your stock is low on a specific ingredient? Repurchasing it manually is a waste of time. If you use an automated tool, the purchase orders will be generated automatically. Pending your approval, they can just be sent to vendors.
Restaurant inventory management: 5 tips & tricks
1. Train someone to do inventory. Managing restaurant inventory should be a one-person job. You want someone to be all ears on what’s happening with your inventory, so that they can catch mistakes before they happen and optimize inventory tracking based on reports and analytics.
Have a designated staff member for this task, and train them to understand how vital inventory tracking and savings are. By being focused on the task at hand and gaining experience with your particular inventory needs, they will develop creative solutions to complex problems.
Even with an inventory tool at your disposal, a team member should still keep a close eye on stock and reports.
2. Use the FIFO method. The first in, first out method is a popular way of keeping inventory while avoiding food spoilage. The principle is simple: the first ingredients to get in should be the first to get out.
Due to convenience and saving time, some employees might place newer ingredients at the front. Explain why that is counterproductive and train them to make room at the back for new stock. This will also help you keep track of inventory, as you will quickly notice ingredients that have expired and that you have to throw out.
3. Monitor and minimize food waste. Minimizing food waste isn’t just a matter of saving costs; it’s also a duty every restaurant owner has toward the environment. Become more environmentally friendly by creating a restaurant inventory list of ingredients and quantities, as well as a food waste list that accounts for ingredients you don’t use.
The difference will show you how to optimize your stock to avoid food waste. Another ingenious way of minimizing waste is coming up with new menu items that contain ingredients you have in excess. You can introduce them as limited-time items and brainstorm restaurant promotions for them, so that you boost your sales while not wasting any food.
4. Analyze reports and adjust your strategy. Restaurant inventory management is wasted if you don’t also keep detailed reports and analyze them to see what you’re doing right and what you can improve. The first thing you should track is your daily sales because they are strongly connected to your inventory.
Keeping a close eye on your sales every day will help you act faster when anything changes, which, in turn, will help you adjust your inventory strategy.
Another thing to monitor is ingredients that you underutilize or overutilize, so that you know what to order next. This insight can help you predict changes in your inventory long-term.
Don’t forget to also track your theoretical food cost vs. your actual food cost. If they differ widely, it’s clear that there’s an issue that you need to address.
5. Use a restaurant inventory management system. The easiest way to keep track of restaurant inventory categories, and manage your restaurant’s stock without spending much time on the task, is to use quality restaurant inventory management software.
For example, the QuickBooks® restaurant inventory management system is a tool that allows you to track your inventory in real-time, with quantities being updated automatically. The tool also alerts you when it’s time to reorder ingredients, so you don’t have to worry about that. You get insights into best-selling items, total sales, and taxes.
Among the highlights of this tool, you will find:
- Integrations with POS and accounting software
- Contractor management
- Income and expenses tracking
- Receipt organization
- Profitability tracking
- Purchase order generation
Taking your restaurant to the next level
Restaurant inventory management is not something you can choose to do as a restaurant owner, but something you have to do to succeed. Luckily, technology has made restaurants’ lives easier, especially in the context of the pandemic. Tools such as online ordering systems and restaurant inventory management systems are helping restaurants maximize profits more easily.
Without spending a fortune, you can use an inventory tool to take the weight off your shoulders and focus on more important things, such as making customers happy. Give restaurant inventory management a go by applying the tips and tricks above, and you’ll improve your restaurant operations in no time.