As one of the premier wholesale distributors in Portland we have worked closely with many successful restaurants. Portland, after all, is known for being a city of foodies, and we see that enthusiasm as a restaurant supply company with the volume of demand. Despite Portland’s love affair with food, the restaurant business can be fickle and risky at times.
One of the best practices of the most successful restaurants that we’ve worked with over the years is to take consistent, accurate, routine inventory. Combined with practices of cost analysis, taking inventory can help to regularly determine the overall value of your restaurant and better anticipate gains and losses. Taking accurate inventory can reduce food waste, mitigate theft, and improve profitability. The key to efficient, accurate and cost-reducing inventory is consistency.
With that in mind, we’ve compiled some inventory management best practices that apply to restaurants of all sizes to help you get started.
How Often Should You Take Inventory?
Remember that when it comes to inventory the mantra is ‘consistency’. Decide how often your restaurant should take inventory—quarterly, monthly, weekly, or even daily with some items—based on the volume of goods you sell, number of staff, and any other cost analysis practices you have performed. Choose a time to take inventory, either before opening or after closing, and stick with that time to maintain consistent bookkeeping. Monthly inventory is most common among restaurants, but twice a month or weekly inventory will yield more accurate metrics over time and can give you better information for cost-profit analysis.
The ingredients of your most popular dishes and food items that have a high turnover will have to be inventoried more often. Consider having two inventory sessions, for example, one every two weeks for everything, and one daily for goods with a high turnover. Whatever schedule you set, the most important part is sticking with it.
Never attempt to take inventory while food items are in the process of being prepared or sold, so as not to skew your data. When a new shipment of goods arrives, note down the new supplies as you add them to your stock. Documenting what goods arrived in what shipment will help in the event that defective goods need to be returned to the distributor. Only add items to the inventory that have already arrived and are physically in the restaurant to avoid double-counting items.
Do You Have the Right Tools and Technology?
There are a huge variety of inventory programs, from expensive and complex cost analysis programs, to simple inventory count algorithms in an Excel spreadsheet. McDonald Wholesale offers a free inventory management program to any customer that uses us as their primary supplier. Our sales representative will work with you to input a complete list of your inventory items (even ones you purchase through other vendors) into the program, enabling you to get a quick look at your inventory levels daily, weekly or monthly. You can even use the program to build out your menu recipes with ingredient measurements so that each week you can quickly download your inventory needs and get up to date pricing. The program is easy to use and extremely flexible. It can even let you see costs by serving when you swap out ingredients in a given recipe.
An inventory management program is a must in a busy restaurant but it’s no replacement for a full manual inventory check at least once each month.
Standardizing unit costs by type of item in your inventory will help keep track of portion costs as prices fluctuate. Use the latest price paid as the standard price for items that shift in cost from week to week, like ground beef. If you use scales to weigh loose bulk goods like flour or rice, be sure to calibrate them regularly.
Take the time to review inventory metrics that you have accrued over time and perform wide-view cost analysis with that data. The overall goal is to determine your bottom line, reduce costs, and increase profits over time.
Are You and Your Staff Ready to Start The Process?
It’s a good idea to have two people take inventory, each count every item independently, and then compare results. With this double-check built into the inventory process, the restaurant can avoid anomalies in the bookkeeping due to human error or theft. Plan on having the same employees take inventory at the interval you’ve set. They will become familiar with the process, the tools, and be more aware of any inconsistencies.
Be sure to clean and tidy up before taking inventory, and treat inventory as part of a larger cleaning process. A clean and organized area will make counting goods easier and help to mitigate losing, misplacing, or miscategorizeing items.
While stocking shelves, fridges, and cabinets, ensure that items are stacked in First In, First Out (FIFO) order to reduce food waste. It may be tempting to buy large quantities of every item you use to get better pricing but overstocking is likely to result in spoilage and greater costs in the long run.
With the right tools, a clear and consistent inventory practice, and regularly scheduled times to measure inventory turnover, you can reduce food waste and keep your restaurant profitable. To learn more about inventory management and how McDonald Wholesale can help, call us at (877) 722-5503.