The Proper Way to Take Inventory: Why You’ve Been Doing it Wrong

Counting Inventory Correctly

One of the toughest challenges to running a bar/restaurant has always been inventory. If you are not careful, your sales can fail to match your inventory purchases and you could fall in the negative.

What many business owners do not realize, is that they may have been failing to complete important steps during the inventory process, or have been making the wrong calculations. The following are a few ways in which people may be taking inventory wrong and the proper way to do things.

 

Measurements

When it comes to beverages, you should be paying attention to the smaller bottles that do not get stocked as often. This can include items like bitters, grenadine, or lime juice. Many bars tend to order these in bulk, but if you are not using them as much as you think, they’re simply going to go bad. Calculate the average amount you are selling for each item monthly (amount per drink per day x 30), and avoid buying in bulk for lower prices.

When it comes to food, sauces, herbs, and seeds are items with very low grammage. When ordering, you should calculate the amounts needed for 10 dishes rather than 1. The is the best way to control inventory with low grammage— which people tend to overstock.

 

Blind-Ordering

It is absolutely essential that you have a weekly order schedule and inventory process. In fact, some of the most efficient establishments in the country do it on a daily basis. Blind-ordering is what happens when there is no set schedule and you are trusting the bar manager and/or chef to simply tell you what they need. This can lead to excess inventory and waste. Your best bet is to have a separate staff member dedicated to inventory management on at least a weekly basis.

 

Vendor Suggested Ordering

When a vendor is making deliveries, they really shouldn’t be talking too much about inventory—unless they are introducing new items. Many bar/restaurant owners make the mistake of letting their vendor take over the ordering process. This will most assuredly result in higher costs, as the vendor’s agenda is to sell as much as possible—and you’re essentially giving them the reins.

Ordering online will eliminate vendor costs and can lead to lower markups on items. Try to keep from ordering on-site as much as possible—it will only lead to more costs. If you are concerned about the prices you are being offered are fair, you can request audit privileges within your vendor contract. This will allow you to review invoices from the producer to your vendor so you can understand the actual markups.

 

Setting Par Levels

The true key to effective liquor inventory is setting the correct par levels. These are basic measurements that are based on peak usage with an added safety margin ( usually based on brand). There are many ways to calculate the correct par levels for your establishment, but why not let technology take over?

 

Technology 

When you use technology to track inventory it always results in a better bottom line. The most effective inventory management is consistently augmented by technology. TapHunter is the type of software that will allow you to take inventory with ease, and even adjust your numbers on a daily (rather than weekly/monthly) basis. The technology uses par levels to project your next order and takes most of the guesswork out of the inventory process.

Much as our world revolves around technology, the most successful inventory methods always include integrated software platforms. Not only do they perform the complex calculations for you, but they use predictive analytics to create a more efficient and profitable inventory management system.

The proper way to take inventory is to have a set schedule, pay attention to your measurements, and never let your staff dictate the ordering based off of immediate need. Find a tech solution that works for you and begin integrating it into your process. With these few simple steps, you’ll never wonder if you’re doing it wrong again!


Bars and Restaurants – Want to save hours daily, drive thirsty patrons through your door and create an engaging experience for your customers? Learn more about how TapHunter can help your business today!

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