Restaurants allocate much of their operating budgets to buying food items, tools, utensils, and other supplies that help run the business. This is why proper management and control of the inventory can cover a major portion of the budget.
A restaurateur's attitude towards the process of inventory management can make or break their small business. It is essential to take a thorough step-by-step approach to the process instead of guesstimating' the stock levels.
Effective inventory management is essential to everyday processes as well as the long-term goals of an establishment.
Here we offer a fundamental guide to managing your restaurant inventory as well as choosing the right inventory app that can make a significant difference to your bottom line.
One of the most significant investments in the food and beverage business is that of stock and inventory. A restaurant inventory consists of all the raw materials and equipment needed to prepare dishes and keep the restaurant running properly.
Effectively managing it means keeping track of each item to ensure that the right quantity goes into the dishes and that your establishment never runs out of stock. This saves money, time, and energy costs, and helps keep the quality of food consistent at all times.
Well, stats show that on average 15% of your food ends up in the trash. This can account for a large majority of your revenue. The numbers alone are a pretty convincing reason to track inventory and to do it right.
While running a restaurant costs more now than ever before, the good news is that you also have more control over your spending than restaurant owners of yesteryears. It can be challenging to stay on top of stock-related issues while also strategizing the long-term success of your restaurant; however, an inventory app can help you do it efficiently, while also closing the gap between actual and estimated food cost margins.
According to industry averages, you will invest more than a quarter of your total sales back into the businesses, for purchases and various other payments, etc. That's a big chunk of your profits, and you'd be risking it by not protecting your inventory against spoilage, waste, and theft.
Regularly taking and reviewing inventory may seem like a tedious task, but it is one of the essential processes that can ensure the success of your restaurant. It can help keep your business's financial health in check, prevent over and under ordering, decrease food wastage, track expected usage of food, and keep the staff from stealing from the stock.
In the food and beverage (F&B) industry, taking stock doesn't mean only scanning the barcodes. Sometimes, you also have to manually count all the items on the kitchen shelves, go back into the storage room and count everything that is scattered around.
Once you have all the information on what's in stock, and what you may be running low on, it may be a good idea to let an inventory app take over the remaining workload. In this day and age, no one has the time to maintain paper-tracking sheets and spreadsheets, especially when you can find an easy-to-use and affordable restaurant inventory app to do it all for you.
Once you have put the right technology to work, make sure your business is also following these best practices for restaurant inventory management .
Automate with Point-Of-Sale Software
An active POS system will do wonders for your costs. It will integrate with your inventory app to help reduce the costs incurred on hiring staff for inventory taking. This system will help you count opening and closing stock every time there's a shift change; it will also track stock usage and update the current at-hand inventory numbers in real-time. So, overall, it's a good investment, especially if you want digital help with daily restaurant operations.
Train Your Staff
Don't just push the clipboard or inventory software on an employee and send them to the stock room; that's bound to result in a disaster.
Instead, build a team of inventory managers by picking the most detail-oriented staff members and then train them on accurate inventory management. Whether the team is tech-savvy or not, it is vital to help them realize the potential of using digital automation technologies like inventory apps.
Once your staff has an in-depth understanding of how to count the stock, you can further divide the teams, making them responsible for a variety of tasks. These include organizing the stock room, receiving orders, counting the inventory, looking up prices, and keeping up-to-date financial reports, etc.
Hold them accountable for all stock and inventory before you sign for it. Make sure that they remember to inspect all aspects of food orders that are important to your business. When they get in the habit of checking inventory as soon as it arrives, it will minimize their downtime later on.
Restrict Access to Your Data
It isn't just about counting the goods in the stock room. Keeping up with inventory management can give you some critical data that can help your restaurant business succeed. You can learn more about price trends, food costs, costs of goods sold, and usage by day, etc. and then factor in all this information to make better decisions.
However, this information shouldn't be seen by everyone. Limit employee access to any data that doesn't have any impact on their role in the workplace. This way you can keep a vigil on the stock, while also eliminating theft and wastage of goods.
Use the FIFO Method for Inventory Usage
In the restaurant business, old products aren't just old, they are also useless and a major burden on your expenses. That's why it's a good idea to ask your staff to arrange the inventory in a way that items with the latest expiry dates are used up first. This is the First In, First Out' (FIFO) rule that mandates pulling old product up and putting the new products behind them, so the older goods are dispensed first from the inventory.
Try to Maintain a Low Stock
With a bit of planning and proper foresight, your restaurant can keep a minimum stock of what is needed until the next shipment arrives.
This is key to effective inventory management for restaurants because ensuring low inventory levels reduces costs and also minimizes the losses resulting from old and deteriorating items.
This way, you will also free up space taken up by storage and prevent spoilage; not to mention, stock-taking will become much faster as well.
Regularly Perform Spot Checks
Now, it's not possible to count all the items every night and day, because it will be time-consuming, troublesome and make inventory management susceptible to errors.
However, carrying out a spot check every day shouldn't be that big of a deal.
Pick up a few categories, especially the pricey ones, and do a quick walkthrough of what's left in the reserve. This information will give you insights into your restaurant's inventory consumption as well as a quick understanding of which products go missing mysteriously, so you can ensure better security for these.
Track All Inventory Requests
Eateries usually reorder the same things consistently, but sometimes there are unfamiliar entries on the inventory report that show faster-than-usual stock consumption or other uncommon orders.
Set up a process that brings all the inventory requests to you for approval, before anyone can take anything out of the stock room. So, for example, if your chef is requesting a list of items, you will approve or disapprove the list via email before an order is placed.
Develop a system to track details for repeat orders as well, so you know very well what is being requested of the suppliers and why.
An automated system like an inventory app can make it easier for you to keep track of all inventory requests, set automatic re-orders, and track usage levels of various items.
Add the Overheads to Inventory Rates
In addition to buying stock, restaurants have several other expenses related to inventory management such as holding costs, shortage costs, and ordering costs.
Managing these is a substantial part of doing business successfully, and can take up to 40% of the value of inventory. Usually, restaurants pass these expenses off to the final consumers.
Now, since your purchase amounts fluctuate from time to time, you must update the menu rates at your restaurant accordingly. Make sure that all your overheads are covered in your final products and can be recovered with regular sales.
This is the only way to ensure the long-term profitability of your business and make inventory management a regular part of your business functions.
Follow Your Menu When Stocking Stock Up Inventory
Eateries often have seasonal menus that require some items that are only available at a particular time of the year, while many other menu items can be served year-round.
That's why it is critical to keep a close eye on changing menus and be responsive enough to stock up for your restaurant accordingly.
Make sure your store manager also adjusts the store temperature as per the requisites for food items such as vegetables, fruit, meat, ingredients, and spices. This is how you eliminate wastage while also controlling air conditioning costs in the stock room.
More than 80% of restaurants have turned to technology like reservation and inventory apps, and online ordering services to help run the business efficiently. This is the most effective way for restaurant managers to analyze the supply, economize on what they already have, and use the resulting data to make better-informed purchases.
If you are a restaurateur looking for ways to reduce recurring costs, switch to an inventory app that beats manual management and also makes the task quick and efficient for you and your team.
The right inventory management software will help you restock before you run out, track most-used items, scan barcodes, categorize products, ensure you don't oversell, sync with the cloud to help you tally stock across sales channels, and deliver robust analytics and reporting capabilities that make a difference to your bottom line.
If you still can't decide if inventory management apps are right for you, ask yourself
Can I Afford It?
Look at the food you are wasting and what the staff turnover is costing you. Using a reliable inventory management app can cut these figures in half.
Can you afford to buy a new app for your business, to help automate stock-taking and stop the unnecessary expenses?
The answer is yes!
What Do I Need?
Who doesn't like bells and whistles offered by personalized apps?
But you don't need the fancy, frivolous stuff.
Try to find the right fit for your business; it'll pay off in the future. Your inventory app should be scalable, so it grows with your business needs, and it should offer you end-to-end solutions that simplify the process of inventory management.
Ask other restaurant owners about their needs, so you better understand your requirements, and then find an app that helps ease the stress of managing the stockpile for a busy restaurant.
Is It The Right Fit?
Consider the size of your business, the number of staff, daily sales, and any existing technology that you may want to be integrated with your inventory systems.
Also, make sure your chosen system comes with reliable customer support.
Inventory management apps aren't one-size-fits-all, but you can still find the right fit if you think about the options that are most useful to your restaurant.
The best practices listed above can help you better manage the stock at-hand while ensuring that any incoming stock is accounted for as well.
Digital inventory management is becoming a key trend for restaurants that value each dollar being spent. A comprehensive digital stock-taking tool can simplify restaurant management and give you access to various timely, relevant, and data-driven reports that can have a massive impact on your profitability.
Finding the perfect software leads to a better managed and more efficient business. That's why we suggest you try out Zip Inventory.
No spreadsheets, no manual data entries, no archaic technologies just a simple, useful, and accurate inventory app that performs due diligence for you. Start your FREE trial to learn more about it, and then you can take control of your stock for good with its help.
Getting started should take less than an hour, and we'll be here to walk you through each step, so adapting to Zip Inventory should be quick and easy. Visit our website now to learn more about the Zip inventory app and order it for your business!