reporting | 9 mins read

Inventory Management Software & Why It's Essential for Your Business

inventory management software why its essential for your business
Michelle Jaco

By Michelle Jaco


Why are we missing a box of beef patties? How much ketchup are you actually using in your barbecue sauce recipe? You never know exactly what's going to come up missing when you're taking inventory, and much of that can be attributed to human error.

In fact, there are a number of many different elements that play into human error in the workplace.

Mistakes are inevitable, but unfortunately, when these missteps or oversights occur, frustration is bound to ensue, followed by tension between co-workers and management.

The one big takeaway that comes with running a restaurant or business for that matter is that stressed managers make stressed employees and stressed employees make mistakes.

So, if the mere thought of counting supplies in the backroom, stock in the freezers, condiments in the dining area, and groceries in the kitchen gives you a headache, here is a remedy to relieve the pain -- inventory management software.

Taking the human interaction aspect out of the equation will resolve any inventory conflicts you may have previously experienced or will experience, should you fail to nip it in the bud.

Your supply management needs are now made possible by using a top-of-the-line inventory tracking system, which features easy-to-use functionalities that can be completed over the computer and provides sure-accuracy.

There are many reasons why switching to inventory control software is essential for your business to thrive. Here are the top reasons why you should make the switch today.

Eliminates Employee Fatigue

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In most businesses - especially with restaurants and the foodservice industry - you're going to need the help of your team to conduct your weekly inventory counts. And, that's a problem for a few reasons.

But what I really want to focus on is just how much your employees already do. They are already tired from the other work they're already doing. And if you appreciate their hard work, the last thing you're going to want to do is to give them yet another task to complete.

You definitely don't want your employees coming in dreading to work, because they're going to be stuck with an unpleasant manager all day. You want to keep employee morale high because when their job is more enjoyable, and it makes them more productive.

This is why it's important that you don't pile up more work for your employees by making them count everything by hand. If you did, they'd hate you for it, and therefore, their job satisfaction is going to increase because their level of fatigue has increased.

On the other hand, if you were to use an automated system that barely required any input from those same employees, you'll have a much happier workforce.

Saves Time - A Lot of It

Imagine what you could do with all of the time that you free-up by using a more advanced, automated inventory control system.

No longer will you have to spend hours every week taking count of all of your supplies and then having to list everything out in a spreadsheet. Not to mention, you're probably doing all of this at an accelerated rate, trying to save as much time as possible. (And we all know that when someone is rushed they make more mistakes!)

Imagine how much better it would be to implement an automated inventory management system to do all of the counting for you. Imagine the number of hours logged and days spent tracking your inventory, all valuable time that could have been spent elsewhere performing other tasks that could potentially grow your business.

Inventory management software is a mega time saver. Instead of having to complete your orders by first counting everything in your store to see what you need, you can simply look at a screen and determine what you're running out of and how many you used the week before. There are no manual spreadsheets involved you don't have to count, nor do you have to perform any math on your own.

Cuts Down on Stress

There's nothing worse as a manager than to have an inexplicable shortage or overage when it comes to your inventory numbers.

When you use inventory management software, what you're doing is simplifying your ordering process by having all of the real-time data you need to determine what needs to be replenished based on your forecasted sales. It makes ordering easier, much less time-consuming, and less stress-inducing. Stress can give you headaches, insomnia, digestive issues, and more. So, as a manager who is essential to your business's day-to-day operations, you're going to want to do everything you can to reduce that stress.

Reduces Costs

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With some of the best inventory management software available now, you can actually reduce your food costs.

Some of the top software options can actually provide you with variance and COGS (cost of goods sold) reports. This puts those essential reports right at your fingertips when you go to order replenishments which helps you make more informed business decisions. With a variance report available to you, you can identify problem areas you have with portioning and food costs to better determine what actions you should take with your orders to reduce your costs. How do you know if you're ordering too much steak?

How do you figure out how much steak is enough to order for next week?

Inventory management software can help keep track of how many steaks you used last week, estimate how many steaks you should use next week based on sales forecasts, and how much steak would likely cause unnecessary food waste.

Pinpoints Menu Bloating

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One of the leading causes of high food waste is due to having too many items on your menu.

Think about it. If you've got too many options on your menu that not many customers are ordering at all, you're essentially ordering unnecessary ingredients that cause high levels of food waste.

If you've got the classic liver and onions on your menu, but you sell one or two plates of it per week, then it's likely not worth keeping it on your menu. Otherwise, you're going to end up with unused ingredients, and that leads to food waste.

How do you know if your menu is bloated?

You could manually cipher through the costs of creating all of the recipes for each menu item, manually compare it to how many you typically sell in a week, and then estimate how many you'll sell next week by calculating a sales forecast and applying it to your current week's sales information.

Or, you could go the much simpler route and use good inventory management software that can give you all of the sales figures and inventory information you need to know to make informed decisions.

What you're going to want to do is analyze your recipe data including your required ingredients and pricing of those ingredients for every item on your menu and compare it to your sales data for that item.

If the cost of you ordering all of your ingredients for liver and onions is $100 but you're only selling two plates (at, say, $13 each) per week, you're losing money by having that item on your menu.

Conversely, if your cost for the ingredients required to make your famous plate of spaghetti is $50 and you're selling 12 plates of it at $12 each, that's an item that should absolutely keep on your menu because you're making a significant profit from it.

Now, when looking into whether or not your menu has too many items on it to keep you profitable, you're going to come across some items that are profitable, but not at a high margin.

To determine whether or not you want to keep that option on your restaurant's menu, you're going to want to ask yourself, Is the juice worth the squeeze?

You're going to be able to quickly and easily determine your costs of goods and if you're selling enough per week to warrant keeping it on the menu if you use a simple inventory management system like software.

Is the small amount of fluctuating positive revenue (the juice) worth keeping it on your menu, ordering it, and the time it takes your chef to prepare it? If the answer is no, then you should probably take that item off of the menu.

Reduces Paper Waste (and Costs)

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Stop printing count sheets that you'll use for the day or, at least in my experience, lose later on. It's wasteful, and you don't want to contribute more to the deterioration of our environment. You don't have to print out paper sheets, bring them to your backroom and tally and mark everything you count.

With strong inventory management software, you can utilize an app on your mobile phone to enter counts which are then automatically synced to the cloud and pulled into a robust software suite.

This makes it super easy to keep track of everything in the building right in one place. No more printing and tossing sheets of paper (which, as a side note, have you seen how expensive ink is lately...yikes!).

Not only are you reducing your waste when you take everything to a screen, but you're also reducing your costs in a number of ways; you're using less ink, less paper, less garbage bags, and less trash pickup services.

The Wrap Up

As you can see, there is no shortage of reasons regarding why using inventory management software is essential for your business.

Doing so will eliminate employee fatigue, as you won't have to use them to help you manually control your inventory. It'll also save you valuable time, freeing yourself up from being tethered to a tedious inventory process.

You'll save you money in quite a few different ways, too, like reducing your food costs and reducing paper waste. And, most importantly, using an automated inventory management system will greatly reduce your stress level as a manager.

If you're looking to get a better grasp of this whole inventory management thing, it's imperative that you take a look into picking up some of the best inventory management software options like Zip Inventory.