management | 5 mins read

Restaurant Inventory Management Tips to Increase Profits

restaurant inventory management tips to increase profits
Michelle Jaco

By Michelle Jaco


Inventory management is a process in which you monitor the supplies and ingredients you have at any given time.

If the management methods are effective, it will help you increase profits by making your restaurant productive, as you will not have to resort to Plan B because you ran out ingredients to prepare a popular dish.

It is also crucial for your long-term goals and daily operations, because maintaining proper stock levels has a direct impact on your profits.

You can minimize your food waste and save money by managing your food inventory successfully, which will prove to be more practical and rewarding.

Here are some of the ways to do that.

Use a POS System

This system provides several advantages, mainly integrated accounting, automatic inventory tracking by monitoring customers' orders, data forecasting, and generating useful reports.

There are some losses that cannot be accounted for due to unique circumstances, like spillage, food spoilage, incorrect food preparation process, customer complaints resulting in comp'd meals, and theft, both internally and externally.

However, a POS system does incorporate these scenarios if you input them manually into the system. This is typically a straightforward process and does not require too much time.

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Appoint Someone to Track Inventory

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You can designate your chef or managers to keep track of the inventory.

This method may be easier to detect inconsistencies, and with fewer hands in the pot, conflicting data is unlikely.

In addition to that, these employees will gain a better understanding of the patterns, trends, and nuances of your inventory with time because they are the only ones who will be taking and monitoring inventory.

It is pertinent that you appoint trained staff members to track inventory to ensure accuracy. If the designated employees are not trained, give them proper training. It is vital that everyone maintain consistency in his or her practices.

You can also cut your inventory losses by giving various incentives to your employees. For example, you can offer bonuses if your staff reaches a set inventory savings target. This will impact your bottom line positively.

Maintain a Consistent Schedule

Following a fixed schedule will help you understand how many supplies and ingredients are being utilized at a certain time. For instance, you can monitor your popular ingredients and perishables daily, while bulk items and non-perishables can be checked once to twice a week.

As time goes on, you'll be able to see the patterns and trends. When that happens, you'll be able to adjust your menu offerings and orders according to the demand and trends.

First In, First Out Method

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You can also improve your inventory management by following the First in First Out (FIFO) method.

With this method, you should utilize the items you receive by organizing the different areas of your kitchen like the freezer, dry storage, cooler, and shelves in order to minimize food waste and spoilage.

Another way to make sure that you don't waste food is to use dispensers and containers that are specially manufactured for this method so you can better organize and arrange the appropriate items in their respective homes.

Online employee scheduling software that makes shift planning effortless.
Try it free for 14 days.

Create a Food Waste Sheet

You can find the total quantities of food supplies and ingredients by taking and monitoring your inventory, but a food waste sheet will help you identify the places where you are losing your inventory.

This sheet accounts for things that are not accounted for on the inventory list. With the help of this list, you can figure out solutions for the ingredients from your inventory that you are losing money on.

For example, if the food waste sheet shows that a certain ingredient is going to spoil sooner than the other ingredients, you can buy less of that item or figure out ways to use the item as soon as possible.

Another common scenario is testing out new dishes. Some experiments will be an immediate hit, while others will be a flop. If you order ingredients for the dish that is less popular, you will know during the next round of orders not to order as much supplies for that less popular dish.

You may be able to input this information digitally into your POS system if your system includes a place for this data. Otherwise, you can make this sheet yourself by inputting the following information

  • Items wasted
  • Time Date
  • Weight or amount
  • Reason for wasting
  • Employee initials
Make sure that every one of your employees understands this sheet and make it an essential part of their job tasks to update it whenever any food item is wasted.

Utilize Excess Ingredients to Reduce Food Waste

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If you realize that some surplus ingredients will soon get spoiled or expired, incorporate them into your existing dishes and of course, be sure to let your customers know about the menu changes.

Another alternative is to offer meal specials to your customers using those extra ingredients. This is an effective way to reduce food waste, while also increasing sales and profits.

Use Inventory History to Make Future Purchases

By reviewing which ingredients in your inventory were under-utilized or over-utilized during a certain timeframe, you will be able to make better-informed decisions moving forward.

You can also forecast the trends and patterns by tracking your inventory list, waste food list, and POS systems data. When you have a proper understanding of these trends, you'll be able to make economical decisions that will help your bottom line.

To conclude, inventory management is extremely important for every restaurant. By handling your inventory well, reducing food wastage and spoilage, and using food waste sheets and inventory sheets, you can increase your profits and sales.

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