No matter what industry you’re in, there are very few tasks more undesirable than inventory. It’s a dull, tiresome process that takes up your valuable time. The good news is, it can be made easier. By taking inventory, you are enforcing a strong backbone for your restaurant or bar’s financial health. While reading the tips below, it is important to note that no inventory process is permanent. The market evolves and changes, and your inventory process should too. Find the system that works best for your company and continue to modify as needed.
Of course, inventory is important for keeping liquor in stock, but it also determines:
- Expected beverage use
- How to decrease waste
- What your pour cost should be
- Which products sell well and which don’t
- How your bar is performing financially
Ultimately, the goal is to calculate your inventory usage for a certain period of time. We’ve compiled a list of tips and tricks to help your business’s inventory thrive.
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Too much inventory can hurt your business. Fearful of running short, it’s easy to overspend on inventory. Storage isn’t free, and inventory that just sits on a shelf is subject to depreciation and damage. One of the benefits of tracking your inventory is that you can anticipate increases in sales velocity. In that case, it can be beneficial to stock up. This will not change gross profits at first but should result in higher gross profits later on when the inventories move at a quicker pace. How to manage this? As accurately as you can, make projections of how much inventory you’ll need and when you’ll need it.
Take inventory before the restaurant has opened or after it has closed, because it can be difficult to take accurate inventory while products are being sold. Apps such as Bev Spot have an online too that helps bar managers keep track of their inventory and spending.
Be wary of inaccurate inventory tracking. There are opportunities for miscalculations everywhere: receiving the order, during order fulfillment, and unfortunately, theft that occurs all too often. With regular inventory tracking, you’ll be able to identify significant fluctuations in product usage. Additionally, you’ll be able to increase orders to avoid shortages (or decrease orders to avoid a surplus).
Whether you count your inventory daily, weekly, or monthly, make sure you do it at the same time on the same day of the week/month. With your regular inventory tracking, you’ll be able to do all of this because your loyal bar patron complains that she can’t drink her favorite cosmopolitan.
Use spreadsheets. Make sure you’re using one that will be most beneficial to your company. With spreadsheets like Microsoft Excel, it’s easy for things to accidentally get deleted and changes to be lost. What’s the solution? Use software such as QuickBooks. This is typically known as an accounting package, but includes inventory features that can provide you with a central database and make it easy to get a dollar value for your inventory.
Label everything. This may seem obvious, but putting labels on any products without one will make it much easier to choose the right inventory on the first try. It’s up to you whether you want to purchase materials and come up with your own labeling system or use a labeling software. Softwares like SkuVault allow you to print out your own product and location labels and determine exactly what goes on them.
Spreadsheets aren’t your thing? Use an inventory management system like Live Inventory to create Inventory Count Sheets. This will allow you to track fluctuations over time.
Make sure you have enough resources to manage your inventory. Backorders are a turnoff to customers. Buyers may forgive you once or twice, but any more orders with out-of-stock items will send them running to your competition.
The most critical part of successfully managing your inventory is consistency. Counting the same products, using the same personnel, and taking inventory at the same time are some of the easiest ways to improve your accuracy. Whether you’re revamping an old system that has become outdated or starting a new system from scratch, these steps will lead you in the direction of financial success. For more information, check out our other inventory blogs. Happy counting!