Food Inventory: The Restaurant Inventory Management Checklist

Inventory control is a key component of restaurant management. A proper food inventory management is essential to ensure that service runs smoothly. However, if it’s not done correctly, financial results can be adversely affected. Even a small oversight in your stock management system can cause food shortages and food waste, as well as inaccurate forecasting. These factors can have a negative impact on your food business’s ability to manage food costs and beverages. FoodPrintAccording to reports, up to 10% of food stock that a restaurant buys is wasted. That means 10 percent of their food costs will not be able generate income. 

All the food that comes from your kitchen is expensive. But, do you know where you’re losing money? Detailed Usage, Loss, and Sales Performance reports tell you what’s sitting on the shelves and where you’re losing money. 

The biggest risk for the food & beverage industry is rising wages and Costs of food. If you’re not constantly working to improve profitability and grow your revenue, the costs will take over. It’s imperative that you’re consistently and actively reducing costs to maintain your current level of success. This is how you can do it. How to improve efficiency

In this article, you’ll learn the basics of restaurant food inventory management: what it is, what terms you’re likely to encounter, tips for keeping track of inventory and the tools you can use to do it. 

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How does food inventory management work?

The purpose of food inventory management is to keep track of how many inventory items your restaurant has. With this data, restaurants are able to make better inventory purchases (i.e.This information will allow restaurants to make better inventory purchases (e.g. not purchasing too much, too little, or both), and minimize losses caused by theft, waste or spoilage. 

These are the things that restaurateurs who have mastered inventory management can do: 

  • What inventory you’ve purchased and what amount
  • Daily inventory usage
  • How much inventory is left over at the end each day

Benefits of inventory management

Stock control systems can be used to improve the business operations of catering businesses, quick-service restaurants and other food and beverage companies. An inventory management system can help food and beverage companies reduce waste and increase their productivity while also controlling cash flow.

It’s common practice in many industries to keep a close eye on manufacturing costs as well as the overall market value of products. Yet some food and beverage businesses don’t subject their menu to the same level of scrutiny. A well-organized stock control system will help offset overheads, set menu prices and plan portion control.

When your business implements a proper control system, you’ll find that you’re in a better position to make business decisions. You might find that some menu items are less profitable than you expected. You lose even more cash if items are not sold, which can negatively affect your cash flow. This information will help you make improvements to recover your profits and prevent similar mistakes in the future.

Storing food for prevention 

Restaurants must keep track of their usage and dollar values to be able to determine where money is going. Restaurants can use this information to make informed decisions about their food inventory. Improve their Selling PriceMaximize profits with each sale by using CoGS 

Not only that, but understanding how the inventory you buy relates to sales helps pinpoint inventory that’s lost for any of the following reasons: 

  • Spills
  • Employee mistakes
  • Meals for staff
  • Theft
  • Comping disgruntled customers 

Food waste prevention

A food inventory management system is a great way to save money. Keep your profit margins intact. Your business’s biggest expense is not only labor but also replenishing its inventory. You can cut down on the amount of food that your company wastes by setting up a stock control program. There is an estimated 80% of food wasted in the United States. 30%-40% of all the supplies end up in the garbage. Businesses of all sizes can reduce their waste contribution with the help of technology.

The ideal first step is to work out how much food you’re wasting unnecessarily. There are situations where food waste is unavoidable, for example, if the customer doesn’t like the dish and sends it back to the kitchen. But mistakes in cooking, wasteful preparations, and spillages can be avoided. The right equipment and training can help staff be more attentive. Food wasteHow to reduce it.

If you’re concerned about how much food is going to waste, Conduct an audit of the waste to find out where it is coming from. This will give you the most accurate results. While you want the audit to produce effective results, you don’t want to degrade the quality of your service by causing unnecessary delays.

Below are five common causes of food waste, and some practical ways to reduce it at your restaurant.


There are many reasons why you might order more than one product. The main reason is usually: A poorly or inefficiently maintained inventory system can cause chefs to order more products than they need. Performing and tracking inventory regularly will keep food waste down and save you money on ordering food that you just don’t actually need.


Even if you aren’t over-ordering product, you run the risk of spoilage. If you don’t carefully inspect the food coming in, you might accept product that is already turning bad. Label all food coming in with the best-by date. You can use the first-in-first-out (FIFO), storage method to minimize the number of food spoilage.

There is too much

Overestimating the sales of a dish is another common cause for food waste. Chefs often will prep and cook too much food to avoid 86’s. This can lead to increased food waste. Tracking sales gives you a chance to periodically review your menu, create more efficient batching levels, and even eliminate dishes that aren’t moving fast enough. You can save money by planning meals for your staff around extra ingredients.

Diverse misfires

An error by a server results in omission of the allergy notice for dishes containing nuts. The wrong recipe was prepared by the line cook because he or she misread the ticket. Your bottom line can be ruined by mishaps. These types of mistakes can be prevented by proper training and active management.

Inadequate portion control

Are you throwing away old food? You could have a problem with your portion control. You can reduce your food costs without having to compromise on quality by using portion control. Standardizing your measurements for each dish can prevent too much food reaching the trash when a guest doesn’t feel like packing leftovers.

It’s impossible to control food waste completely. That doesn’t mean you can’t drastically reduce the amount of waste you produce by taking a few simple precautions. You can save money, keep food from the garbage, and make your kitchen more efficient.


Important terminology for restaurant inventory

Anyone who wants to master the restaurant’s food inventory must be aware of these terms:

  • Sitting inventory
  • The Depletion
  • Utilisation
  • Variance

Sitting inventory

Sitting inventory is the inventory or dollar value that a restaurant has in its inventory. Tracking sitting inventory requires that you choose one measure unit, either a dollar value or a physical amount. 


The amount of inventory that has been used in a given time period is called depletion. It can be expressed either as a dollar amount or purely in physical amounts. You can calculate depletion using your POS system’s sales reporting dataYou can choose to do this on either a weekly, daily or monthly basis. 


The amount of inventory that is still in use (expressed as a dollar value), divided by the average time between depletion. 

You have seven days to consume 70 pounds of ground meat if you intend on eating 10 pounds each day. 


Variance is the difference between your product’s cost and the usage amount’s cost. 

Let’s say you used $500 worth of beer over the course of a week, but your POS system is reporting that you only sold for $450 worth. This would mean that your variance would be $50. 


Here are some tips for keeping track of restaurant food inventories

Now that you’re familiar with some fundamental restaurant inventory management concepts and terms, let’s move onto tips for taking accurately and consistently taking restaurant food inventory. 

How do you determine when to count your stock products?

Consistency is the most important aspect to managing stock items within a food or beverage company. Food and beverages businesses often have to deal with perishable items. Because of this, you’ll want to take stock daily to ensure that you’re minimizing food waste and aren’t selling expired items.

One Important stocktaking ruleIt’s important that you complete it every day. It’s best practice to take inventory after your doors close or before you open. Whatever you decide, make sure you’re consistent to avoid fluctuations in reporting. This isn’t always feasible, but it can ensure that you have accurate stock numbers.

Avoid taking inventory during deliveries as this could lead to double counting. It is best to ensure consistency among the people you give stock control. It will speed up the process and make it easier for you to identify anomalies or reduce mistakes.

Food storage organized

How to increase inventory count speed? It’s pretty simple: keep your product storage areas organized. However, it can be hard to organize large quantities of food or beverage products.

Stock taking can be difficult if your stockroom doesn’t work well. Double miscounting or over-Ordering is more likely than if your stockroom was organized. 

Below are some suggestions to help you keep your pantry, walk-in and stockroom organized all year. 

  • Grupp items by food group
  • You can label your shelves

A stock-taking team should be assigned

Consistency is the key to inventory counting. You should choose a few members of your team who will be responsible for stock-taking. The same team members should be responsible to receive orders and update inventory records. 

Once you’ve established a team, you should also create an inventory counting schedule. Ensure that everyone counts inventory on the same day and at the same times. It is best to count inventory at both the beginning and ending of every day.

Incorporate an inventory consumption spreadsheet

The concept behind an inventory consumption spreadsheet is to track how much of an item you use per day, how much you’re wasting and how much you’re spending on inventory. 

You can track inventory consumption daily to better understand the flow of inventory into and out of your restaurant. This will allow you to reorder inventory more precisely. 

While each restaurant’s inventory consumption sheet will vary depending on what it sells, these are a few things to consider including: 

  • Ingredient name
  • One unit of measurement
  • Amount used
  • Cost per ingredient unit
  • Total cost
  • Beginning inventory
  • Ending inventory
  • Consumption rate per day 
  • Waste quantity
  • Waste cost

Your staff should be able to manage inventory.

This is especially true for restaurants with multiple locations, but inventory management can’t be just one person’s responsibility. Stock must be counted by all staff members, managers and shift leaders, so even if one person cannot count it, the stock will still be counted. 

Both front of house and back office staff can contribute to inventory management. For instance, if something is spilled or is spoiled, they should notify someone immediately so that it’s accounted for in the inventory consumption sheet. 

Keep track of your daily sales

Restaurants are better able to react to any changes by constantly monitoring inventory and sales. If you sell more than you expected, or run low on ingredients in a particular menu item, you can order the items to meet demand. 

Keep extra supplies 

For ingredients that your restaurant uses fast, it may be a good idea to always keep some “just in case” inventory. 

For instance, if you’re a local burger shop, it may be wise to keep extra inventory of fries to fulfill an unexpected influx of customers. Just make sure that you’re keeping track of your extra inventory’s freshness and swapping it out as necessary. You can save money by using surplus inventory to cook meals for your staff. 

Make sure you use the correct restaurant tech

It is obvious that tracking sales and inventory can take a lot of time without the proper tools. Small BizSense allows restaurateurs to easily access weekly, monthly, and annual sales reports, and can manage their inventory. To get more detailed inventory management tools, install the following integrations: 

Although forecasting can seem like magic, getting it right will help reduce food waste and cash loss. That’s why using technology to get it right is a must.

There are many benefits to all of these platforms, so we recommend that you do your research to find the right fit. Tenzo makes use AI and sales history to predict your sales. This allows restaurateurs to predict how much inventory is needed and helps them avoid overstocking. You can also use dynamic levels to order stock. It will help you keep track of inventory costs and ensure that you are not overstocking.


Take initiative with your restaurant’s inventory management 

Inventory management is probably one of the least exciting parts of managing a restaurant, yet it’s likely one of the most important if you want your business to be financially healthy. 

It’s time to get serious about your inventory management. You can track it and ensure that sales are attributed to every dollar you spend. Ask one of our experts about Small Biz Sense and how it can benefit you!


Cyndy Lane

Cyndy is business journalist with a focus on entrepreneurship and small business. With over a decade of experience covering the startup and small business landscape, Cyndy has a reputation for being a knowledgeable, insightful and approachable journalist. She has a keen understanding of the challenges and opportunities facing small business owners and is able to explain them in a way that is relatable and actionable for her readers.