Inventory and waste

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Restaurant inventory and waste: a count schedule that works

Money in a restaurant leaks away a few grams at a time. The gap between what the recipe cards say you used and what you actually used is called variance. Here is how to keep it under control.

How to keep stock under control (short answer)

  1. Record every goods receipt with quantity, price and batch, on the day it arrives.
  2. Keep a recipe card with weights for every dish, so you know what each sale uses.
  3. Log waste separately: write-offs, breakage, expiry, cancelled orders and staff meals.
  4. Count by area at different frequencies: bar weekly, perishables twice a week, dry store monthly.
  5. Compare actual and theoretical use monthly, and investigate any variance above your threshold.

Theoretical use versus actual use

The formula for actual use is simple: opening stock + purchases − closing stock = actual use.

Theoretical use is every item sold multiplied by its recipe weight. The gap is the variance: the loss nobody sees.

Worked example at the bar: you start the month with 12 bottles of whisky at 750 mL (9.00 L), receive 6 more (4.50 L) and end with 5 full bottles plus 0.30 L open (4.05 L). Actual use is 9.00 + 4.50 − 4.05 = 9.45 L.

181 servings of 50 mL is 9.05 L of theoretical use, so the 0.40 L difference is 8 servings lost. At an illustrative $16.00 a serving, that is $128.00 on one product alone.

Table: types of waste and where to record them

Restaurant losses, with an example and where each is recorded

Type of lossConcrete exampleWhere it is recorded
Technical lossCleaning vegetables, trimming meatOn the recipe card, as a yield measured in your kitchen
ExpiryDairy unused past its use-by dateA write-off note, with batch and quantity
Breakage and damageA bottle dropped at the barA write-off note, at purchase value
Cancelled or returned orderA dish sent back to the kitchenThe reason for cancelling, noted in your records

Table: how often to count inventory

Inventory frequency by area, in a restaurant with a kitchen and a bar

AreaFrequencyWhy
Bar (spirits, drinks)WeeklyHigh value per unit and high variance
Perishables (meat, fish, dairy)Twice a weekRisk of expiry and of mis-ordering
Dry store (flour, pasta, cans)MonthlySlow rotation, rare losses
Full inventory, valuedMonthly, plus a year-end countThe basis for the month's result

What the rules say

  • Holding inventory means a year-end count for your accountant.
  • Keep supplier and batch records so you can trace each product back to its source.
  • Your health authority expects temperature and use-by date records. Ask what it wants kept.
  • FEFO (first to expire, first out) keeps you within use-by dates.
  • Keep inventory and sales records for at least six years, as the CRA requires.

Common mistakes

  • Counting the bar once a month. By the time you spot a variance, you have lost 30 days of evidence.
  • Not logging staff meals, so they show up as unexplained loss in the report.
  • Counting open bottles as either full or empty, instead of estimating what is left.
  • Receiving goods without weighing them, then finding a shortfall at count that you cannot explain.
  • Comparing only the total stock value instead of use per product. An 8% variance on one item disappears in the average.

How 4restaurants.net helps

  • Ingredient stock levels sit in the same application as the recipe cards and orders.
  • Every dish has its own recipe card, and the reports by dish show what sold.
  • Reports by day, by dish and by waiter show sales, so you can compare them with what left the stock.
  • Batch and use-by details are kept with your goods-receipt documents. The application does not replace those records.

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