Restaurant Inventory Management Best Practices to Follow

The restaurant industry is a great business venture for foodies to get started on. However, while it is a great way to pursue one’s passion and creativity, and enter the business world, it is not all fun and games. One may say that out of the many business models geared towards selling products and companies, food companies may be one of the more difficult ones to manage, especially in terms of inventory management.


Food businesses are unique in terms of bookkeeping and accounting practices because restaurants largely keep an inventory of food items, most of which contain perishable goods with set expiration dates. This requires particular attention to detail and practices to avoid food spoilage and wastage. With the right practices, food business owners can also maximize available resources


Inventory Management is essentially the listing, tabulation, recording, price recording, and cost determining practice that allows businesses to keep track of stocks. Following protocols allows them to make informed decisions on when or when not to order more supplies. In the food and beverage industry, inventory management comprises an inventory of all physical items needed to cater to companies, including food, dry goods, spices, beverages and liquor, linens, cutlery and dinnerware, pots and pans, and worker uniforms. 


That said, if you are looking to start a food business, or have already tried your hand at one, there is no need to be discouraged. Though inventory management of food items may be tricky, there is a way around it, and here are some of the best bookkeeping and accounting practices to follow. Note that experts recommend these be categorized into food inventory, beverage and liquor inventory, and non-food inventory. 

1. Label and Organize

The first step to managing something is knowing what it is and organizing where it belongs. This provides you with easy access to key information, like expiration dates and item names when needed for inventory. Keep shelved items in labeled containers, or label your shelves. This will make it so your staff has an easy time finding items. Additionally, keep all frequently used items in the same area, preferably one with easy access. 

2. Keep Stock Levels of Goods Low

As much as possible, it is important to keep stock levels below that of surplus. You must keep enough stock levels to satisfy your customer demand, but not too much that you are left with food spoilage. Only take up storage space for items that are needed. Food spoils, so resist the urge to hoard.

3. Monitor Sell-Through Rate

A sell-through rate demonstrates how much of an item is sold in any given period. For example, if you stock up on 100 loaves of bread in a week and only consume 50 loaves, you will have a sell-through rate of 50%. Note, however, that this often works best for countable food items, like bread, eggs, meat, and bottled beverages. But it may be harder to do for mass products like flour or grains of rice. Knowing the sell-through rate gives you better financial control.

4. Apply the First in First Out method

Complementary to monitoring your sell-through rate is also following a first in, first out system. This means what gets put in first is also consumed first. This will allow you to effectively use up old stocks before expiry.

5. Utilize Food Waste Sheets

Food waste sheets allow you to keep a record of what you throw out, how much, and how often. Tracking spoilage, spillage, and other wastage lets you know what is going out the door and where cash is slipping through the cracks. Additionally, it can show areas of improvement needed in your inventory management. For example, if you notice through the food waste sheets that bell peppers are being thrown out often throughout each week, this may be a sign to lessen your order and supply of the peppers. 

6. Use Inventory to Guide Future Purchasing Decisions

Inventory guides help decisions, especially future projections. They let you know what to buy and when. They can also help spot areas where you are leaking cash, such as any food surpluses or wastage. These may help you make better operational business decisions.

7. Seek Help from the Same Staff for Inventory

Using the same staff for inventory means there is a lesser likelihood of things getting misplaced or miscalculated. Seeking help from the same staff assures you can trust that they know their way around the inventory. They are better capable of keeping track of what comes in or out. That said, it also helps to ensure two or more staff members are in charge of this task to keep each other accountable. Additionally, your inventory sheets must correspond to their on-site storage location.

8. Automate Current Systems

When it comes to doing inventory, nothing beats the manual system. However, automating can do great wonders for your business and is a great supplement to manual inventory. Point of Sale (POS) systems automatically deduct sales from listed inventory and can be very useful when you need to do spontaneous checks. 


If you need help keeping track of the inventory in your restaurant, don’t hesitate to call our team for assistance. We’d love to help you out.