Common Inventory Mistakes Most Restaurant Managers Make

Inventory is one of the greatest assets in a restaurant and must be managed effectively for managers to maximize profit margins. Mistakes in inventory management are made quite often, and can be challenging for managers to identify. When you’re busy handling the day to day operations of the business, like staff management, customer service management, and cost controls, it’s not easy finding the time to reevaluate processes that have been in place for a while. Nonetheless, it’s vital that you prioritize some time to evaluate areas that are more vulnerable to errors.

Here are 4 common inventory mistakes many restaurant managers make:

  1. Using intuition or educated guesses to drive the ordering process- The world is more data driven than ever before, so it makes sense that you should be relying on it to help drive your business decisions. After working in the industry for a while, it’s easy to succumb to the habit of “guesstimating” what you have in stock and what you need to order, but that strategy should only be used when necessary. There are many cost-efficient technology solutions available that will ensure you place inventory orders based on precise data, like historical consumption and sales trends. Remember, even if your intuition doesn’t always completely miss the mark, even a small savings per month can make a world of difference in the restaurant industry.

  2. Performing inventory counts every few months or less often- To successfully manage inventory, you have to track it often and consistently. Implement a daily check of your higher dollar inventory and at least a weekly spot check of others. It’s important to perform the weekly check on the same day each week to prevent unnecessary variances. Fiscal inventory, physically counting everything on hand, should be done at least once a month for accounting purposes. You can also automate this process, using restaurant point-of-sale software, to make it less time consuming.

  3. Ineffective employee training- All of your employees should receive some level of inventory training. Don’t try to absorb full responsibility for inventory management yourself. Anytime you are performing an inventory count, have at least one employee help with the process. The employee can count while you record, or you can delegate the process to two or more employees. This promotes accountability and reduces mistakes by ensuring your staff is trained on proper inventory management techniques.

  4. Maintaining unorganized stock areas- Inventory should be stored in a logical order that makes retrieving and managing it simpler. The “First-In, First-Out” method should always be used for perishables to help prevent food waste. This means your employees should use the food purchased earliest first. Consider organizing by date received or expiration date, and do your best to ensure similar items are grouped together.

One of the primary challenges that leads to declining margins in the food service industry is food waste, and a large part of that can be resolved by implementing an effective inventory management plan. According to a 2017 study, restaurants save $7 for every $1 spent cutting food waste. That’s a large expense reduction that can be captured by simply implementing a few best practices. You might also consider investing in restaurant inventory management software. Just by reducing your food waste, it would pay for itself in no time.

To find out how Data Central by Restaurant Magic can help you improve your inventory management, call us at (813) 288-2633 (toll free – 1(800) 933-4711) or visit our website at