Restaurant stock inventory
Restaurant management: Stocktaking
Carrying out an inventory of a restaurant's stock is often seen as a tedious task. However, it is compulsory to do it at least once every 12 months. However, it would be a mistake to stop at this legal requirement. In fact, taking inventory more frequently will allow you to quickly identify the origins of stock discrepancies in your products and thus improve the management of your restaurant.
Items purchased but not yet resold should not impact on the result of the activity. The inventory therefore makes it possible to determine the value of the stock at a given time and to check that no products have disappeared (through obsolescence, loss or theft) or are missing from the accounts (through management error).
The organization of the inventory of the stock
Your inventory should include all raw materials, goods and finished products still in your possession. However, you should not record capital goods and equipment that are not for sale.
To carry out your inventory, you can use Excel, working directly on the software and printing your count sheets to redistribute them to your team. We offer an Excel template to download which can be imported into our management software.
If you are working on a management software , you can download/import your data, which allows you to automatically check your stock differences and thus easily identify the origin of sources of financial losses. Thanks to this process you can limit losses and optimise your costs.
Counting goods in stock
After you have prepared, you can now count the goods in stock. It is important that you do not count the products twice so that the quantity of items in stock is not distorted. To do this, divide the work well with your team. It is not uncommon to close restaurants for "stocktaking" as the whole team is mobilised during this period.
Assign each person a storage area (bar, kitchen, cellar, cold room, commissary, etc.) to avoid duplicating the count.
Many principles must be respected in order to ensure a quality inventory:
- Principle of segregation of duties and supervision: your pre-formed counting teams must be supervised by a manager of the department in question. This reduces the risk of fraud in the system;
- Counting principle: as mentioned earlier, distribute counting sheets to your teams to facilitate the process. Write in ink and avoid using pencils. Have the count sheets validated by the person in charge of the inventory, who can even do the count again to check the values;
- Completeness principle: all your stocks must be counted, do not leave any out. Every corner of your restaurant must be checked (kitchen, storeroom, shop, cellar, counter, bar, etc.).
Good organisation will ensure that your inventory is accurate and reliable, and that you save time. Setting up and carrying out the inventory may seem like a waste of time, but simplifying the management will save time in the long run and avoid any errors in costs or quantities.
Our advice: try to favour closing days to do your inventory to avoid having a fixed stock during the count.
Make your inventory
Here are the different steps to carry out your inventory.
Once your inventory is complete, you now need to value your stock, i.e. determine its value.
There are two ways to valuate stock:
- The "First in, First out" method consists of valuing the stock at the last known price by consulting the last invoice.
Indeed, in restoration, it is considered that the stock rotates fast enough so that the items in stock belong to the last delivery. The logic is chronological.
This technique is frequently used in small structures because of its simplicity of application.
- The "weighted average cost" method: consists of valuing your stock at average cost.
To summarise, WAC = [ Initial Stock Value + Input Value - Output Value ] / [ Initial Stock Quantities + Input Quantities - Output Quantities ].
For more information on stock valuation, see the Entrepreneurs' Corner.
The price indicated in your inventory must be shown exclusive of taxes, as shown on your purchase invoices.
You should also take into account the commercial discounts made by your suppliers.
Then, to calculate the value of the total stock, multiply the quantities by the unit value, and finally add up each line and you will get the total value of your current stock.
Caution: You are not allowed to valuate a stock on the basis of a target retail price.
To save you time, we provide you with an inventory template made on Microsoft Excel. It is easy to use, fully customisable and adapted to your needs. You can download the template for free below:
Errors to avoid
Here is a list of errors to avoid so that your inventory is as reliable as possible:
- Keep your inventory list up to date (don't forget any products)
- Don't mix valuation methods and update your prices
- Do not mix the sales prices including and excluding VAT.
- Do not confuse the units (drums, L, cL, ...)
- Distinguish between gross and net weight: refer to your technical data sheets (the invoicing unit may be in gross weight, use net weight)
- Create data sheets
- Choose the day of your inventory carefully (receipts accounted for even though they are part of the next month's purchases)
- Be aware of typos in your inventory (watch for abnormal amounts in the total column)
The usefulness of a management software to carry out the inventory of your restaurant
Management software allows you to take your inventory. Thanks to Koust, you will be able to carry out your inventory quickly and easily. The entry of products in your inventory has been simplified on mobile phones and tablets so that you can use your phone to enter the products as you move around the various storage areas (bar, kitchen, reserve, cold room, etc.). At a glance, you will see the stock differences on all your items. You will also be able to export the recorded data to an Excel file in order to carry out the count on a sheet.
In addition, once the inventory and data import is complete, you will be able to identify potential stock discrepancies: through the previous inventory and by comparing your actual stock with your theoretical stock over the period you want. This element of our management tool helps to avoid certain internal problems. This is usually overdosing but on a large scale it represents a significant cost to the company. Stock control is becoming more and more essential in the catering industry, and digital technology is an opportunity and an aid to this stock management.