What to Know About Restaurant Inventory Management in 2024

Digital tools are now available to assist restaurants in micro-managing their stock and inventory. Here’s what to know about how restaurant inventory management can help your venue boost its operational efficiency.

Looking for a complete guide on today’s best restaurant booking software? The latest technology helps restaurants to ease guests through an easy seating process and influence guest returns — especially helpful in a hectic hospitality environment.

What is Restaurant Inventory Management?

In practice, restaurant inventory management is the organisation of a restaurant’s goods and ingredients.

Inventory, in any industry, is the quantity of goods in stock. However, restaurants — and indeed any food business — have no choice but to treat inventory as a number one concern. This is because restaurants deal in perishable goods; therefore, part of the job is to create a high inventory turnover, keeping fresh ingredients on the move. 

Restaurant inventories vary, depending on the type of service they sell. A restaurant based in a city with an eclectic food scene, for instance, will stock a variety of ingredients to cater to a wider public.

With food inventories on their mind, restaurant owners have a lot to think about. Physical space, delivery schedules, and a beady eye over stock are all primary concerns managers and staff have to juggle about to maintain smooth operations.

Usually, restaurants handle inventory management via a pen-and-paper or digital spreadsheeting system. A system that requires manual counting to track stock may work for a small business, but as a restaurant grows, this methodology soon becomes untenable.

Still thinking, what is restaurant inventory management? Scholarly articles are available on restaurant decision making, with guidance on managing food inventory and reducing waste.

restaurant inventory management with Carbonara App
“Exotic ingredients” by Dirk Haun via Flickr (creative commons 2.0)

3 Reasons Good Restaurant Inventory Management Saves Money

For hospitality businesses all over, food inventory management is a top priority. It helps restaurants save money. Of course, good inventory management also has other benefits — quite simply discipline and good practice can help owners run a more efficient business without wasting financial resources and staff time. Here are the top 3 reasons good inventory management saves money.

1. Prevent food waste

Ordering the correct amount of stock helps lessen the likelihood of restaurant food waste. Unfortunately, this is a huge problem in the industry — and it’s costing millions in cash. In the UK alone, restaurants bin 320 million fresh meals a year. Consider an average of £9.99 per meal: shockingly, that means the national hospitality industry throws away an estimated £3 billion into the garbage bin each year.

2. Attain accuracy

Know accurately what goods and ingredients to buy. As a result, restaurants can calculate their overall proceeds and margins. The amount of stock plays a major role in determining net profits. With good restaurant inventory management in place, restaurants can make more informed business decisions.

3. Say goodbye to guest disappointment

Bad inventory management has further knock-on effects: one of which is the restaurant having to strike out certain items from the menu. With accurate stock management, however, restaurants can avoid clear and obvious errors. Guests return to eat out at restaurants that satisfy their needs — a full menu is a customer’s right.

How Restaurants Take Inventory

Since it is a bookkeeping exercise, restaurants taking manual inventory is notoriously tricky. We each have our own methods. We each have our own names for things. However, restaurants all use accounting tables to manually calculate their stock and inventory. It’s a standard.

This starts off pretty simple. To create an inventory table, a business needs to:

  • Add an “item” column recording the things themselves — meat, herbs, vegetables
  • Create separate columns to hold data on the quantity and cost of each item
  • Establish an optimum amount, or “par” quantity, of items. If quantity drops below the “par” number (i.e., the necessary amount), the restaurant will have to order more stock

Disadvantages of Manual Inventory Management

Both paper and electronic spreadsheets present an obvious problem: someone has to do all the data input. Figures, quantities, total costs — an individual on the team has to enter all this data, trawling tirelessly through facts and figures, leading to various disadvantages.

1. Human error

Let’s face it — we’re not all good with numbers. A manual restaurant inventory system requires a key eye for detail and accuracy. At the end of a busy shift, however, these are hard skills to draw on.

2. Time consumption

If there’s one thing restaurants need besides money, it’s time. A manual system hoovers up hours of staff time. Here’s an exercise: Calculate the time spent each week counting inventory and you’ll soon discover that it costs money too. Restaurant owners are paying staff to undergo this laborious task.

3. Manual Ordering

After tirelessly calculating your restaurant’s sums, a member of staff has to take the next logical step and manually make an order — except the time spent on inventory counts has inevitably delayed the process. As such, with a manual system in place, restaurants have to make later deliveries.

“Konro Grill” by Lou Stejskal via Flickr (creative commons 2.0)

A Quick Note On Digital Restaurant Inventory Management

Thankfully, there are digital options available that are instrumental in transforming typical manual restaurant inventory management into an easier, more streamlined process, less a headache, more a gentle breeze in the wind. Inventory management software relates to:

  • Organising inventory
  • Automating “par” levels (or necessary amounts) of items
  • Monitoring sales
  • Anticipating customer demand
  • Automating reordering of key items

Restaurants can use various forms of software to introduce a new approach to inventory management. For example, a POS system integrated with inventory management software helps keep track of sold items. Once a customer pays for their meal(s), the system keeps a record of the items the customer has just bought. It then automatically depletes stock items from the system. Eventually, once an item drops low to a certain level (the “par” amount), the system will incorporate this data and flag information for the next order.

A digital record of a restaurant’s inventory also has an added advantage: it helps restaurants calculate trends for future sales. A digital overlay can help restaurant owners spot top-selling items at a glance. More advanced systems even produce regular reports to help restaurants make decisions on their future inventories.

How Carbonara App Helps

Carbonara App isn’t an inventory management system, but the app’s special features can help further assist restaurants in managing their inventories.  

First, Carbonara App provides an online booking service. Restaurants can set up online bookings on Google Reserve to widen the scope of their consumer base. With an online booking service in working order, a restaurant can use accurate table counts to better estimate the number of items in their inventory they expect to use in a given night. 

Second, Carbonara App has a drinks pre-order system that :

  • Allows incoming guests to pre-order alcoholic beverages before they’ve even stepped through the door
  • Increases restaurant profits by creating a new stream of revenue, that is, through customer pre purchases on beverages
  • Mobilises inventory count of a restaurant’s drinks availability, digitising beverage orders for customers

The app’s drinks pre order system has other benefits too. For instance, it maximises guest excitement, giving customers a fresh drink to look forward to. One survey found that the majority of customers think pre-ordering is a good idea. So with Carbonara App, give your customers the power to order what they like, when they like.

Sign up to discover how its features can benefit your restaurant.

If you would like to know more about starting up a restaurant, read our starter’s guide to buying all the essential things you need: “A Complete 2024 Guide to Restaurant Equipment”.