Why Weekly Restaurant Inventory Is Better Than Monthly Inventory

 In 5. Fred Langley, Operations, SMART Systems

Here at TheRestauranExpert.com we teach you that if you truly want to control your cost of goods sold and calculate an accurate prime cost on a week-by-week basis, you have to do your restaurant inventory weekly.

Typically this means you spend every Sunday night and early Monday morning counting.

At first you dread this because it means doing something you hate four to five times a month rather than just once. But you soon realize the positives, such as the ability to react to fluctuations in cost weekly rather than monthly.

Frankly, after a month has passed, there is nothing you can do about over-ordering food. But with weekly inventory, you can see the overages right away. It also gives you a week with a precise calculation that lines up with your weekly schedules to give you an up-to-date prime cost number you can react to.

Another bonus to completing your restaurant inventory weekly and on a Sunday night is you’re counting your inventory at a time when your shelves are at their emptiest. Counting on a weekly basis also forces you to be more organized. It forces you to get rid of those products you count week after week but never use because they are from an old menu or special item you no longer sell. The more visible and organized you make your products, the more precious or scarce they are to your staff. A good example is a tube of toothpaste. When it is new and very full, you put more toothpaste on your toothbrush. When it gets down to the bottom, you start putting less and less on your brush. It’s just human nature.

One argument we hear in favor of monthly inventory is the question of what to do with your monthly accounting numbers without a beginning and ending monthly inventory.

Let’s look at a month that ends on a Wednesday when your week’s end is set for Sunday. I am going to urge you make an inventory estimation rather than doing another complete restaurant inventory just three days later.

Here’s how to do it. Get your inventory value from your Sunday night inventory and add the purchases from Monday, Tuesday and Wednesday. Then multiply your sales for those three days by your cost of goods sold target. The product of those two numbers should be subtracted. In a snap you have added your purchases to your week-ending inventory and subtracted an estimated usage of product to give you a very good estimate of your month-end inventory.

With these tips I hope to motivate you to take action and do the extra work required to reach a lower prime cost. The most successful operations do weekly inventory. Why shouldn’t you put yourself in a class with the best?

Read more about the importance of inventory in our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

Fred Langley
Fred Langley is the director of operations and restaurant coach for TheRestaurantExpert.com. As a former chef and restaurant owner, Fred found a new passion in helping other restaurant owners find success with systems and now focuses on it full time.
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Showing 2 comments
  • Rick Hays
    Reply

    Great article

  • Russ thompson, Center Plate Restaurant Consultancy
    Reply

    Another point you may consider is WHO IS TAKING THE INVENTORY! Is it a fox in charge of the hen house setting or a true acurate inventory.

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