Beef up your restaurant operation with these 19 restaurant inventory and COGS procedures 

Have you noticed inventory shortages at your restaurants? Chances are someone on your team may be to blame. In fact, The National Restaurant Association says that 3 out of every 4 inventory shortages are due to employee theft. Make sure you have the right restaurant inventory and COGS-related systems and procedures in place by following the best practices below.

Have solid training and procedures

• Train management on inventory counting techniques and results to create consistency among your team.
• Sequence inventory count sheet in order with storage areas, coolers, and freezers.
• Eliminate discontinued menu items from your count sheets.
• Plan at least half an hour into your schedule every week to write truck orders.
• Have dedicated staff accept deliveries and verify their accuracy.
• Have a check-and-balance system in place for every order. Have one team member write and another edit/process each order.
• Mandate that terminated employees return their uniform before they leave so that items aren’t stolen or misused. These uniforms can then be laundered and reissued, which can keep costs down.
• Have a policy and a designated location for storing and keeping employee belongings while they’re working.
• Store surplus uniforms in a secure location.

Review and monitor inventory data

• Require that the opening manager review the prior day’s inventory counts first thing in the morning – at least 3 to 5 items.
• Keep the forecasting variance at less than 5% for a day or week period – no bouncing day-to-day or week-to-week.
• Track sales forecasting successes and have individual inventory targets for every restaurant (either in dollars or a percentage of sales).
• Keep the forecasting variance at less than 5% for a day or week period – no bouncing day-to-day or week-to-week.
• Hold audits of the previous day’s ending inventory for accuracy (top 3 to 5 items).
• Monitor product transfer, borrow, and loan processes.
• Stay on top of beverage and paper inventory. Too much product purchased in one period that isn’t used can inflate the profit/loss statement.

Use tools to your advantage

• Use a sales forecasting tool box (a checklist of things to consider when forecasting –community calendar, marketing calendar, last year’s sales, trade area updates, construction updates, etc.).
• Implement a build-to-order system.
• Use a web-based reporting solution like Delaget Coach to review inventory activity reports.
• Create or use a system to track “inventory turns” or “days in inventory” to combat inventory fraud.