Restaurant Inventory Management

Restaurant inventory management is an integral part of restaurant business management. Operating a restaurant is not only about designing menus, decorating the area and hiring qualified chefs, waiters and bar staff. The restaurant owners need to win new customers, create repeat clients and develop their customer base in conditions of growing competition.

From the beginning of operation, restaurant businesses are always looking for the ways to become more competitive in the market, decrease costs, reduce waste, optimize service and improve revenues. Restaurant businesses often experience challenges in management, finance, planning and competition areas that need to be carefully addressed to achieve success. One of the core challenges is the effective inventory management. You need to consider various issues to stay competitive and run your business efficiently.

Restaurant inventory management is one of the essential building blocks of the successful business. In simple words, this is a process of tracking products and raw materials that incoming to your restaurant, resources required to serve the clients and the amount of materials left over. Effective inventory management helps with the following:

  • Resources tracking;
  • Stock control and organizing;
  • Inventory monitoring;
  • Supplies analysis;
  • Better forecasting;
  • Sales and profit improvement.

The complexity of restaurant inventory management depends on the size of the business. As the business grows, inventory management becomes one of the most critical processes in day-to-day restaurant management. If you, as a restaurant owner, organize this process correctly, you will benefit from saving lots of time and financial resources. Besides, you will keep your staff motivated and make them work at full efficiency.

The process of restaurants inventory management consists of monitoring, tracking and analyzing all the raw materials and ingredients required for the offered menus, organizing and controlling each item of the stock and providing a smooth flow of supplies needed for running a successful restaurant business.

Efficient restaurant inventory management

To effectively run your restaurant business, you need to know some important restaurant inventory management techniques. For example, you always need to manage raw materials. You can create a new menu using seasonal products. Offering new menu items attracts customers and helps business owners to efficiently use perishable resources to avoid waste.

There is a specific process focused on managing usage of the ingredients – shelf life management. It shows the recommended time of usage, how long the products can be stored and how they can be used under specific conditions of their distribution and storage. Considering these facts, restaurant business owners can introduce particular dishes and pricing policies in the menus.

An important thing to do is to monitor your waste. You need to regularly ask the questions “why do I have this amount of waste?” and “what can I do to decrease this amount to make my business more effective?”. The waste and losses need to be recorded. Good thing to do is to transfer the waste into their financial equivalent. This will help you see the amount that could be spent in other areas of your business operations. Obviously, measures of waste prevention need to be put in place to increase the efficiency of your restaurant business.

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Focus areas

Dealing with non-perishable ingredients, you will need to make sure you operate on the first-in, first-out (FIFO) basis, meaning that the oldest inventory ingredients need to be sold or used first. You will need to monitor the stock at the beginning of each day and at the end of the day. If you have other outlets of your restaurant, the stock monitoring becomes more complicated and needs careful attention.

The effective restaurant inventory management will show you how much time the remaining stock will last. It will also help you to monitor raw material usage, forecast and create future orders and supplies. Analyzing the demand and the inventory trends is extremely important for any restaurant business. You need to stay informed about the usage of raw materials and the ingredients based on the consumption.

The customers’ preferences change from season to season, so there is no chance to have an exact forecast of what will be consumed during this period the next year. However, an accurate list of the consumed menus will help you to monitor the usage of the ingredients during the day, week and month.

In recent years, the restaurant owners understood the importance of effective restaurants inventory management. Experts recommend developing an inventory system and training the staff to monitor and control the inventory of the restaurant as well. For example, the staff can take responsibility for maintaining the storage temperature of specific fruit, vegetables, meat, spices, and other ingredients.

Every professional restaurant owner knows that every menu, every prepared dish, and every product consists of a set of ingredients and materials. Even a simple cup of coffee, in terms of serving it to the customer, includes a combination of water, coffee and sugar. In the case of more complicated products, such as home-made pasta, you need to count at least the consumption of the eggs, flour, salt and water.

You can manage your inventory lists manually by creating an inventory sheet including item descriptions, the quantity of the products received, the number of products sold, and then calculate the total amount of products and the amount of remaining quantity. However, as the restaurant business is growing bigger, there is a higher chance to make mistakes in managing the inventory list manually. Avoiding human error is impossible. That’s why the restaurant owners tend to use software and digital systems to automate the operation processes, monitor the usage and waste of raw materials, and manage the stock.

Restaurants inventory management process Inventory monitoring Inventory monitoring is required due to the disproportion between supply and demand. You never know what your customers will order this day and what they will ask for tomorrow. Dealing with this fact and managing it is a key to success of every restaurant business owner. It is essential to order new stock only when there is a need for it.

Inventory monitoring is an essential and obligatory ongoing task to do. It includes setting up systems that do the following:

  • Track and record inventory,
  • Manage deliveries,
  • Monitor amount of materials used and products required,
  • Develop specifications for purchasing,
  • Determine the frequency of deliveries,
  • Analyze the inventory data.

All these operations will help to improve the process of inventory and stock management. As a restaurant business owner, make sure your inventory amounts are accurate, raw materials and ingredients costs are correct, procedures for proper usage of the materials are in place, and the waste is tracked.

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The restaurant businesses need to keep the record and monitor all the raw materials and their amount and identify the right moment to order more. You will need to record all this information and update it regularly. As it is physically impossible to count all the materials That you need for your business, restaurant owners tend to purchase inventory management software to control costs and optimize the restaurant operations.

Inventory forecasting

Inventory forecasting contributes to effective planning of available resources. Forecasting the inventory will help to decrease the stocks to the minimum, minimize the waste, and, therefore, increase revenues. In the restaurant business, there are various factors which influence the process of resource planning. For example, the holidays or events which take place in the city might lead to the higher volume.

There might be more visitors during particular times of the day: during a morning rush, during the lunch or in the after-work hours. Unpredictable factors can influence restaurant volumes as well. For example, unexpected weather conditions, such as rain, may lead to an increase or decrease in the number of customers, as their plans suddenly change, and they decide to spend their time differently.

In any case, you will need to forecast the inventory in terms of having enough resources for operation and having the right staff in the right place at the right time to serve the guests. Experts also recommend tracking the restaurant sales numbers based on the similar time periods in the past. That’s why every successful restaurant business needs to have an automated inventory management system to forecast the resources required.

Restaurant inventory management software

Restaurant inventory management software includes managing operations, such as inventory management, billing, ordering and queue management. It aims to increase productivity and helps to efficiently use all resources which are needed for the successful running of the restaurant business.

Recipe costing

Recipe costing is one of the essential parts of effective business operations. Restaurants inventory management will help plan the proper amount of ingredients needed for the menus, which will lead to decreased costs. It will also give the restaurant owners an overview of which menus and dishes attract the customers. You will have an opportunity to introduce new culinary masterpieces which are of high demand with the clientele.

Recipe costing will also help to put the correct price tag to each dish based on the demand and the prices for raw materials and ingredients. To set the competitive selling price for a menu, you will need to estimate the number of resources (including financial, human, inventory resources, production, IT) which are required for the preparation of the menu.

Calculation of the recipe costs, based on the ingredients and their quantity needed to prepare a menu, will allow to cut down waste, manage staff hours, track inventory and maximize the profits of the restaurant. Using the right tools, techniques and restaurant inventory management software, you will have a chance to monitor and update prices regularly, change ingredients in the recipes and track the sales of your menus more effectively.


Integrations are used to automate your restaurant business. You can easily integrate different restaurant management software to synchronize data among all the software and apps you are using to run your restaurant business. Quandary can help you organize access, integrate and transform data from various systems and applications.

360 kitchen management

360 kitchen management is vital to monitor and forecast the sales, manage the restaurant inventory, set the prices for the menus, create recipes, order the amounts of ingredients needed, and determine the right quantities with a focus on the forecasted volumes. Good restaurant inventory management software centralizes everything around the menu.

Quandary can help you to plan and monitor the use of the kitchen resources. As a business owner, you will have a chance to manage your costs, increase profitability, reduce the costs of purchases, track the waste and foster growth of your business. It will also help you to create an automated communication network among your staff to increase work efficiency, productivity, and business operations.

Restaurant inventory management system

Implementation of the restaurant inventory management system helps to connect point-of-sale systems, kitchen operations, back-of-house applications and contributes to accurate purchasing, better inventory forecasting, and more effective staff involvement.

Managing the restaurant inventory manually is very complicated. It can lead to human errors and the decrease in output and sales. The restaurant inventory management system should be easy to use and must be mostly automated. It helps the business owners to decrease costs and increase revenue. It helps to plan menus while monitoring food usage which includes sold ingredients and products needed for future periods.

Restaurant businesses have an opportunity to avoid shortages and surpluses of the products and, therefore, avoid waste. The restaurant’s inventory management system also helps to determine the right cost for the food, monitor the profit margins and set the correct number of employees needed for the effective operation of the restaurant.

Quandary can always offer the best solution to make your restaurant business successful. Get in touch now for a free initial consultation.

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