Managing inventory – and your time
While there are many ways manage stock counts, there are some ways that work better for certain concepts than others. For some, more frequent inventory checks are necessary to make sure product quality is maintained. For example, for a restaurant that thrives on fresh, daily-made items, a daily inventory count may be necessary, as ingredients will have a short shelf-life.
Yet many businesses default to daily or weekly counts, even for inventory that doesn’t spoil as quickly as local fruit or veg. These counts are time consuming, can delay end-of-month reporting, and are error prone, especially with more manual counting systems. Of course, the more frequently stock is counted, the more time (and therefore, money) is spent counting it. As obvious as it sounds, this is a critical factor for certain businesses. The amount of time spent overseeing inventory on a daily or weekly basis may actually be more than the discrepancies within the inventory itself.
For businesses with strong loss-prevention systems in place (such as double-checks on how wastage is recorded, a tool like Fourth Analytics to get a good understanding of actuals vs. theoretical, 3-way invoice matching to prevent initial loss at the ordering level), daily or weekly inventory checks may be an unnecessary expense. For these businesses, selecting a few items to spot-check regularly (such as high-theft potential items like alcohol, goods that spoil quickly or items with high loss-percentages like janitorial supplies) against the theoretical can help keep variances in check, while limiting the actual amount of time spend overseeing inventory. In this way, they can manage their inventory by exception – looking at discrepancies without having to review every line item each time.
Some restaurants may then choose to tailor their counting frequency by item type. This might be a daily count for high-priced and fast-moving items, weekly counts for most food and beverage, monthly counts for non-consumables, and annual counts for machinery and cookware. This also helps limit the amount of time spent on daily inventory reviews. After all, the labour spend associated with counting sugar packets shouldn’t end up costing your business more than the sugar itself.
As mentioned above, you need to find the right method for your business. In conversations with customers who are starting to use our Inventory Management solutions, we generally recommend a weekly approach to start, so that any anomalies can be highlighted, and any setup issues are addressed quickly (rather than at the end of a month). As the operation gains familiarity with the new way of working, adjustments to a more blended approach can be made.
If you’d like to understand more about how our solutions can help you manage your inventory more effectively, schedule a free demo today.