How do I track inventory for a restaurant?
Restaurant inventory tracking doesn’t require counting every ingredient daily. Most restaurants do well with weekly counts of high-value and high-volume items combined with monthly full counts. The goal is knowing your food cost percentage and catching problems before they eat your margins.
Start with a master inventory list organized by storage location. Walk-in cooler items together, dry storage together, bar inventory separate. This makes counting faster and more accurate because you’re not jumping between areas. Count the same items at the same time each week, ideally when inventory is relatively low. Sunday night or Monday morning before deliveries works for most places.
Calculate your food cost percentage after each count. Take beginning inventory plus purchases minus ending inventory to get cost of goods sold. Divide that by food sales for the period. Most restaurants should run between 28% and 35% food cost depending on concept. Fine dining runs higher. Pizza and pasta concepts typically run lower.
Compare actual food cost to theoretical food cost when possible. Your theoretical cost is what you should have used based on recipes and sales. If your menu says a burger uses 6 ounces of beef and you sold 200 burgers, you should have used 75 pounds. The gap between theoretical and actual is waste, theft, over-portioning, or counting errors. High-variance items need attention. If prime rib is consistently 15% off but chicken runs at 2%, you know where to focus.
Your POS system probably has inventory features you’re not using. Most modern systems can track theoretical usage based on sales. The data isn’t perfect but it’s useful for spotting trends. Dedicated inventory software like MarketMan or BlueCart works well if you’ll actually use it consistently.
For bookkeeping purposes, inventory counts feed directly into cost of goods sold. Your monthly books should reflect actual inventory values, not estimates. This makes your profit and loss statements accurate and helps with tax planning. A bookkeeping service familiar with restaurants can set up your chart of accounts so inventory and COGS flow correctly.
Don’t overcomplicate the system. A spreadsheet works fine for most independent restaurants. The discipline of counting regularly matters more than the sophistication of your software. If you’re not reviewing the numbers weekly and asking why food cost spiked, you’re not actually managing inventory. You’re just counting things.
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More Questions
Can I switch bookkeepers mid-year?
Yes, you can switch bookkeepers anytime. Your books are your property. The transition is smoother than most business owners expect if you get the right files from your current bookkeeper.
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Retainers are recorded as a liability when received, not as income. You only recognize revenue as you perform work against the retainer, moving money from the liability account to revenue over time.
Read answerWhat is COGS for a restaurant?
COGS (cost of goods sold) represents the direct cost of food and beverages you sell to customers. It includes everything that becomes a menu item but excludes labor, rent, and other operating expenses.
Read answerWhat is bookkeeping cleanup?
Bookkeeping cleanup corrects and completes historical financial records that have fallen behind or become inaccurate. It involves reconciling accounts, fixing categorization errors, and establishing accurate balances you can trust.
Read answerHow do I categorize business transactions?
Assign each transaction to a consistent account in your chart of accounts. The key is using the same category every time for similar expenses. Consistency matters more than getting every category perfect.
Read answerHow do I track business expenses properly?
Separate business and personal finances completely, record expenses promptly with the right category, and save receipts digitally. Reconcile your accounts weekly to catch mistakes while you still remember what happened.
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