All You Need To Know About Restaurant Inventory Management

All You Need To Know About Restaurant Inventory Management System

Inventory consists of all the items or raw materials required to prepare dishes, and restaurant inventory management system helps you track each ingredient used in the dish. Inventory management systems integrated with the restaurant POS allows you to control and organize each and every aspect of the stock, maintains a smooth flow of supply and also helps you boost your overall profit. As the volume of business grows in a restaurant, inventory management becomes a crucial part of restaurant operations. Read these tips to ensure that you don’t make any Inventory Management Mistakes.

Restaurant Inventory Management Techniques 

Follow these seven essential Restaurant Inventory Management tips to control your costs and optimize restaurant operations.

1. Monitoring the Stock

You must always remember to organize your existing stock before bringing in a fresh stock.  POSist’s restaurant inventory management software gives you the available stock count at the beginning of the day, and the stock closing at the end of the day. It calculates the balance stock automatically and tallies it with the available physical stock.

The difference between the ideal remaining stock according to the recipe and order placed through the POS and the actual physical stock is called variance. Variance between 2-5% is acceptable as some ingredient is bound to get wasted during preparation. Anything over that is a matter of concern as it points at pilferage and theft. A negative variance implies that fewer products are being used for preparation which results in degradation in quality. Thus, the variance is an important factor in kitchen management.

2. Raw Material Management

All You Need To Know About Restaurant Inventory Management

Managing the inventory smartly is essential to avoid wastage. Use these points to make sure that your stock is efficiently used.

  • Try to adopt minimal stocking approach for your restaurant inventory, especially in the case of the perishables.
  • Try to use seasonal products. With smart menu engineering, you can use them for a season’s special. This way, you’ll be able to attract customers with something new, and also avoid wastage of perishables.
  • POSist prompts you to reorder when you run out of supplies. You can set a reorder level for each of your items. As soon as the ingredient reaches that level, a reminder email will be sent to you to re-order that ingredient in advance. This prevents the embarrassing situation of running out of supplies during operation hours. This is especially helpful in case of popular items and perishable items that need to be restocked frequently. Also, ordering only when required helps avoid wastage.
  • Make sure that items are being used on a First in First out (FIFO) basis. That is, use the older stock first. Only when the previous stock has been used up, use the newly purchased items to prevent wastage.

3. Recipe Management and Costing

restaurant inventory management, stock management, inventory, stock

Standardization and Management of Recipe are essential for proper inventory management as it helps in curbing food costs. In a standard recipe, the quantity of each ingredient to be used is specified; therefore the inventory management system can easily judge the number of days the remaining stock will last. Random use of ingredients leads to an imbalance in the stock and causes the stock to dry up before time.

Feed in your recipes in the POS software to assess the usage of raw materials with respect to sales. This leads to a lower pilferage in the restaurant. For bigger chains, it helps to guarantee the taste of the dishes as the recipes will be same across the outlets.

You can also get an estimate of how much preparing a dish would cost you by the help of recipe costing feature. You just have to feed in the recipe along with the portion of each ingredient, and the restaurant inventory management system gives you the food cost for that dish. This further helps you decide the selling price of that product. Ideally, the food cost should be 30% of the menu price or selling price. Read pro tips to control restaurant food costs here.

4. Central Kitchen Management

In the case of bigger establishments such as a long chain and quick service restaurants, you may have a central kitchen where the food is prepared and sent to the other outlets. POSist allows you to manage the overall circulation of the food based on the outlet requirements.

The Multi-Store Management Module helps you manage stock supplies across stores. You can manage your franchise outlets, by receiving their requirements automatically. When an outlet runs out of a certain supply, they can raise indent or a purchase order at their store POS. The request is received at the central kitchen and the stock can be sent to the desired outlet. While receiving the stock, it is very important to check and measure the stock for any damage or loss. The outlet receiving the stock can generate a GRN (Goods Received Note), that the stock has been in fact received. In the case of loss or damaged stock, the same can be mentioned in the GRN.

5. Shelf Life Management

Each item in the inventory has a specified shelf life. Some like rice can last for years, while some, like vegetables, have a life before they spoil. Therefore, managing the shelf life of perishables is essential. For each of the items in the inventory, you can specify for how long they can be preserved and subsequently used, before getting spoiled. If due to slow sales or some other reason, the items were not used during that period, you will be notified that they have been spoiled and should not be used for preparing dishes.

6. Roles and Permissions

restaurant inventory management, stock management

Thefts in the restaurant is a vice that cannot seem to be controlled despite all preventive measures. The variance feature mentioned earlier helps you detect a discrepancy in the stock to prevent your staff from pocketing the raw materials. However, you can completely avoid this menace with the help of POSist’s roles and permissions feature. With this, you can create specific roles for each task, and appoint people who would be held responsible for that task. All activities are logged, and different users can be assigned different modules to maintain a check on the inventory.

7. Reporting and Analytics

Reporting and analytic is another important feature of restaurant inventory management that helps in restaurant operations. The sales reports and the raw material usage helps forecast and create future plans. Profit and loss reports are generated depending on the stock sale and consumption. This feature further helps you to-

  • Analyze inventory trends- You can analyze the inventory trends to make informed decisions such as deciding the menu. Detailed reports based on the consumption of each stock gives insights on which ingredient is the most popular, and needs to be utilized more in the recipes.
  • Keep a track of stock and maintain accuracy- An accurate list of the available supplies helps you keep track of the daily and weekly usage

Does your restaurant inventory management system support all these features? Let us help you with the newest state of art technology to manage your inventory like a pro. Ask for a complete restaurant inventory management system here.


  1. Lots of great pointers here. I can't imagine what it was like running a restaurant before POS and inventory management systems existed. Thanks for sharing!

  2. Dear John,

    POS has certainly altered the entire restaurant operations and management, making it much smoother and efficient.

    Thanks for reading the article, we're glad you liked it 🙂

    Do check out our other articles for more tips.


  3. Really incisive article on F&B inventory management. Since your software already supports tracking the inventory consumption based on orders, I am wondering if there is a way to actually track the raw material using some technology to get a real picture of inventory utilization. Does that make sense for a restaurant owner ?

  4. […] Even though the Quick Service Restaurant seems like a small establishment, the number of orders that are processed every day at a popular outlet can be huge.  When a lot of orders pile up, it is very important to take note of the inventory. While choosing a restaurant POS software for their fast food eatery, owners often consider just the billing part and overlook inventory management. The inventory of a QSR is fast moving as there are a lot of customers every day as compared to other types of restaurants and it is never good to be out of a selling item. POSist’s Inventory Management System designed especially for Quick Service Restaurants allow you to set alerts when you are about to run out of an item.  This way you get ample time to restock your inventory. Read more about restaurant Inventory Management here. […]


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