Restaurant inventory management: a practical guide

In a lot of restaurants, inventory is a notebook in the storeroom and a chef who "knows" what is running low. It works until the chef is off sick, the chicken runs out on a Friday, or you find three unopened tins of oil behind the ones you just bought. Meanwhile cash sits on shelves, and some of it walks out the back door.

This guide sets up a system a small team can keep running: decide what to count and how often, set par levels with a simple formula, count quickly, check every delivery, and compare what you used with what you sold. You can run all of it on paper or a spreadsheet. Software just makes it faster.

1Decide what deserves attention: ABC your stock

Not every item deserves the same effort. Salt and napkins don't need a weekly count; beef and cheese do. Rank your items by monthly spend, using three months of invoices:

• A items: the handful at the top of the list that together make up most of your spend. Typically proteins, cheese, cooking oil, coffee beans, and any imported specialty items. Count weekly.
• B items: the middle of the list. Rice, flour, produce, dairy, drinks. Count every two weeks, or weekly if they spoil fast.
• C items: everything cheap and slow. Spices, dry goods, cleaning supplies, packaging. Count monthly.

Most restaurants find that fewer than twenty A items account for the bulk of what they spend. Controlling those well is worth far more than counting every spice jar.

2Set par levels and reorder points

A par level is the amount you want on hand right after a delivery. A reorder point is the level at which you place the next order. Two formulas cover most kitchens:

Par = daily usage × days between deliveries + safety stock

Reorder point = daily usage × lead time in days + safety stock

Safety stock covers a busy day or a late delivery. Start with roughly half a day to a day of usage for fast-moving items, and adjust after a month. Here are illustrative figures:

Item	Daily usage	Delivery every	Lead time	Safety stock	Par	Reorder at
Chicken thigh	25 kg	2 days	1 day	10 kg	60 kg	35 kg
Tomatoes	18 kg	1 day	1 day	6 kg	24 kg	order daily
Frying oil	6 L	7 days	2 days	12 L	54 L	24 L
Mozzarella	4 kg	4 days	1 day	3 kg	19 kg	7 kg

When you order, order quantity = par − what is on hand now. If chicken is at 32 kg when you check, you are below the reorder point, so you order 60 − 32 = 28 kg.

Review pars monthly and before any known change in demand: Ramadan, the summer season in Sahel or on the Red Sea, or a new menu. Usage should come from your sales, not from memory. Units sold per dish multiplied by the grams in each recipe gives you daily usage per ingredient.

3Count fast and count the same way every time

A count that takes three hours gets skipped. A count that takes forty minutes gets done. To keep it short:

• Print count sheets in the same order as the shelves, fridge and freezer, so the counter walks one loop.
• Count before opening on the same day each week, when nothing is moving.
• Use two people for A items: one counts, one writes.
• Count in the unit you buy and cost in (kg, litres, pieces), and weigh opened packs rather than guessing "half a bag".
• Rotate who counts, so no one person always controls the numbers.
• Date-label everything as it arrives, so the count also catches stock that is about to expire.

4Check every delivery at the door

A lot of stock loss happens before anything reaches the shelf. The supplier is honest, the driver is in a hurry, and nobody checks. Make receiving a fixed routine:

1. Compare the delivery with what you ordered, not just with the supplier's invoice.
2. Weigh meat, poultry and fish on your own scale. Count cartons and look inside them.
3. Check temperature and condition of chilled and frozen goods, and dates on dairy.
4. Reject or note anything short, damaged or out of spec on the invoice before signing.
5. Check the price on the invoice against the agreed price, every time.

Only one or two named people should be allowed to sign for deliveries. If deliveries arrive when neither is on shift, change the delivery window. For more on dealing with suppliers, see how to negotiate better supplier deals.

5Link recipes to stock: usage vs sales

This is the step that turns counting into control. For each A item, compare what you actually used with what your sales say you should have used.

Actual usage = opening count + received − closing count

Expected usage = Σ (units sold × grams per recipe)

Illustration for a pizza place over one week. Opening mozzarella count 18 kg, received 80 kg, closing count 17 kg, so actual usage is 81 kg. The POS shows 610 pizzas sold at 120 g of cheese each, so expected usage is 73.2 kg. The gap is 7.8 kg, which at EGP 380/kg is almost EGP 3,000 in a single week, on one ingredient.

The next step is to find out why: heavy-handed topping, waste nobody logged, staff pizzas, pizzas made but never rung up, or cheese leaving the building. Our guide to food cost percentage shows how to read this gap across the whole menu.

6Spotting theft and over-ordering

Signal	What it may mean	What to check
Gap only on expensive, portable items (meat, cheese, oil, coffee, spirits)	Theft	Storeroom access, back-door deliveries, rubbish removal routine
Deliveries recorded on days the owner or manager was away	Receiving fraud or short deliveries	Weigh the next few deliveries yourself
Invoice prices creeping up without notice	Supplier price drift or collusion	Compare invoice prices with the agreed list monthly
Same items always near expiry at count time	Over-ordering	Lower the par; order more often in smaller amounts
Frequent "emergency" runs to the market	Pars too low or not followed	Raise safety stock; check who places orders

Most gaps turn out to be process problems rather than theft. But you only find out which by measuring. For the less obvious ways stock disappears, read the hidden costs of restaurant inventory loss.

7Paper, spreadsheet or software

Paper works for a small café with a dozen A items and an owner on site every day. A spreadsheet adds formulas for par, order quantities and variance, and works well if one person owns it. Software earns its place when you have many items, several people ordering, or want usage calculated from sales automatically.

If you use Menyo, the Professional plan includes an inventory module: an ingredient library with pack sizes and costs, suppliers and purchase orders, receiving that updates stock and cost, stock counts that show variance, reorder suggestions for items at or below their reorder point, and an optional setting that deducts stock automatically when orders are completed, based on each dish's recipe. It keeps one stock pool per venue. Whatever you use, the rules above still apply: somebody has to count, and somebody has to look at the gap.

8Frequently asked questions

How do I calculate par levels for my restaurant?

Multiply average daily usage by the number of days between deliveries, then add safety stock for busy days and late deliveries. Base usage on sales multiplied by recipe quantities, and review it monthly.

How often should a restaurant do a stock count?

Weekly for high-value items, every two weeks for mid-value and fast-spoiling items, and a full count monthly. Count at the same time, before service, each time.

What is a normal inventory variance?

Some gap is normal because of trim, tasting and small errors, but it should be small and stable. A gap that is growing, or concentrated on one expensive item, needs investigating right away.

Should I buy in bulk when prices are rising?

Only for non-perishables, only with spare cash and storage, and only if the stock goes into your system. Buying perishables ahead of price rises usually ends up in the bin.

9Start with ten items

Don't try to control everything at once. Pick your ten most expensive ingredients, set a par for each, count them every Monday for a month and compare usage with sales. Once that runs smoothly, widen it.

If you want purchasing, counts and recipe-based usage in one place, try Menyo's Professional plan with a 7-day trial.