Ed Heskett
Blog, Operational efficiency

Have you noticed inventory shortages at your restaurants? Chances are someone on your team may be to blame. In fact, The National Restaurant Association says that 3 out of every 4 inventory shortages are due to employee theft. Make sure you have the right restaurant inventory and COGS-related systems and procedures in place by following the best practices below.

Have solid training and procedures

  • Train management on inventory counting techniques and results to create consistency among your team.
  • Sequence inventory count sheet in order with storage areas, and coolers and freezers.
  • Eliminate discontinued menu items from your count sheets.
  • Plan at least half an hour into your schedule every week to write truck orders.
  • Have dedicated staff accept deliveries and verify their accuracy.
  • Have a check-and-balance system in place for every order. Have one team member write and another edit/process each order.
  • Mandate that terminated employees return their uniform before they leave so that items aren’t stolen or misused. These uniforms can then be laundered and reissued, which can keep costs down.
  • Have a policy and a designated location for storing and keeping employee belongings while they’re working.
  • Store surplus uniforms in a secure location.

drawing of guy with clipboard

Review and monitor inventory data

  • Require that the opening manager review the prior day’s inventory counts first thing in the morning – at least 3 to 5 items.
  • Keep the forecasting variance at less than 5% for a day or week period – no bouncing day-to-day or week-to-week.
  • Track sales forecasting successes and have individual inventory targets for every restaurant (either in dollars or a percentage of sales).
  • Keep the forecasting variance at less than 5% for a day or week period – no bouncing day-to-day or week-to-week.
  • Hold audits of the previous day’s ending inventory for accuracy (top 3 to 5 items).
  • Monitor product transfer, borrow, and loan processes.
  • Stay on top of beverage and paper inventory. Too much product purchased in one period that isn’t used can inflate the profit/loss statement.

Use tools to your advantage

  • Use a sales forecasting tool box (a checklist of things to consider when forecasting –community calendar, marketing calendar, last year’s sales, trade area updates, construction updates, etc.).
  • Implement a build-to-order system.
  • Use a web-based reporting solution like Delaget Coach to review inventory activity reports.
  • Create or use a system to track “inventory turns” or “days in inventory” to combat inventory fraud.

Be an LP pro with our loss prevention checklist