Inventory management and stock taking are painful processes for any business, however it seems it can be a far more daunting task for the drinks industry due to the level of estimation required and variances in the quantity of product sold. If you are a bar owner however, do not despair as there are tried and true methods that can be a saving grace come stock taking time.
Why is stock taking necessary?
The answer to this may seem obvious: to keep track of product (beverages) to ensure there is always enough product to satisfy customer demand without having too much that takes up valuable storage space. This is correct, however there are some important added bonuses to stock takes for a bar. It reveals how the bar is coping financially, where losses are occurring, how much each pour should cost and which products are popular and which should not be on the menu.
Stock taking is about usage. How is this calculated?
To calculate the usage of inventory, the stock count for the beginning and the end of the period is needed as well as the amount of received inventory stock during the period. Once these variables are known, they are inserted into the following formula: starting + received inventory – ending inventory
Once your usage is known, it is easier to estimate what and how much inventory stock is needed to ensure the bar remains stocked throughout the period.
How should a bar’s inventory be counted?
This is the tricky part of the process. Counting a bar’s inventory is more complicated than some other industries as it involves counting vessels which may be part-full due to the vessel not being the inventory stock necessarily but rather its contents. To ensure the counting is accurate, it should be conducted the same way each time (i.e. from left to right), there should be consistent stock taking periods, only count when the bar is closed and ensure ‘counters’ are trained properly.
Count bottles as they appear, recording them in the same position/manner. Count whole bottles followed by using ‘tenthing’ for part bottles. This is the process of visually dividing the bottle into tenths and counting how many tenths of liquid remain. Ensure this method of counting is done for each area of the bar so that the total is as accurate as possible. Find the sum of all the totals for the different areas and then repeat this process in the exact same manner at the end of the period, allowing a relatively accurate usage total to be obtained.
Choosing the System
Accurate inventory management is achievable with a range of systems, as long as counting is done properly and the system is used appropriately. This means, if you choose to use pen, paper and purchase orders or even inventory management software, then by all means, you can have your inventory in good control. The key is to be consistent and accurate in counting and estimating and to have well-trained and trustworthy staff so that incompetency, breakage or theft can easily be picked up, isolated and dealt with.
Inventory Management Systems
Many bars do in fact still use pen and paper records for inventory management with remarkable success, however inventory management software can certainly make the job a lot more straightforward.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.