How to take restaurant inventory

To take restaurant inventory, count every item on hand at the same time each week, usually after close on the last day of your week and before the next delivery. Walk the storage in shelf order with a sheet that lists items in that same order, count in the unit you buy in, and price each line at the latest invoice cost. Total it, and that number is your ending inventory.

The count matters because it is how you find out what you actually used. Cost of goods used is beginning inventory plus purchases minus ending inventory. Without a reliable count, your food cost percentage is a guess, and so is every decision you make from it.

What a restaurant inventory count is for

An inventory count answers one question: how much product did this store use this week? You cannot see that from invoices alone, because some of what you bought is still on the shelf.

The formula is simple:

• Beginning inventory is what you had at the start of the week. It is last week's ending count.
• Purchases are the invoices received during the week.
• Ending inventory is what is left at the end of the week.
• Cost of goods used is beginning inventory plus purchases minus ending inventory.

Divide cost of goods used by net sales and you have food cost percentage for the week. Our guide on how to calculate food cost percentage covers that step in more detail.

How to set up a shelf-to-sheet inventory sheet

Most bad counts start with a bad sheet. Fix the sheet once and every count after it gets faster.

1. Walk your storage in a fixed path: dry storage, walk-in, freezer, then the line. Write down every item in the order you see it.
2. Build the sheet in that exact order. This is shelf-to-sheet. The counter never has to hunt for a line.
3. Next to each item, write the count unit. Use the unit on the invoice where you can, such as case, bag or each.
4. Add the pack size, such as "case of 160" or "5 lb bag", so partials are easy to work out.
5. Add the current unit cost from the latest invoice.
6. Leave space for partials. Count part cases to the nearest tenth, or count opened cases by the each.

Then make the shelves match the sheet. Label each shelf spot with the item name. When a delivery comes in, it goes to its labeled spot, behind older stock. That is also how FIFO rotation cuts food waste.

How to take a restaurant inventory count, step by step

Run the count the same way each time. The goal is a number you can compare week to week.

1. Pick a fixed time, such as Sunday after close. Do not receive deliveries during the count.
2. Use two people where you can. One counts out loud and one writes. It is faster and catches mistakes.
3. Start at the first shelf on the sheet and go in order. Do not skip ahead.
4. Count full units first, then partials. Write both, such as "6 cases + 22".
5. Count open items on the line and in prep, not only the walk-in.
6. Mark any item on the shelf that is not on the sheet. Add it before the next count.
7. Extend each line: count times unit cost. Total each section, then the store.

Prices change. Update unit costs from the latest invoices before you extend the count, or the total will be off even if every count is right.

Weekly inventory vs monthly: how often to count

A monthly count is enough to close the books. It is not enough to run the store. By the time a monthly count shows a problem, you have paid for four weeks of it.

A common setup:

• Weekly, count the items that make up most of your food cost. In a burger concept that is usually proteins, cheese, fries, buns, produce and paper. Often 20 to 40 items cover most of the dollars.
• Monthly, do a full count of everything for the P&L.

If your weekly count of key items stays under an hour, many stores find it worth moving to a full weekly count. The extra lines are usually cheap items, and a full count makes the weekly food cost match the monthly one.

How to turn the count into cost of goods

Once the count is totaled, the rest is arithmetic. Here is one week at Provo.

Check the invoice dates. Purchases should be the invoices for product that arrived between the two counts. An invoice for product that arrived after the count belongs in next week.

Now compare that 31.3% with what it should have been. Your POS knows what was sold, and your recipes say what each item uses. The gap between the two is variance, and it is where most food cost problems live. Our guide on actual vs theoretical food cost walks through it. Food cost also feeds prime cost, the number most owners watch first.

Common restaurant inventory count mistakes

• Mixing units. Counting cheddar in pounds one week and bags the next is the most common error. At Provo, 17.5 pounds entered as 17.5 bags would add $259 to ending inventory and make food cost look about 0.85 points better than it was.
• Counting on different days or times. A Sunday-night count and a Monday-morning count after a delivery are not comparable.
• Old prices. A count extended at last quarter's costs is wrong even if every unit is right.
• Skipping the line and prep areas. Product on the line is still inventory.
• Estimating instead of counting. "About half a case" a few dozen times adds up.
• Changing what counts. Counting prepped food one week and not the next moves food cost by itself.
• Not fixing the sheet. If an item keeps appearing that is not on the sheet, add it.

When a week's food cost jumps or drops by more than a point, check the count before you change anything in the kitchen. Most single-week swings are counting errors, not real changes in use.

A weekly inventory habit that holds up

Keep it to one fixed routine. Whoever runs the store owns it, whether that is the owner or the GM.

1. Count key items Sunday after close, shelf to sheet, two people where possible.
2. Monday morning, update unit costs from the week's invoices and extend the count.
3. Work out cost of goods used and food cost percentage.
4. Compare it with the last four weeks. A change of more than a point gets a second look at the count first, then at waste and portions.
5. Write down one thing to change this week, and check it on next Sunday's count.

If you run several stores, ask each one for the same food cost number on the same day. It turns a pile of spreadsheets into one line you can scan, which is the point of a weekly multi-unit review.

The count gives you the cost side. AI COO connects to each store's POS and accounting, compares the store with its own recent weeks and with the middle store in its brand, and sends the owner one specific lever when something moves. You can see what it connects to on the connections page.

General information for restaurant and franchise operators, not legal, tax, accounting or financial advice. Figures in examples are illustrations, not predictions or promises of results. Laws and platform policies change and differ by location, so check the current rules and talk to a qualified advisor about your situation.