In our most recent edition of 2-Minute Tuesdays, Sr. Manager of Customer Education Trevor Bernatchez, outlines the importance of knowing how to find, and act upon, your restaurant’s product usage.
Read on to learn more, or watch the whole video (~2 mins) above.
Once you’ve taken two full inventory counts, as well as kept record of your received product between those counts, you’ll be able to calculate your usage.
As a definition, usage is the amount of a product or category of products that you are depleting from stock between any two inventory counts. In other words, the amount of each item that was used between these two inventories. Before we jump into how to actually calculate your usage it’s important to understand what makes up one ‘inventory cycle’ or ‘inventory period.’
Your first count is the ‘starting inventory’ and your second count is the ‘ending inventory,’ the beginning and end of your inventory cycle. Having a start and an end will allow you to determine your usage.
Since inventory and usage are rolling, ever evolving numbers, the ‘ending inventory’ for this cycle will become the ‘starting inventory’ for your next cycle, and so on.
On your inventory spreadsheet, create a new sheet or tab with the following columns: product name, unit size, starting inventory, received inventory (the amount taken in from deliveries), and ending inventory.
Once that is all lined up, just fill in the necessary info and follow this Inventory Usage Formula to find your product usage for this inventory period.
Take your starting inventory, add any received product from deliveries or transfers, subtract your ending inventory for this period and the remaining value will represent your usage for this inventory period.
This usage number is one of the most important elements in running a successful restaurant.
As you complete more inventory cycles, you’ll start to see some trends in your product usage that can help you make smarter ordering decisions.
You’ll be able to tell how much product you go through in week vs. how much you are sitting on in house.
Unless you are a really cash-rich bar, if you are sitting on more than 3 weeks of inventory in house then you should probably think about slowing down your spending a bit to open up the business’s cash flow.
Hopefully, you have a better understanding of how to calculate usage at your restaurant, and why it’s vital to your success. Now, just repeat what we talked about here on a regular basis and you’ll be well on your way to running a more profitable restaurant.
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