If you are not a Bar PoS user, then you and your staff must be spending hours every single day counting bottles of liquors and taking bar inventory manually. It goes without saying that managing inventory is a mind-numbing job. And yet, inventory is one of the biggest investments in any type of restaurant or bar model. So, if you miscalculate, you would be burning a deep hole in your pocket.
The whole idea behind taking inventory is to understand the rate of consumption, check for any damages or expiries (yes, liquors too run bad at times), and plan your inventory purchases accordingly. But once, there is an inventory management system set, then all you have to do is, follow and repeat the system!
How To Optimise The Bar Inventory?
The first step that you should take before starting bar inventory is to mentally prepare yourself for a long night! And then understand that this is how it’s always going to be. A little head up; Ideally, liquor inventory should be done bi-weekly or monthly. But once you have the inventory plan in place, the process would gradually become simpler and quicker.
1. Categoise You Inventory
When a bar owner hears the word ‘Whisky’ there are at least 10 different brands popping into his mind. And that is how you start by planning your bar inventory management; Categorise. This includes creating separate category/ brand/ type/ quantity/ measurement-wise spaces in your liquor storage room. Think of it like mapping your liquor. When you, your mixologist, bartender or any other staff needs wine, they should know where each and every different type of wine is stored. This way, when you are taking your opening inventory and closing inventory, you can simply check the quantity and the storage areas to know your consumption rates and even your product variance.
If you handle a massive amount of liquor and large storage, then don’t be hesitant from preparing a detailed excel sheet to keep track. You can create a standard excel template, print it and use it for manually recording your inventory!
2. Measure Pour Cost
Pour cost simply mean the cost at which you are selling your cocktails in percentage to the cost at which you acquired all the ingredients to prepare them. In bars, liquor often gets wasted either by spillage, theft or overpouring. If you do not calculate your pour cost, you would not be able to measure your ROI (return on investment). Liquore and cocktail ingredients are, after all, investments. And so, by failing to know how much you are making off each item using the stocks, you cannot know the overall profit made off your sales.
The lower the pour cost, the better. It means that you are making more money by investing less. When you have this data, you can regulate the prices in your bar, update the menu or recommendations accordingly and understand the customers’ trends.
3. Count Everything
When we say everything, everything every time! The ideal practice is to count your inventory before opening your bar and then count it once again when the bar closes. This is the thumb rule! Even those bottles which have been opened and have barely a quarter. The bar industry runs on per unit profit. And so, not counting the smallest quantity of liquor is a loss. Start by measuring all the liquor and inventory used at the main bar. This is the bar where your mixologists and bartenders prepare cocktails or drinks for your customer. But these people have their hands full during the rush hours or happy hours and so, they cannot manually update about every single drink sold.
The best way would be to sit alongside your waiters and billers to collect all the sales receipts and tally them with the remaining stock. Once this is done, you take the same process to the back bar, storage room and walk-in coolers where bar inventory is stored.
It is a very tedious job. Coordinating with so much physical data and the staff can take up a lot of time after the closing hours. The staff might lose, misplace, wrongly cancel orders or serve different orders during the rush hours. But all of this can be automatically done within minutes with an efficient PoS system! By automating the inventory of your bar, you would have more time in hand to work on business strategies, bar marketing and customer management.
4. Educate Your Staff
Bar inventory cannot be a single man’s process. The owner needs the assistance of his/ her staff to manage the bar and its inventory! It is the responsibility to educate and train the bar staff to manage inventory and monitor the sales. Teach them ways to reduce spillage and wastage. They should be able to estimate the sales and the number of bottles consumed by tallying the inventory by themselves. If you fail to imbibe this disciple and teach them inventory management, your work would double and you might be chasing your own tail trying to locate the lost or stolen inventory.
When taking manual inventory, you can use the excel sheet you printed and attach it outside the store. This way whenever any one of your staff members uses inventory, they can put it down in writing on the inventory sheet.
5. Calculate All Your Expenses
This is the most crucial part of your business. After all, liquor does not come cheap. These expenses include the cost of acquiring the ingredients, the cost at which it is sold, the cost of remaining inventory, pour cost, cost of inventory lost or expired, etc. These all expenses when deducted from your sales give you the net profit.
Knowing all your expenses is essential in either overstocking or understocking. In detail analyses of these data can tell you where your inventory is being optimized and where it is being wasted.
6. Use PoS Technology
This is the best way to optimise your bar inventory! The entire inventory management is automated in the PoS system within minutes. This data is stored and managed by the PoS and so, the owner can review, download and analyse this report any time and anywhere. PoS even helps manage the pour cost by keeping track of every single sale and item-wise inventory usage. Many bars have different billing counters and so, the entire task of inventory management becomes double. This can be simplified using the PoS which records all the sales made at different terminals by every individual staff member.
By using the PoS system, you can not just relieve yourself from the daunting task of inventory management, but can even manage your entire staff to monitor any theft, incorrect sales and even customer feedback! The PoS would even track the expiry dates of your inventory and inform you beforehand about the stock shortage.
Hope this blog was helpful. Keeping track of bar inventory is a tough task. But with a little enthusiasm and help, all of it can be sorted. And once you are done doing inventory, you can pour yourself a cold glass of beer and relax. Cheers to that!
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