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Food Inventory Management And Best Practices


To ensure your establishment is running efficiently it is essential that you track your inventory. There are multiple benefits of tracking inventory such as less food loss, lower cost of goods, better vendor management, increased profits, and more satisfied customers. It’s important to understand the terminology when it comes to inventory management, otherwise, it can be easy to make a mistake that can impact your operations and finances.

What is inventory management? It’s the entire process of managing inventories from raw materials to finished products. It allows you to avoid an abundance of inventory or shortages. Examples of inventory in a food and beverage industry include:

  • Food
  • Liquor and beverages
  • Dry Goods
  • Spices

Inventory Management Best Practices

So how do you manage inventory? Keep your inventory well organized. It’s best to keep similar products near each other having the labels and expiration dates clearly visible. With that being said, utilizing the first in, first out (FIFO) method when organizing your inventory helps you use the oldest food and supplies before any others. 

Use the same staff to do inventory in order to learn spot trends or inconsistencies. Track inventory on a consistent schedule to see how quickly you are using ingredients. It’s best to take inventory at the same time each day, so for example before you open, or after you close. Utilize a food waste sheet to track the amount of food that has been spoiled or wasted in order to avoid future loss. Lastly, a point of sale (POS) system will help immensely with forecasting, order planning, accounting, and some inventory tracking. 

Restaurant Inventory Terms

Here are some common terms used to explain elements of inventory:

  • Cost of Goods Sold (COGS): The total cost of all the ingredients used to make menu items. This includes everything you serve to your customers (main dishes, garnishes, condiments, etc.). 
  • Food cost percentage: The percentage of your sale price that makes up the cost of your ingredients. (It is typically advised that restaurant owners keep food costs between 28% and 38% of revenue). 
  • Sitting Inventory: The total amount of a product that your restaurant has on hand.
  • Dead Stock: Refers to inventory that does not sell and does not have a likelihood of selling in the future.  
  • Depletion: The dollar value of a product your restaurant uses in a specific period. 
  • Usage: A measurement of how long you have before a product is entirely gone if you bought no more. 
  • Variance: The difference between the depletion of a product and how much your records say were sold. This is often tracked as a percentage. 
  • Yield: Represents the ratio of the amount of product your POS reports as sold compared to the amount actually used. 

How GoTab Can Help

A huge part of inventory management is the creation of your inventory and ability to change product availability. Your stock level is the amount of a certain product you currently have, for example, you have fifteen orders of chicken parm for the rest of the day. You can reserve the amount of a product that has already been placed for future orders. The amount of a product left available after the reserved orders will appear as ‘available’. To find out what is available, take your stock inventory and subtract it from your reserved inventory. 

GoTab’s inventory feature is great to use when you have daily/weekly specials, or you are running low on specific products. You set the count to the amount you have in stock and the system will let you know how many of that product is reserved (placed for a future order) and how many you have available to sell. Once the inventory level hits zero, it will automatically trigger the out-of-stock action you have chosen (86/disable). 


When products are running low or out of stock, there are multiple options one can choose when working with GoTab.

  1. Nothing: when your stock level hits 0, nothing will be adjusted to the corresponding item 
  2. Disable Product: when your stock level hits 0, the item will be disabled and removed from the customer-facing menu until you manually re-enable it again.
  3. 86 Product: when your stock level hits 0, the item will be marked as temporarily out of stock on the customer-facing menu and put back in stock the following morning automatically. 

No need to be going in and 86ing products every time you run out of something. Just set it and forget it!


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