Why monthly inventory? Optimize shrinkage & cost of goods sold
A monthly inventory in the food service industry helps to control the use of goods, shrinkage and breakage.
Why you need a monthly inventory - How to optimize your cost of sales, shrinkage and breakage
In the restaurant and hotel industry, every euro counts. If you don't have your inventory under control, you risk high losses - often unnoticed. Shrinkage, breakage or incorrectly calculated use of goods in particular remain invisible cost drivers without regular monitoring. This is precisely why monthly stocktaking is an indispensable tool for every professional business.
Find out more in this blog:
- Why a monthly inventory is the key to better cost control
- How to recognize shrinkage and breakage with simple calculations
- Which specific measures will secure your profit
Why is a monthly inventory so important?
The annual inventory is mandatory - but it's not enough. A monthly inventory provides you with an ongoing overview of the flow of goods, stock levels and potential losses. And the best thing is: you can recognize early on where money is being lost and can take countermeasures.
Your advantages:
- Control of the use of goods
- Early detection of shrinkage and breakage
- Better purchasing conditions through predictability
- Preparation for tax and company audits
Calculate cost of sales professionally
The cost of goods sold shows how much goods you have used in a month - and how much it has cost. The formula:
Cost of goods = opening stock + purchases - closing stock
An example from practice:
- Opening balance: € 7,000
- Purchases: € 28,000
- Closing balance: € 9,000
- Turnover: 100,000 €
Cost of goods = € 26,000
Cost of goods sold in % = 26
Whether 26% is good or bad depends on the concept - fine dining, casual or take-away have different target values. General guide values are therefore not very meaningful.
Why check monthly?
Themonthly comparison allows you to recognize deviations early on - and take targeted countermeasures, for example by adjusting purchasing quantities, prices or warehouse processes.
Finally making shrinkage and breakage visible
Shrinkage is caused by theft, incorrect portions or spoilage. Breakage - such as broken bottles - is an everyday occurrence in the food service industry. However, both are often not documented and therefore remain an invisible cost factor.
This is how you calculate it:
Shrinkage = difference between actual consumption (according to inventory) and theoretical consumption (according to cash register or sales figures)
Shrinkage rate = (shrinkage / cost of goods sold) * 100
Is your shrinkage rate over 3%? Then you should urgently check what's going wrong. The DEHOGA states 3% as a standard industry guideline - it can be less for drinks.
To calculate the shrinkage correctly, you need:
- The actual stock movements (e.g. recorded with BarBrain)
- Sales figures from the cash register
- Additional recipes or portion sizes for meals
Example with beer bottles:
Opening stock: 140 bottles
Purchases: 460 bottles
Closing stock: 128 bottles
Sales according to cash register: 427 bottles
Actual consumption according to inventory (cost of goods sold): 140 + 460 - 128 = 472 bottles
Shrinkage: 427 (sold) - 472 (consumed) = -45 bottles
Shrinkage rate: (45 / 472) × 100 ≈ 9.5 %
A shrinkage of over 9% is well above the usual benchmark (approx. 3%) and should definitely be checked - possible causes: Breakage, theft, incorrect issue or incorrect bookings.
Shrinkage can only be detected with a combination of cash register data and precise stocktaking - particularly easy to measure in the case of bottled goods.
Fraction formula:
Breakage = value of damaged goods / cost of goods
Tip: Document breakage directly digitally - with tools like BarBrain you have the figures to hand at all times.
What insights does this bring you each month?
- Do you recognize trends - are losses increasing for certain products?
- You can adapt purchasing processes - if you plan better, you buy more cheaply.
- You protect yourself against additional payments in the event of tax audits - complete documentation is mandatory.
The tax office demands detailed records, especially during tax audits. Discrepancies in the use of goods or shrinkage quickly lead to expensive additional assessments.
Specific measures if shrinkage and breakage are too high
- Improve warehouse structure: Clear labeling and storage locations reduce errors.
- Train staff: Incorrect portioning costs money.
- Better security precautions: Video surveillance or double checks for expensive goods.
- Using digital tools: BarBrain makes the process faster, more accurate and delivers the data at the touch of a button.
Conclusion: monthly inventory = more profit and less hassle
If you consistently carry out your monthly stocktake, you not only have better control over the cost of goods, but also actively reduce shrinkage and breakage. You get real data on the performance of your business and can take targeted measures before losses escalate.
Tip: With BarBrain, you not only complete your monthly inventory faster, but also in a legally compliant and transparent manner - perfectly prepared for the next tax audit.
Book a demo now!
Do you want to improve your inventory? Then now is the time to book a no-obligation demo.
