How often should you take inventory in the food service industry?

Stocktaking is often an unloved duty in the hospitality industry - but it is extremely important. Restaurants, bars and hotels invest up to 35% of their budget in goods such as food and beverages. Studies show that efficient inventory controls can save up to 20 % of these goods costs. At the same time, around 20% of turnover is lost every month in catering businesses due to shrinkage, theft or unintentional losses. The question of the optimal inventory frequency in the food service industry is therefore crucial: How often should inventory be taken in order to minimize losses and increase profits? In this article, you will learn in a practical way which stocktaking intervals make sense, what legal requirements there are, what business benefits more frequent stocktaking brings and how digital stocktaking planning with BarBrain can help you to plan and carry out stocktaking efficiently.

Statutory inventory obligation for restaurants

Before we get to the optimum frequency, it's worth taking a look at the legal requirements. Is there a stocktaking obligation in restaurants? In Germany, every commercial enterprise is required by law to carry out an inventory at least once a year - typically at the end of the financial year (usually December 31). This so-called annual inventory serves to fully record all assets and liabilities as of a reporting date. According to the German Commercial Code (§ 240 HGB), all companies required to keep accounts (i.e. merchants who keep books) must draw up a complete inventory.

However, there are exceptions for small businesses. Sole proprietors (sole traders) who have generated less than €600,000 turnover and less than €60,000 annual net profit in two consecutive years are exempt from the inventory requirement. Many small restaurants and bars are therefore not formally required to take an inventory. There are no special exemptions just for restaurants - the same thresholds apply as in other sectors. Nevertheless, even a small restaurant must take an inventory at least when starting or closing the business (and of course declare correct stocks for the tax return).

Legal conclusion: In most cases , an annual inventory is the legal minimum - especially larger restaurants, chains or anyone who prepares a balance sheet cannot avoid it. A single restaurant below the threshold values is not legally obliged to take an inventory, but here too, the complete stock should be recorded voluntarily at least once a year. After all, stocktaking is not just a compulsory exercise, but also offers tangible benefits for your own business, as we will see below.

Recommended inventory frequency in the food service industry

The statutory annual inventory is therefore the minimum requirement. But is once a year really enough? Practitioners and experts say: no. An annual inventory alone is usually not enough to keep the stock under control. Significant discrepancies can accumulate unnoticed between annual inventories - spoiled goods, theft, breakages or incorrect bookings. If these only become apparent at the end of the year, it is often too late to take countermeasures. It is therefore becoming increasingly accepted that regular stocktaking throughout the year is necessary in order to operate successfully.

How often does it make sense? Many experts recommend a monthly inventory in the hospitality industry. This allows you to keep a constant eye on the flow of goods and detect problems at an early stage. The following actually applies: "Monthly stocktaking is recommended for optimized cost management " - especially with higher-value stock, you can keep a handle on the throughput of goods and reduce shrinkage and theft. Monthly stocktaking therefore regularly provides reliable figures, for example to precisely calculate and control the cost of goods (consumption costs). Industry experts emphasize that monthly inventories are useful in the food service industry in order to obtain more reliable cost of sales figures and more meaningful cost management. In other words: If you record your inventory every month, you know more precisely what goods have actually been consumed and can adjust your calculations accordingly.

Of course, the optimum inventory frequency depends on the individual case. The size and type of business play a role: some restaurants carry out inventories weekly, others monthly or quarterly - what is important is a fixed rhythm that suits the business. Small bars with a manageable product range may be able to manage with quarterly inventories, while hotels with several outlets or large restaurants may carry out partial inventories every week (e.g. drinks weekly, food monthly). It is crucial that inventories are carried out regularly and according to plan. A fixed inventory plan - for example at the end of each month - creates commitment. Employees then know when to count and stock movements can be aligned with this.

Tip: You can reduce the workload by carrying out stocktaking on a piece-by-piece basis. For example, you can count a different storage area each week (week 1: drinks, week 2: freezers, etc.) so that everything has been recorded once at the end of the month. Such permanent inventory procedures are even permitted by law (§ 241 HGB) and spread the effort over the year. At the end of the year, all stock has already been counted at some point during the year and only differences need to be checked, which significantly reduces the stress of stocktaking.

In summary, an inventory should be carried out at least once a year (a legal requirement for many). However, more frequent stocktaking is better - ideally monthly, in order to maintain an overview at all times. In practice, catering businesses of all sizes do well by carrying out a stocktake at the end of the month (or regular stocktakes at short intervals) in order to keep their key figures under control.

Advantages of a regular warehouse inventory

But why all the effort? Regular stocktaking - whether monthly or at short intervals - brings numerous business benefits:

• Better cost control (use of goods): Frequent stocktaking means you know exactly how much merchandise has actually been consumed. You can calculate the cost of goods per period and compare it with sales. Deviations are immediately apparent. Without stocktaking, the cost of goods must be estimated, which is inaccurate. Regular stocktaking makes invisible costs visible. For example, you can recognize if the cost of goods suddenly increases and can take countermeasures. Consistent stocktaking can significantly reduce the ongoing cost of goods - studies speak of potential savings of up to 20 % through efficient inventory management.
  
  
• Detect shrinkage, theft and errors: Lost or stolen stock ("shrinkage") often remains undetected without an inventory. Regular counting acts like an early warning system. If, for example, expensive spirits are systematically missing or more meat is consumed than sold, you will see this promptly. You can identify the causes - be it theft, carelessness or booking errors - and take targeted countermeasures. Experience shows: Frequent stocktaking significantly reduces shrinkage because irregularities are quickly noticed and rectified. Employees are also more attentive as they know that stocks are constantly being checked.
  
  
• Optimized warehousing and orders: With up-to-date stock data, you can avoid overstocks and bottlenecks. You can recognize which products turn over quickly and which are slow sellers. This allows you to plan your purchasing better. For example, if you see every month that a certain wine is hardly being consumed, you can order less - conversely, you can keep more of a popular beer in stock. Targeted orders based on real consumption figures save money and storage space. Good inventory data can also be used to improve purchasing conditions: If you know exactly what you need, you can order larger quantities strategically or negotiate better with suppliers. In short: stocktaking creates transparency, which leads to more efficient merchandise management.
  
  
• Less spoilage and waste: Especially in the food service industry, food is at risk of spoiling if too much is stored. Regular stocktaking allows you to see in good time what is about to expire or what is in excess. This allows you to adapt menus (e.g. offer a dish as a daily recommendation to make use of surpluses) or pause orders. This reduces food waste and saves costs. At the same time, you ensure that fresh produce is always used - which also raises quality standards.
  
  
• Better preparation for audits: Having up-to-date stock lists at all times is a boon if a tax audit or audit is imminent. You can present all figures in full, which speeds up the audit. You also save yourself a lot of internal stress at the end of the year: If the figures have already been counted accurately throughout the year, only minimal adjustments need to be made for the annual inventory. The inventory is transformed from a major operation into a routine process. This also reduces stress for the team - stocktaking becomes the norm, not the "annual bugbear".
  
  

In short: regular stocktaking is a success factor. It increases profitability because costs are reduced and losses are stopped. It improves the basis for decision-making because all the figures from the warehouse are reliable. And it increases the professionalism of the business - both in the eyes of the tax authorities and among employees, who notice that there is a consistent system behind it.

Practical example: Monthly stocktaking reduces costs and shrinkage

A theoretical recommendation is one thing - but how does frequent stocktaking actually work in practice? Let's take a look at a fictitious example based on typical experiences from the catering industry:

The restaurant "Zum Genießer" had previously only carried out a large inventory once a year, on December 31. Each time, a considerable difference between actual and target goods worth several thousand euros were missing without it being clear when or why. The operators assumed that this was "normal shrinkage" and left it at that.

In 2024, the management decided to carry out a monthly inventory was introduced. After just the first month, the results were astonishing: in January, they inventoried the bar stock and discovered that 5 bottles of premium whisky more than were sold according to the cash register. Apparently, high-proof spirits had either been incorrectly booked by the staff or given away. The prompt discovery of this shortfall enabled immediate countermeasures to be taken - training of bar staff and stricter controls on serving and accounting.

In the kitchen warehouse, the February inventory revealed that some fresh ingredients were regularly purchased in excessive quantities. Some of these ended up in the bin unused. As a result, the head chef adjusted the ordering rhythm and reduced the quantities of perishable goods in stock.

After a few months tangible results: The average cost of goods ratio (cost of goods in relation to sales) fell from the original 30 % to 27 %. With a monthly turnover of €50,000, for example, this meant a saving of savings of € 1,500 per month. In addition, inventory differences (unexplained shrinkage) fell by around 50 % reduced. The team at "Zum Genießer" reports that processes have become smoother - they can always see what is in stock, which means that there are no sudden shortages or overstocks.

This example makes it clear: a monthly inventory may seem time-consuming, but it quickly pays for itself through lower costs and more control. What used to be a rude awakening at the end of the year is now recognized and corrected on an ongoing basis. Regular stocktaking therefore directly improves the profit situation and the operational efficiency of the catering business.

Digital inventory planning with BarBrain

Stocktaking takes time and effort - digital solutions can help enormously here. In particular, digital inventory planning and execution with modern tools makes frequent inventories practicable. One example of this is BarBrain, an inventory app specially developed for the hospitality industry. Digital inventory tools such as BarBrain offer several advantages:

• Efficient planning: Inventories can be planned and scheduled in the software. You define when and how often counts are carried out and the system reminds you and your team of the upcoming inventory dates. Checklists can be created for different storage areas. This digital organization simplifies inventory preparation considerably - no more paperwork.
  
  
• Time savings during implementation: BarBrain claims to reduce stocktaking time by more than half. Instead of going through shelves with a clipboard and pen, your employees use smartphones or tablets. For example, bottles and containers can be recorded by simply swiping on the touchscreen. Quantities and item numbers can be entered more quickly. Several people can take stock in parallel as a team, even simultaneously on different devices, which significantly reduces the overall time required. Such an accelerated inventory allows more frequent inventories to be carried out without paralyzing operations.
  
  
• Accuracy and fewer errors: Digital inventory systems eliminate many sources of error. Estimating and manual note-taking are no longer necessary - bottles or containers that have just been opened are recorded more precisely with BarBrain (using visual scales and therefore for weight and fill determination) instead of being roughly estimated. In addition, the data is stored directly in digital form so that transposed figures or transmission errors are avoided. BarBrain promises 100% reliable figures without estimation errors, as all entries are immediately and consistently entered into an inventory list. The evaluation takes place at the touch of a button, which eliminates human calculation errors.
  
  
• Automatic evaluation and integration: Modern inventory software can often be linked to the cash register system (POS). This means that sales are automatically deducted from stock. The software shows in real time what should still be there according to sales. You then only need to identify any discrepancies during stocktaking. In addition, reports and analyses can be created immediately: e.g. cost of goods sold report, shrinkage rate, stock value. Some systems also inform you automatically when stock levels are low or thresholds are exceeded. All of this is part of digital inventory planning - the system supports you in making decisions about when to reorder and where there are anomalies.
  
  
• Simple inventory management & cloud documentation: With a tool like BarBrain, all inventory data is in one place. Previous inventories can be easily compared (e.g. stock this month vs. last month). The data is stored securely and can be accessed from anywhere. This has additional advantages for chain stores or chains: All locations work with the same system, and the head office maintains an overview of the stocks of all stores in real time.
  
  

All in all, a digital solution like BarBrain makes stocktaking faster, more accurate and easier to plan. This lowers the inhibition threshold for carrying out inventories more often. Where you may have previously only counted quarterly due to time constraints, you can easily switch to monthly or even continuous stocktaking with digital helpers - to the benefit of the operating result.

Recommendations for inventory practice

Finally, some practical recommendations on how you can implement the optimum inventory frequency in your catering business:

1. Fulfill legal obligation: Make sure that you comply with the statutory annual inventory (usually on December 31 or at the end of your fiscal year). Even if you are under the inventory obligation limit, plan at least one annual full inventory to ensure that you have a clean financial statement.
   
   
2. Determine a suitable rhythm: Analyze your business and decide how often stocktaking is feasible. For most restaurants, a monthly inventory is realistic and recommended, as this provides reliable figures at the end of each month. Smaller businesses without a complex warehouse may be able to work with bimonthly or quarterly inventories - but more frequent is always better for cost control. Valuable goods (high-priced spirits, expensive meat cuts, etc.) should be counted more frequently. Find a schedule that suits your team and business.
   
   
3. Create fixed dates and routines: Set a fixed day for stocktaking (ideally the last day of the month). Communicate these dates to the team in good time, enter them in the calendar and note them accordingly in the duty roster. An inventory should be consistently adhered to like an important date. This way, it becomes part of regular operations. If possible, carry out the inventory outside of peak times to ensure peace and concentration and to focus on the guest.
   
   
4. Good preparation of the warehouse: order in the warehouse is essential to be able to count quickly. Sort goods by category (drinks, dry goods, cold storage, etc.). Put the same products together and clearly separate different batches. Spoiled or expired goods should be sorted out in advance. Ensure that all items are labeled. Such preparatory measures save a lot of time during stocktaking. Insider tip: Label the warehouse to make it even easier for employees.
   
   
5. Involve and train the team: Stocktaking is teamwork. Appoint a person responsible for stocktakingto coordinate the count. Train staff on how to count and record correctly. Assign everyone a clear task or zone (e.g. person A counts the bar, person B the kitchen). A well-coordinated team works faster and more accurately. Also make your employees aware of why stocktaking is important by sharing the results and the measures derived from them with them. This increases motivation and diligence.
   
   
6. Document and use the results: Record the inventory results in writing or digitally - preferably in a continuous inventory list. Analyze the figures after each inventory: What was the cost of goods? Were there any anomalies or shrinkage? Adjust your orders or processes based on this. Stocktaking without analysis is wasted potential - so draw conclusions from the data. The team should also receive feedback, e.g. "Shrinkage at the bar halved this month - good job!".
   
   
7. Use digital tools: Look into using stocktaking software or an app (such as BarBrain). Especially if you want to carry out inventories frequently (monthly or more often), a digital system pays off. It saves time, increases accuracy and makes the entire inventory planning process easier. From inventory preparation (checklists, reminders) to implementation (fast scanning/counting) and follow-up (automatic reports), good software supports the entire process. The initial costs or training are quickly offset by the time saved and better stock control.
   
   
8. Maintain consistency: Once you have established an inventory cycle, you should stick to it. It may be an adjustment at first, but with each repetition the process becomes more routine and faster. If things get tight in a month, you can do a partial inventory - but avoid long gaps. Regular stocktaking should become as natural as preparing the monthly accounts. Only then will you really reap the full benefits of continuous stock control.
   
   

Conclusion: Regular stocktaking as a success factor

To summarize: How often should an inventory be carried out in the food service industry? - Ideally, more frequently than required by law. At least once a year is a must (and is mandatory for most businesses). But if you only take stock once a year, you are wasting potential: monthly or regular stocktakes help to uncover hidden losses, reduce costs and keep stocks under control. Especially in an industry with tight margins, the right inventory frequency can provide a decisive competitive advantage.

Whether a small bistro, trendy bar or large restaurant chain - everyone can benefit from more frequent stocktaking. From a business management perspective, it pays off because you can save up to thousands of euros a year that would otherwise "disappear". Today, a high inventory frequency can be implemented in practice thanks to digital inventory planning and helpers such as BarBrain, which minimize the effort involved. This means that stocktaking no longer has to be an unloved feat of strength, but becomes a lean routine process with a big impact.

In the end, find the right stocktaking interval for your business - but tend to do it more frequently rather than too infrequently. The knowledge gained and the improved control over your warehouse will more than make up for the effort. A well-planned, regular inventory is not a necessary evil, but a key to success in the food service industry. Stocktaking is then no longer just a duty, it becomes an optional extra - with a noticeably positive impact on your results and operations.

‍