You know how critical bar inventory control is if you run a bar, restaurant, or any establishment that serves alcohol. For many businesses in the hospitality field, beverages — alcoholic drinks in particular — account for a significant chunk of both revenues and costs.
That’s why having a solid handle on your bar inventory is a must.
You need to establish processes for taking stock of your liquor. Measuring and counting your inventory on a regular basis enables you to make smarter ordering and stock keeping decisions. As a result, you'll always have the right amount of beverages at the right time.
This, in turn, leads to happier patrons.
Proper bar inventory control also keeps your business healthy and in check. Most bars and restaurants are losing 20% of their bottom line due to over-pouring, spillage, and theft. With the right stock control solution in your bar, you can prevent and eliminate these issues. You can also maintain a healthy bank balance.
Let’s dive in!
What is bar inventory management?
Before diving into the nitty-gritty of stock counting, let’s establish some common definitions.
This term, also known as bar inventory control, refers to the processes and practices that you implement to stay on top of your bar’s stock. It involves tasks like tracking beverage sales, measuring liquor levels, and reconciling your inventory records.
Ultimately, the goal of bar inventory control is to achieve optimal stock levels, where you have the right amount of liquor at any given time.
This is important because having too much stock on hand ties up your capital and bar space. On the flip side, not having enough of the right beverages can diminish customer satisfaction.
As such, you need to strike the right balance in your bar, and having sound stock control practices will help you do that.
Bar Inventory Control Methods: 2 Ways Take Stock of Liquor
There are two common ways of taking stock of liquor in bars: there’s the traditional method which involves spreadsheets or a pen and sopaper, and then there’s the modern method that uses inventory software.
Let’s look at each of these methods in more detail below.
Traditional Bar Inventory Control
The traditional way of counting bar inventory involves manually recording inventory data into a spreadsheet, and then physically counting and measuring your bar’s stock.
Here’s how it works.
What you need:
- A note-taking device such as a pen and paper or an iPad/laptop if you want to digitize your notes
- A stock-taking spreadsheet with the following columns:
- Itemized list of beverages
- Beginning inventory
- Received inventory
- Current inventory
- Consumption (formula below)
Here’s what your spreadsheet might look like:
Step 1 - Enter Your Beginning Inventory
The first step in the inventory counting process is to determine your beginning inventory (sometimes referred to as your “starting inventory”) for each beverage.
Your beginning inventory pertains to how much alcohol you have in stock at the start of your inventory period. So, if you conduct your inventory counts every week, then your starting inventory would be how much stock you have at the start of the week.
Knowing your starting inventory will allow you to calculate the consumption of alcohol in your bar, which you’ll factor in when placing orders.
With the traditional method, you need to physically count the bottles you have in stock. You also need to visually assess the amount of alcohol that’s left in the partially consumed bottles. So if you started with a bottle of Jose Cuervo and it looks about half-full, then you’d count that as 0.5.
Step 2 - Enter the Received Inventory
You should take into account the liquor that you received during the inventory period. Going back to the Cuervo example, if you received 10 bottles within the current inventory period, you’ll need to enter that into the “Received Inventory” column.
Step 3 - Enter the Current Inventory
Next, fill out the “current” column, which is the amount of alcohol you currently have. Using the Cuervo example, let’s say you have 8.5 bottles left.
Step 4 - Calculate Your Consumption
The next step is determining how much alcohol was consumed within the current inventory period. To do this, use the formula:
Consumption = Beginning Inventory + Received Inventory - Current Inventory
Sticking with the Cuervo example, your consumption calculation would look like this:
0.5 + 10 - 8.5 = 2
Your consumption is 2 bottles, which means you’ve consumed 2 bottles of Jose Cuervo within your current inventory period.
Repeat the above steps for every bottle that you have until you’ve completed the entire location.
Step 5 - Review Your Data
Once you’ve filled out the spreadsheet, double-check everything (or have another person do it) to make sure that you’ve entered the info correctly.
Modern Bar Inventory Control
There are number of apps in the market (such as WISK) that enable you to measure and record your liquor levels using your mobile device. Some solutions even integrate with your bar scale and POS system, further eliminating manual work on your end.
All you have to do is scan the barcode of your products, enter the quantity, and the liquor inventory app will record and calculate the data for you.
What you need:
- Your mobile device with the bar management app installed
- A scale (optional)
Step 1 - Scan the Barcode
Take each bottle from the shelf and use your mobile device to scan the barcode of the product. If this doesn’t work, you’ll have the option to enter the beverage information yourself.
Step 2 - Enter Your Inventory Quantities
Just like with the traditional method, you’ll need to enter the beginning, received, and current inventory for each bottle. Doing this should be a straightforward task that involves adding the quantities into the app.
Solutions such as WISK even make this step easier by enabling you to connect the app to a Bluetooth scale, which can measure the exact quantity of each beverage. No need to visually estimate how much alcohol is left in the bottle — the app + scale can do it for you.
Step 3 - Let the App Do the Rest and Review the Info
Once you’ve finalized the information, your bar inventory app should be able to calculate consumption automatically. From there, it’s just a matter of reviewing the information to make sure everything is entered correctly.
Bar Stock Control: General Tips and Best Practices
If you made it this far, then you now have a solid understanding of how to count and measure your liquor levels.
Every business is different, so inventory control processes will vary from one bar to the next. However, there are some general best practices that you should consider to keep your processes tight and efficient.
Keep a Consistent Schedule
“Organization and consistency are vital in order to have a functioning bar inventory system,” says David Mitroff, Ph.D., a business consultant, author, and speaker who founded Piedmont Avenue Consulting, Inc.
“You need to be organized and consistent right from the time you place your order and till your actual inventory-taking process,” he adds.
For instance, if you decide to conduct bar stock-taking sessions every week, then schedule it on your calendar and stick to it.
Once you have a regular cadence for your inventory counts, it’ll be much easier to spot trends in stock movement, so you can get a clear picture of how alcohol levels fluctuate from one period to the next.
Established routines can also streamline your processes and improve productivity. This can help you and your team work more efficiently behind the counter.
Consider Conducting Inventory Counts Every Week
According to Mary King, a restaurant business analyst at FitSmallBusiness.com, “the simplest way to maintain your liquor supplies and inventory is to do a full inventory count every week.”
“Don't wait until the end of the month to check your physical counts,” she adds.
“It's easy if you split the inventory load between your closing manager and bartender Monday night and your opening bartender and manager Tuesday morning. The Monday night team should count the back storerooms and the Tuesday morning team should count the active stock behind the bar.
From there, it's easy to place your liquor orders on Tuesday afternoon so they arrive well ahead of the weekend which gives your team time to set aside wine and spirits for upcoming large parties, or batch cocktails for a busy weekend.”
King continues, “an added benefit of getting your bar-tending and management team in the habit of performing a weekly inventory is that your month-end inventories will be a breeze and you'll reduce opportunities for theft or shrinkage.”
Being “all over the place” is a cardinal sin when it comes to inventory counts. Make the process as efficient as possible by organizing how you count and measure alcohol in your bar.
This means determining where to start counting — and how to do it — before you pick up a single bottle.
For example, you could decide to start counting at the main bar, going from the top shelf to the bottom, and counting from left to right. When you’re done with that area, you can move on to the backroom.
It also helps to organize the items in your spreadsheet or app, so they coincide with how bottles are physically arranged in your bar. This will make the process go by a lot faster and minimize human error because you won’t have to jump from one row to the next when taking down inventory information.
Conduct the Count Outside of Business Hours
The last thing you want is to deal with product movement in the middle of your count. Prevent that by conducting your liquor stock-taking outside of your business hours. You can do it either before you open or after you close.
Make sure to budget enough time for the task. Depending on how large your catalog is, inventory counts can take anywhere from a few hours to half a day (or even an entire day). So, if you’re planning to conduct an inventory count, set aside the appropriate amount of time to do so.
Pay Attention to the Data
Regularly counting and measuring your stock will allow you to glean insights about your bar. Use that information to your advantage.
“For example, you might sell more tequila on Tuesdays with your taco special and red wine in the winter months. Use historical data compared to recent sales trajectories to forecast what your liquor sales will be. Then, program low-stock alerts in your POS system to notify you when on-hand quantities.”
Time to modernize stock counts in your bar?
Whew! We’ve covered a lot of ground in this post and for good reason. When it comes to liquor inventory control, stock counting is an absolute must.
As mentioned, you can choose to measure and count your products manually or use a bar manager app to do so.
Our advice? Go for the latter.
Using a modern solution in your bar streamlines the stock-counting process. This enables you and your team to focus on growing the business and keeping your customers happy. See your ROI grow as you master the art of liquor inventory control, achieving a well-balanced and lucrative bar operation.