Last Updated:
October 21, 2022

15 common problems your bar inventory management process – and how to fix them.

Get insights about why your inventory management process may be flawed and how to improve it.
15 common problems your bar inventory management process – and how to fix them.
By
Angelo Esposito
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Table of Contents

Bar inventory management is far from an easy process. As a bar manager or restaurant manager, you know that if you have 99 problems, inventory is 98 of them. What makes it even more difficult is the fact that there are dozens of methods, tools, and strategies out there all claiming to be the best.

When choosing the best inventory method for you and your bar, it’s crucial to consider your specific needs to ensure enough accurate information for the survival and success of your business.

This list will help identify what you’re currently doing wrong in your chosen bar inventory process, along with easy-to-follow steps to improve. So, let’s get started!

First, what does bar inventory mean?

Bar inventory is the process of counting all the alcohol in a bar or restaurant in order to stay organized and profitable. At its most basic level, conducting inventory ensures that you always have enough stock to serve your customers.

The process is usually conducted with a bar inventory spreadsheet, app, or good old-fashioned pen and paper. Bar managers take inventory on a weekly, bi-weekly, or monthly basis, depending on the volume of products they have and how busy they are.

However, counting stock is only the beginning.

What is the importance of bar inventory management?

When done well, inventory goes way beyond having enough products to serve your customers. It also helps you make informed business decisions by providing you with critical information such as:

  • How your bar is performing financially
  • What is your product variance is
  • Whether you have dead stock (and how to reduce it!)
  • When shrinkage or spillage might be occurring
  • How to set pars and pour costs for each product
  • Which products sell well and which don’t

With all this data and insight, bar managers can restructure menus, set better prices, use the most cost-efficient brands in mixed drinks, create profitable promotions, plan for the future, and more. In one sentence, liquor inventory management is essential because it is your business's money tied up in your stock.

15 Bar Inventory Management Mistakes (And What To Do About Them)

Now that we’re on the same page about the importance of doing inventory, we’ll dive into the most common mistakes bars and restaurants make during the process. We’ll also provide some solutions so you can avoid these inventory pitfalls in the future.

1. Not doing inventory at all

We shouldn’t need to explain this one! Overall, if you’re not taking proper inventory management process yet, you’re putting both your business and time in jeopardy.

Without consistent inventory management, it’s impossible to know what’s happening in your bar. You won’t be able to track usage, trends, or profitability accurately. The solution? Set a schedule for taking inventory and stick to it. It could be daily, weekly or bi-weekly, or even on a monthly basis. Even though liquor inventory is time-consuming, it will ultimately save you tons of time and money in the long run. Best of all, there’s no need for any more inventory-induced headaches.

2. Choosing the wrong inventory system

Depending on the inventory system you have in place, you could be putting your establishment at a great disadvantage. Take your bar’s needs into account when deciding how often to do inventory, and whether you will use a manual bar inventory form or automated software. Also, consider how many employees will be involved. Most importantly, go with a bar inventory management system that will allow for the greatest accuracy without straining resources.

There are tons of bar inventory software, however, it is necessary to find the one that caters to your specific business. Find an all-in-one solution that will save money and time in the long run.

3. Being disorganized

Many businesses overlook the importance of inventory management, leading to bar owners trying to keep track of everything in their heads- which is often unreliable. Disorganized bar inventory management can do more harm than no inventory management at all.

If you want to be a successful bar and restaurant, it is important to have a clear understanding of what liquor you have on hand, and how much of each product you need in order to maintain profitable operations in the same way.

In addition, a well-organized storage room, for example, can prevent baristas from losing track of bottles and wasting time searching for misplaced items. Other standard systems that should be put into place include:

-Checklists for what needs to be counted for your bar

-A schedule for when to take inventory

-Assigned the same person or hire an inventory manager

-An inventory process for recording and storing data

Once you’ve picked the inventory system that works best for you, stick to it. Make a schedule, assign responsibilities, and then stick to them.

4. Going tech-free

Sure, inventory process can be done without a sophisticated liquor inventory app. But, can it truly be done in the most effective way? The best thing to do for your beverage inventory is to consider switching from pen and paper, calculators, and spreadsheets to a liquor scale app. You’ll be able to significantly cut down on time, human error, and all of the other things that could go wrong when doing inventory manually.

It is important to be as efficient as possible with your time when taking inventory for your bar. Automated software will give you the ability to do that. In addition, it will provide more accurate numbers than if you were to try and do inventory by hand.

5. Under or over involving staff

To improve operations, find the middle ground between putting the full responsibility of inventory on one person’s shoulders and putting too many cooks in the kitchen. What you want to do to avoid this mistake is to involve more than one employee in the inventory process. Having more than one set of eyes to manage your inventory counts will ensure accuracy and fewer errors. However, make sure not to overcomplicate things by involving more than five employees at a time. Having 2-3 employees on inventory is more than ideal for getting the job done.

6. Allowing stock to go to waste

This one should be fairly self-explanatory. Waste = unhappy customers and an unhappy wallet. In order to reduce waste, slow-moving stock, and dead stock, you must stop yourself from purchasing too much stock. By tracking inventory correctly, you can determine the exact number of bottles you’ll need to please your customers.

For the best results, we recommend using liquor inventory software as it will help you determine your par level. Consequently, you’ll be able to ensure that nothing is wasted or left sitting on the shelf.

7. Failing to plan ahead

Forecasting when you’ll need additional supplies and when you won’t help avoid dead stock, control waste, and running out of the popular cocktail menu for your bar. When you manage a bar or restaurant, it’s crucial to plan ahead for your bar inventory in order to avoid any costly surprises. For example, setting a minimum amount for each type of drink to ensure that you always have enough on hand and in the same way, increase your sales.

Making decisions blindly and without a real plan will not help you increase your bottom line. With the right data, provided by a bar inventory management system, you’ll be able to make strategic decisions when placing orders.

8. Opting out of automation

Does forecasting sales or correcting these other mistakes sound difficult or downright impossible? If so, refusing automation is certainly not the answer. Instead, consider automating as much of your inventory as possible with a single app. Automated systems are created to do work for you that you would otherwise have to do manually. This system can help when taking inventory with things such as placing purchase orders, inventory counts, and pricing products.

9. Not optimizing recipes

When was the last time you updated your cocktail menu? If it’s been longer than six months, you may be missing out on potential profits. While your bar might have long-standing fan favorites, it’s a mistake to keep your menu and prices the same year after year.

Did you know that the average cocktail has six ingredients? If you’re not careful, those six ingredients can cost you a lot of money – money that could be going straight into your pocket. When updating menus, consider using lower-cost alternatives for high-end ingredients to optimize your recipes, and control costs to save money. For example, if a recipe calls for champagne, you could use prosecco instead.

You should also take a close look at your most popular cocktails and make sure that they are priced correctly. Are you making as much profit off of them as you could be? If not, it may be time to adjust the recipe or the price. Your cocktail menu should be up to date at least seasonally, if not monthly, to reflect what’s popular now. In addition, your prices should be updated regularly to maximize profits for all goods sold. If you don’t want to update your cocktail menu too often, consider running specials or offering new drinks as a way to mix things up without overhauling your whole menu.

Remember: Updating your prices keeps you profitable, while new menu items bring customers back for more. Don’t be afraid to switch the type of alcohol you use in your mixed drinks and cocktails. Different brands might offer discounts or just make more sense overall. It’s no secret that finding areas where you can control costs provides huge benefits.

10. Falling behind on industry trends

If you want your bar to be successful, you can’t afford to fall behind on industry trends. What was popular last year might not be so popular this year, and vice versa. Staying ahead of the curve ensures that your customers will always have something new and exciting to try when they visit your establishment.

One way to stay on top of trends is to regularly attend trade shows and events. Another is to keep an eye on what other bars and restaurants are doing. If you see something that interests you, talk to the owner or manager and find out more about it. You can also follow bartenders, mixologists, and other industry leaders on social media to get inspiration for new drinks and cocktail menu items.

11. Ignoring holidays

Never and we mean never disregard the financial importance of holidays for your bar or restaurant. This includes the big ones like offering a deal on beer for St. Patrick’s Day or one on champagne for New Years’ Eve. Even the smaller ones shouldn’t be forgotten as they can really get customers in search of deals, always coming in. In addition, all of the “national” days on social media (e.g. #NationalTequilaDay) might seem made up but they represent real opportunities to boost profits through promotions and events.

12. Forgetting the customer

Never forget that your customers are the lifeblood of your sales business. Without them, you wouldn’t be in business for very long. As such, it’s important to always focus on providing a great customer experience. This includes everything from the moment they walk in the door to the moment they leave.

Make sure that your staff is friendly and attentive and that your guests feel welcome from the moment they arrive. If there’s a problem, do whatever you can to fix it quickly and efficiently. Showing your customers that you care about their experience will keep them coming back again and again.

Everything you do as a bar owner or restaurant manager revolves around making your customers happy. Forgetting or failing to take their feedback into account will have a negative effect on your inventory and overall business success.

13. Collecting data, but not putting it to use

As a business owner, you likely collect a lot of data on your customers, including their contact information, purchase history, and preferences. And by all means, you may be doing all of the technical parts of inventory from counting stock to calculating usage and weighing all of your products.

But what are you doing with all of that data? If you’re not using it to improve your business, then it’s not doing you any good and you could be missing out on many sales opportunities.

Use customer data to see what's in demand and increase the stock of those items. Also, set up promotions for these things. Your customer data can be used in more ways than one! For example, you can use it to create targeted marketing campaigns or send out personalized coupons and discounts. You can also use it to improve your product selection or better understand your target market. No matter how you use it, make sure that your customer data is working for you and not just collecting dust in a database somewhere.

14. Failing to set inventory goals

Without established goals in your bar inventory, it is difficult to chart a course for success. Whether it is to minimize shrinkage, control wastage, improve profit margins, identify theft, or all of the above, you must be clear on what you want to get out of doing inventory in order to achieve it.

Keep in mind that you should have specific, measurable, achievable, relevant, and time-specific goals (SMART). This will assist guarantee that your objectives are realistic and that you can actually achieve them to help you earn the most money.

If you’re struggling to come up with attainable goals to maximize profits for your bar, it might be helpful to look at what others are doing and try to emulate their successes. Do some research and find out what works well for other bars and see if you can adapt those ideas to fit your own needs.

15. Poor vendor relationships

If you want to run a successful bar or restaurant, you need to have good relationships with your vendors. After all, they are the ones supplying you with all of the products that you need to keep your business running.

Neglecting or mistreating your vendors will only lead to problems down the road. Make sure that you treat them fairly and with respect. Pay them on time and don’t try to haggle over prices too much. If you have a good relationship with your vendors, they will be more likely to work with you if there are ever any issues with your order. They may even give you a better deal on supplies from time to time.

Investing in good vendor relationships is an important part of running a successful bar or restaurant, so don’t take it lightly.

How to fix bar inventory problems: Tips, Tricks & Tactics to Better Manage your Liquor Inventory System

We all know that in the restaurant industry, it’s not enough to simply avoid mistakes. You have to go above and beyond to be successful. We’ve got your back there, too. These bar inventory management best practices will take your bar to the next level.

Know your ABCs

When it comes to managing the beverage inventory process, you need to know your ABCs: always be counting. This means that you should always have same person counting your inventory, whether it is yourself, an employee, or a third-party service.

Although it may be tedious, taking inventory is a crucial step to maintaining accuracy within your bar. Without regular inventory counts, you put yourself at risk for shortages or extras that could damage your company.

Monitor the sales of different alcohol brands

In order to make data-driven decisions as a bar manager about what to stock on your shelves, you need to know which alcohol brands are selling and which ones are collecting dust within a time frame. You should pay attention to the most popular ones and the slow-movers. Make a list and get rid of the unpopular brands by offering discounts and replacing them with more profitable brands.

If you use bar inventory software, you can run reports that show you which items are selling and which ones aren’t. Take inventory regularly to keep track of your inventory levels and sales. This will help you stay organized and efficient in running your business. You can learn a lot about people's preferences and buying behavior by studying their alcohol consumption. By paying attention to which alcoholic drinks are selling more than others, you can make better choices about what beverages to keep stocked in your bar.

Control waste at the front bar by training bartender

Pour cost is a crucial performance indicator in determining bar profitability, as well as identifying operational inefficiencies. The ingredient cost of a drink divided by the sales price is its pour cost. It's important to grasp these numbers since overpouring is one of the most common causes of waste at bars. This happens when bartenders are not correctly trained on how to pour drinks or try to upsell clients.

Avoiding waste like this comes down to training your bartenders in proper pouring techniques. The use of tools like jiggers and measured pourers will produce the best results, but it's also important that they understand your policy on upselling. This way they can avoid overserving customers.

Set PAR levels

PAR levels are an efficient way to order liquor for your business so that you don't keep too much stock or run out of what you need. This will help you avoid overages and shortages, which can be costly for your bar business.

When you've determined your PAR levels, keep an eye on your inventory on a regular basis and place orders when you approach the reorder point. After you have this information, you may make liquor purchases according to your needs and refill your shelves before they are completely empty. Using par level as a key performance indicator might assist you in keeping track of your inventory levels.

One of the best ways to keep track of your PAR level and reorder points is using inventory management software that can use historical trends and forecasting to help calculate them

Taking inventory while your bar or restaurant is closed

The best time to take your ending inventory is when your bar or restaurant is closed. In the same way, you can avoid interrupting the flow of business and disturbing customers. Plus, taking inventory while your establishment is closed gives you a chance to really focus on counting accurately. When you’re trying to do it during business hours, it can be easy to get distracted and make mistakes.

It is best to schedule your bar inventory for early in the morning or late at night when fewer people are likely to interrupt you. This will help minimize discrepancies and restart by avoiding changes to inventory levels while you are counting.

Rotate your stock

In your storage room, you should have a system in place for how you organize your liquor bottles. This will help you keep track of your inventory levels on what you have and where it is.

One way to do this is to use the FIFO method, which stands for “first in, first out.” This means that you should use the liquor that has been sitting in your storage room the longest first, and then move on to the newer bottles.

This system helps to ensure that your liquor is fresh and less likely to go bad. It also helps you avoid waste because you are more likely to use the liquor before it expires.

Create a supportive and positive work environment

Happy employees mean happy customers. That being said, ensuring your employees enjoy coming to work every day will not only make everyone’s lives better but will also be good news for your bottom line.

It’s important to create a work environment that is supportive and positive. This will help reduce turnover and keep your bar staffed with experienced employees.

There are a few things you can do to create this type of environment, such as providing training and development opportunities, offering competitive salaries and benefits, and showing appreciation for your employees’ hard work. Investing in your staff will help you reduce turnover and keep your bar running smoothly in the most effective way.

Analyze trends and reasons for inventory fluctuations

If you want to really understand your beverage inventory, you need to take a closer look at the trends and fluctuations. This means analyzing why certain bottles are being used more than others and what might be causing sudden changes in your inventory levels.

Understanding the trends can make changes to your ordering and stocking procedures. For example, if you notice that a certain type of liquor is being used more often during the summer months, you can make sure to stock up on it before peak season.

Similarly, if you see that your inventory levels are consistently low on a particular item, you might need to reevaluate your pricing or promotions.

This is to identify issues and opportunities that might otherwise go unnoticed. We talked about this among common mistakes but it’s worth mentioning again. Overall, the inventory management process provides a huge amount of data about the health of your stock room and your business as a whole.

Monitor KPIs (Key Performance Indicators)

Ideally, your liquor inventory key performance indicators (KPIs) are numbers that let you track progress and know whether you're meeting your goals.

KPIs offer you total transparency into every corner of your bar business so that you can hit (and exceed) all of your goals. Track your bar's progress and find ways to improve with the help of a bar inventory management system like Wisk. With this data, it can help you analyze your bar profit margins and compare past performances and make changes accordingly. 

That’s Where Bar Inventory Software Comes In...

What will really take your bar or restaurant inventory process to the next level, though, is investing in proficient bar inventory software. The software helps address common mistakes by cutting down on errors, automating processes, and, most importantly, providing critical insights into how your business can improve.

With the data and smart technology that software provides, the inventory process not only becomes easier but becomes more valuable to your business.

Why Choose our Beverage Inventory App

Out of the many bar and restaurant management software options available on the market, you need to find the one that it's worth investing your money in to help your bar improve its bottom line.

From counting inventory to automating ordering and optimizing pricing, WISK has the tools you need to generate the best results for your business. With our software, you won’t have to worry about lengthy, manual inventory sessions or making mistakes again. In fact, you can cut your inventory time by up to 80 percent to free up your schedule for the more important things. Visit https://wisk.ai/bar-restaurant-inventory-software/ to learn more.

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