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Physical Inventory Control and Food Cost Percentage

Understanding how your inventory and food cost are related is exceptionally important. Today most large operations have the luxury of technology howev
Picture showing a computer with an inventory control system on the screen
© International Culinary Studio

Understanding how your inventory and food cost are related is exceptionally important. Today most large operations have the luxury of technology however smaller operations and those that have not adopted technology keep a ‘manual’ daily, weekly, or monthly food cost analysis. Many with technology also still do manual food stock takes of inventory each month to check their stock holding and food cost percentage to identify any variances.

Let’s explain how this can be done.

The formula works as follows:

Opening stock + purchases - closing stock = total food sales

A very simple spreadsheet can be drawn up in Excel (or manually) to calculate the daily, weekly, and monthly food cost:

Spreadsheet illustrating the previous formaula

If your food cost increases above the forecasted, desired food cost then you will soon become aware that you need to look at why there is a variance.

Reflection

How do you think inventory control could (or does) assist you managing costs in your restaurant? Please share this in the comments below.

© International Culinary Studio
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How to Manage Food Costing in the Catering and Restaurant Industry

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