5 Reasons Why You Need to Upgrade From Your Inventory Management Excel Spreadsheet
What is Inventory Management?
Inventory includes the items that your company handles with the idea of selling. It might be raw materials that you buy and make something new, or it might be a bulk product that you break down into different parts and sell separately.
Inventory management helps companies understand what stock to order, how much of it to order, and when to order it. It's a business management system that tracks inventory, from purchase to sale. Restaurant inventory management responds to restaurant trends, marking items that are consumed daily, and making sure they're restocked before they run out and the customer has to be denied their order.
When it comes to restaurant inventory management, it contains all the items and raw materials required to make dishes. A restaurant inventory management system helps you to track each ingredient used in the recipe. When you integrate restaurant inventory management systems with the restaurant POS, you can control and organize all aspects of stock, maintain a smooth flow of supply. It also boosts overall profit.
What is an Inventory Excel Spreadsheet?
If you have inventory, regardless of how big or little your restaurant is, you must keep track of it. The best method to do this is with an inventory excel spreadsheet. An inventory excel spreadsheet, like a budget spreadsheet, keeps track of what things go out in a restaurant and what you need to buy to replenish your stock. An inventory spreadsheet can help you assess your current merchandising efforts and discover how customers interact with your business. An inventory spreadsheet also helps you discover where you need to improve. This saves you money by preventing you from wasting money on restaurant inventory that customers don't desire or missing sales due to out-of-stock items. Inventory spreadsheets help restaurant managers in keeping inventory organized and spotting any irregularities, such as when a particular ingredient is required but not in stock in the kitchen.
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How is Inventory Management Done on Excel?
When you are trying to keep a track of your stock and inventory, you create inventory spreadsheets. These sheets are-
1. Consumption report- This report helps you track the stock that comes in, the quantity, and the price at which it is bought. It should also include the amount returned to the main kitchen or the supplier for various reasons. In short, it contains a detailed report of all the items in your inventory.
2. Perpetual inventory form- In a restaurant, a perpetual inventory form updates the inventory accounts and the available stock after each purchase or sale. For this, you need to create a table or chart with 11 columns and rows as you have the brands of items. It gives a detailed view of inventory changes with immediate reporting of the quantity of inventory in stock. It gives the levels of goods right now.
3. Recipe costing card- A recipe costing card helps you cut daily costs at the restaurant. All the recipes for the dishes and bar drinks ( if any ) must be included in this card. It contains every detail of the item, ingredients that go into the dish, the quantity of each item to be used, and even things used for garnishing.
4. Expiry Report- The expiry report should contain the item code, name, quantity, unit, and amount. It should also mention the purchase date, manufacturing date, and date by which it should be consumed.
5.Waste Sheets- Waste includes dishes and drinks that are made wrongly by untrained staff. Waste sheet should contain all these detailed information. When you keep a track of what gets wasted, you will make sure there's a drop in waste along with a decrease in overall cost.
5 Drawbacks of Excel Inventory Spreadsheets
Excel is error-prone
Since data has to be keyed in every time, the main source of inaccuracy in the inventory spreadsheet comes from data entry. Hence restaurant stock can be easily miscoded and quantities can be entered incorrectly. Another source of inaccuracy in inventory management excel spreadsheets comes from the formulae that operate on data in the spreadsheet. Small mistakes in the formulae will create errors and can be difficult to notice.
No real time inventory data
An inventory management software helps keep inventory data updated in real time as the stock level changes now and then. But inventory management excel spreadsheet cannot provide details regarding how old the data is that you are viewing. Even with proper staff, a manual inventory system will never be up to date as an inventory management software.
No option of concurrent users
Some spreadsheets like Google Sheets support multiple users but Excel Inventory management spreadsheet lacks support for multiple users. Only one user can have the inventory spreadsheet open at one time. This wastes time increases error risk and hinders growth.
There's no way to find out who has entered and edited what information in an inventory Excel spreadsheet. This reduces accountability and makes it difficult to know who to check with when you have to clarify it.
Difficult to turn inventory data into business intelligence
Excel inventory management spreadsheet has a good toolkit for business statistics. But it lacks tools for Inventory Management. The major limitation of using excel for inventory analysis and forecasting is the lack of real time data. When your inventory information is not accurate, it becomes difficult to turn inventory data into business intelligence.
Why Inventory Management Software Scores
A successful business is like a well-oiled machine. But to reach that target, the machine must be cared properly. Inventory management is the oil that runs the business smoothly. For most businesses, inventory management software becomes the gold standard for inventory tracking and business insights.
Inventory management consists of various processes. When you do these tasks manually, there are chances for errors like data duplicity. Once you implement inventory management software, it automates all the data recording and other tracking processes.
Better productivity through analytics
Reports and analytics give you a picture of which items are selling quickly through various business channels. It can be done through inventory management software. This helps you to make better business decisions.
With the help of inventory management software, you can avoid deadstock and overstock situations. Inefficient inventory management can lead to revenue loss, overspending money, and so on. When you streamline your inventory management, it eliminates stock expenses associated with human mistakes and earns profit by further cost savings.
Key Statistics of Inventory Management Software:
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3 Top Inventory Management Software Solutions for Restaurants
Zip Inventory from Hubworks is one of the Best Inventory management software for restaurants that helps track and monitor your inventory. One of the main features of Zip Inventory is its integration with the POS system. When things are sold, the transaction records are stored in the POS system. This data is then transferred to an inventory management software like Zip Inventory. Zip Inventory also has a recipe feature that helps you understand how many ingredients go into each menu and with some simple maths, get an estimate of how much stock you should have left. Zip Inventory has two pricing options- Standard & Professional. They are priced at $125 and $175 per location per month, respectively.
Market Man is a cloud-based inventory management software for restaurants. Its features include physical counting, budgeting, order optimization, food costing, and vendor management. It also supports streamlined ordering via email with support from the administration team to process invoices. It also integrates with various POS systems. It has three plans- Operator priced at $127 ( includes 20 invoice scans), Professional at $169 ( includes recipe costing, reporting tools, and 50 invoice scans, and Ultimate at $339 ( includes two vendor integrations and 300 invoice scans)
xtraChef by Toast is a cloud-based restaurant inventory software. It integrates directly with Toast POS. Another feature of xtraChef is its On The House subscription format. In this free tier, you can get access to vendor and purchase Order Management and invoice uploads. It also has EDI connections to vendor ordering and payment portals as well as scan-to-enter invoices. Apart from the On The House subscription, it also provides Starter and Che's choice, where both are custom quoted.
Inventory Software FAQs
What is the difference between inventory management optimization and inventory management software?
Inventory management means the business process responsible for ordering, storing, managing, and moving inventory. Inventory management software tracks the flow of goods from suppliers to the store/kitchen and the relevant sales channels. But inventory optimization is the art of balancing high service levels with the lowest possible inventory investment. It helps businesses to ensure product availability while reducing inventory costs and lowering the risk of excess stock.
How does inventory management software help the restaurant business?
Restaurant inventory management involves keeping a track of raw and processed goods to plan purchases, understand food costs, and avoid material wastage. Through Demand Planning, you can forecast or predict the demand for products to ensure they can be delivered and satisfy the customers. Some restaurants still use the inventory excel spreadsheet method, while others have upgraded to inventory management software like Zip Inventory, which is easy to sign up for.
Will I get an error notification if the inventory count doesn't match with the estimated counts?
Yes. Inventory management software like Zip Inventory can notify you if the inventory count and estimated count don't match. It then sends a notification stating that there is an error. Once the difference is registered, you can address it quickly on a printed piece of paper.
Can I track the inventory in multiple locations?
Yes. It is possible through inventory software like Zip Inventory. Besides tracking, it also notifies if there is any disruption in the Supply Chain so that you can resolve the problem fast.