SOLUTIONS
MANAGEMENT
KNOWING YOUR
INVENTORY An inventory count is a key task that keeps the kitchen under control at all times and prevents waste. Kareem Haj Ibrahim, director of Kaza Consult, discusses the process and the benefits of knowing what’s in the stockroom.
Completing an adequate inventory count will greatly help you understand your kitchen and your menu. Conducting regular and timely checks also assists in the compilation of financial statements. An inventory count demonstrates the correct cost of goods sold (COGS) and highlights waste count. When using a proper inventory methodology, you can calculate the exact number of COGS and how much material you have in your storage. The formula for ascertaining the COGS percentage is: COGS (%) = ((beginning of inventory + purchased material) – end of inventory) / Sales. Effective and controlled inventory systems make it easier to evaluate your menu. They show what items have been moving and, more importantly, the demand of these items. Understanding this movement in your kitchen allows you to utilize materials better and where possible, know how to crossuse these products in your kitchen. It will also highlight items that are not in demand, saving you unnecessary costs. Unused items can easily be discontinued. Understanding the demand on the material you have allows you to enhance your cash flow. As we all try to avoid the frozen cash
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in the storage areas, it is essential that the inventory is carried out on a regular, periodic basis. This also helps you create a par level for your material. Knowing when demanded stock levels are low highlights the need to reorder to ensure that the item is present and available to meet demand. While many individuals rely solely on POS inventory count to calculate their numbers, the physical cross-check inventory must be completed in line with this to get actual and correct numbers to avoid stealing and waste. How it works While worthwhile, completing regular inventories can be time consuming, especially if the menu is large and varied, creating a lot of material in your storage area. In order to have the correct material in stock, our recommendation is to complete an inventory check on a regular basis. Logging items as soon as they are received and then documenting what is being used
saves a lot of time rather than doing it at the end of the month. In the event that errors occur in the deliveries, these can be rectified easily. Initially, the task may seem arduous, but it will become smoother and faster as time goes on. A suggestion is to have one person in charge of the inventory. This individual would be used to the unit of measurement and where things are located in the storage area. It is important that everything is double-checked by a manager to ensure accuracy. The manager should be aware of what is being purchased and check that the correct items are delivered. To conclude, an inventory count is fundamental in the effective running of your kitchen operation. Ensuring that the correct items are being both purchased and delivered to meet current demands makes for a very comprehensive and transparent kitchen. It eliminates waste items and also wasteful storage space within the kitchen. Financial records are clear and concise, which should make financial reporting less stressful. kazaconsult.com
