Bar Inventory Management Software Considerations and Best Practices

Systematic inventory management is an essential component of modern bar operations. 

It’s critical that operators keep track of what’s in store with so many different types of beers, wines, and liquors being sold. This information helps bars see what’s selling, what needs to be ordered, and what’s going missing.

Bar inventory best practices extend beyond simply knowing your bottle and can counts. Successful bar inventory tracks yield on all kegs and bottles based on serving sizes — a task easier said than done, especially without the right systems in place.

Read on to learn more about best practices for bar inventory and what to look for in your bar inventory system.

3 Bar inventory best practices

Managing a bar inventory can seem daunting, but it’s really no different than managing a kitchen inventory. 

Rather than factoring the burger yield from 5 lbs of ground beef, it’s calculating the pours yield on a bottle of wine or keg of beer. Sticking with this analogy, tracking burger buns is the same as tracking cans of beer or other single-serve items.

Track single use items and yield from bulk items levels up to actual vs theoretical analysis, waste reporting, and more — for kitchen as well as bar inventory. Here are a few bar inventory best practices to get you started:

1. Start with the basic — keeping count of bottles, cans, kegs, and other bulk products

Counts are an unavoidable part of inventory management. 

There are some automations that can be baked into your process, though nothing replaces hands-on product counts. This is especially true for bars where a can or two or six of beer is unaccounted for.

Even if you “know” your operation goes through three cases of chardonnay a week, counts are still critical to ensure that par level remains the same overtime — especially as consumer trends change.

Counts are also a great way to identify product surpluses that can be featured in specials to help boost their sales or simply get them off the shelf.

Finally, counts are essential for calculating Cost of Goods Sold, or COGS, which itself is critical for tracking bar profitability. 

2. Set serving amounts and track yield

After individual counts, it’s time to assign serving sizes for all of your products. This is how you can track actual vs theoretical yield and ensure the operation is maximizing the profitability of its COGS.

Theoretically, you should have defined portions/serving sizes for every ingredient used at the bar. Such precision makes it easy to forecast menu item profitability and track inventory yield. 

And aside from inventory, this level of precision makes for consistent pours, whether it’s a wine, a vodka soda, or a seven-step cocktail — consistency that patrons will appreciate.

We’re not saying to count every granule of salt that rims a margarita glass, though your margaritas should follow a standard recipe with defined parts for every ingredient. This way you know all the components that go into one margarita and can subtract that amount from each of the ingredients in your inventory,

It’s one thing to create these recipes and another thing entirely to get ALL of your bartenders to adopt them. Consider bringing your bartenders into the recipe design process to win their buy-in. And use your inventory yield tracking to see if any ingredients are getting a heavy pour.

3. Instill a process for recording spills, breaks, and comps

You’re operating a bar. Spills are going to happen. Broken bottles are going to happen. Compensation (comps) for regulars, VIPs, and mistakes are going to happen.

If you have tactics for reducing these events, by all means implement them. Getting your bartenders to track these events is even more important.

Imagine your shock when yields on your hoppiest bottled IPA plummet 40 percent from one week to the next. That’s going to jump out at you — assuming you’re tracking it. Any bar manager would rightfully dig into exactly what stole that yield. 

In this instance, let’s say some cases collapsed during unloading, and the brewery/distributor is making it right on the next order. No sweat. Obvious problem, simple solution. But what about all the smaller, incremental drops in yield that don’t jump off the page demanding further investigation?

Just like getting buy-in from your staff to stick to recipes, you need to implement a system your staff will use consistently to record spills, breaks, comps, and any other notable ingredient wastes. Simply recording these events and adding them to sales numbers allows for more accurate inventory and rectified yields.

What to look for in bar inventory management software

Modern bar inventory requires a modern solution. 

Spoiler alert: Your Excel inventory sheets are not a modern solution?

There are tons of considerations you can work through as you’re researching and implementing a bar inventory system. At the end of the day, it shouldn’t be an intensive process. 

You need an easy-to-use system that can record the invoice data from every supplier order. It should provide actionable reporting that ties together sales and inventory. And it should simplify counts, eliminating any guesswork and holding staff accountable.

Here are a few things to keep in mind as you explore bar inventory systems: 

What features are absolutely critical?

• Invoice automation: Automate invoice digitization, syncing accurately coded data from supplier invoices.

• Product catalog: Build a catalog of inventory products from your processed invoices.

• Par leveling: Define levels once then generate order guides based on par minus what’s in stock.

• Area setup: Create a helpful chart of which counts should happen within which inventory areas. 

• Count sheets: Generate an automated count sheet accounting for ever changing products.

• Inventory count prompts: Set the frequency and time of day and assign staff members to take inventory.

• Mobile apps: Recording inventory counts without Wi-Fi, such as when you’re deep inside the walk-in, and counts update automatically when the device syncs back up to the Wi-Fi.

• Purchase ordering: Schedule and send one-off and recurring orders directly to your suppliers.

• Reporting: Understand COGS, track waste, monitor AvT, variance, and depleting inventory.

Do you need separate systems for tracking bar inventory and restaurants? 

The proper inventory management system should work equally as well in your kitchen as it does behind the bar. 

It’s important your various inventory inputs level up to provide an overall look at profitability. Working within the same system takes the guesswork out of integrating different inventory reads. 

And it’s also helpful considering the share out of some ingredients from the kitchen to the inventory, such as citrus, syrups, and other such ingredients. 

How detailed do you want to get?

Anyone can create count sheets and print them out. Shared spreadsheets in the cloud could even allow for count comparisons and basic insights.

Actual analysis is much more in depth. It’s more than operators can achieve at scale within their spreadsheets. This is where detailed reporting from restaurant-specific inventory management tools can help.

Inventory management insights start with the basic counts. Then it levels up to ingredient costs and COGS. Yield unlocks waste tracking, actual vs theoretical analysis, and depleting inventory counts. Depleting inventory is about as in depth as it gets, aside from maybe scaling across locations.

Where to go from here?

If you’re looking to adopt bar inventory software, start with your point of sale system. Most restaurant POS systems contain at least some level of inventory tools. And then many integrate with more in depth inventory systems for that additional layer of insight.

If you’re keen to add inventory insights and your POS isn’t super compatible, it may be worthwhile to shop around and compare a few different bar POS systems.

Toast can be your one-stop shop for POS and inventory management. On the POS side, Toast quick to learn, even easier to use, and built to suit your specific needs. On the inventory side, xtraCHEF by Toast provides precise inventory and costing insights all rooted in a strong data foundation via invoice automation.

Learn more about both and get a double shot of inventory insights setup for your bar.