Doing regular bar inventory is critical to running a successful beverage operation. And there are many ways to take inventory at your bar or restaurant. But what's the best way to take bar inventory? Whether you record counts into Excel spreadsheets or use a bar inventory mobile app, having frequent, accurate inventory is important. In this post, I'll compare the various tools that bars and restaurants use to perform inventory, from the old pencil and paper method to Excel to the range of mobile and cloud-based solutions out there.
Bar Inventory Overview
We'll start with the basics, why even do bar inventory? The obvious first answer is to make sure that you have enough products on hand for when your customers order them. But that's only the tip of the iceberg. Performing regular inventory helps with much more:
- Streamlines weekly ordering
- Provides critical financial information, both on what you have in stock and what you're selling through
- Tracks cost so your drinks are priced appropriately and you're achieving a desired profit margin
- Identifies slow-moving products that should be removed from your menu
- Gives information to help you negotiate better pricing with your alcohol distributors
- Measures loss from things like employee theft, overpours, etc... (shrinkage)
So to summarize, inventory isn't just about what you have on hand right now, it's also about how your inventory has changed over time.
Inventory change is another way of saying what's sold.
For most restaurants and bars, bar inventory management means performing a full inventory once per month is a good practice. Generally, the physical counts are done on the last day of the month. Many establishments will also perform partial weekly inventory counts of the most popular items as a way to aid in placing weekly orders.
In addition to tracking physical inventory counts with whatever tool you use, it's helpful to have other information entered as well. This includes who the vendor or distributor is and what your unit cost is.
If you have all your distributors listed with the products in one place, it makes it much easier to place regular orders. You have a single place to look up who the vendor is, which is impossible to remember for every product if you have hundreds of wines, beers and/or spirits in your inventory.
Knowing your costs helps you price your items correctly so that you are profitable, but also allows you to see how your costs are changing over time. Often times distributors increase prices with no notice, so it's important to track costs over time, not just when you first bought it. Otherwise you might have a price from five years ago that's actually much more expensive now and unknowingly hurting your bottom line.
Kicking it Old School - Paper and Pencil Inventory Style
Let's start with the traditional way of performing inventory, the tried and true method of using paper.
One thing is for sure, it's reliable. If your computer breaks or your internet goes down, you still always have your inventory sheets. But that's really where the advantages end because it is really hard to track a lot of data on paper.
It's especially difficult to compare inventory across different periods of time. It's also the slowest method, as you can be jumping around on the page to find your next item to count, or having to write in new products on the fly if they aren't added to your sheet yet.
Most Popular Choice - Inventory Spreadsheets
Over 90% of restaurant operators I speak with use spreadsheets for their inventory, most commonly in Microsoft Excel. In theory, Excel is so powerful that it can do pretty much anything an app can do.
But from working with hundreds of restaurant beverage programs, I've only ever come across one establishment that took full advantage of Excel's functionality. This functionality includes setting up templates with pre-built calculations for drink recipes and pour costs, formulas for calculating financial metrics, graphical reports, and macros. Learning how to execute all of this functionality in Excel isn't easy. In fact, you can spend hundreds of dollars on Excel classes to master the program.
So why do most establishments use spreadsheets?
The answer for many is that it's good enough. And it's cheap, or even free if your computer came with the program.
For many establishments, Excel does the trick when setup right. Some tips for doing inventory in Excel:
- You want to track inventory over time, so decide on a good method for doing regular inventory counts and stick with it. It's easiest if you store everything in one file, so consider having a different worksheet (tab) for each month's inventory. When it's time to do the next inventory count, duplicate your most recent month's worksheet and make any modifications as necessary.
- Consider having the first worksheet be a master list of all your items of which your monthly inventory worksheets pull from. On the master list don't only list the item, but list the distributor, most recent unit cost, and par level.
- It's helpful for both generating financial reports and for actually performing inventory counts if you create a scheme to categorize your products. That could be by wine/beer/spirit type, top shelf vs. well liquor, grape varietal, or any other that helps you.
- If you want your spreadsheet even more valuable, on the same or separate worksheet as your costs, put in your menu prices so you can automatically calculate pour costs and margins. Use your categorization to create pivot tables to summarize your costs and margins to get more in-depth insight.
- Backup your file, not just on your own computer, but also in the cloud. Use a service like Google Drive or Dropbox that automatically syncs and backs up your files so you don't even have to remember to do it yourself. This also makes it easy to share your inventory spreadsheet with other staff if needed. If the inventory lives on only a single computer and you're out sick one day or your computer crashes, your SOL.
Spreadsheets work great if you invest the time into setting them up, but they also come with their disadvantages.
For one, when doing inventory you have to carry a computer around with you. This makes performing inventory either a two person job or a very slow job for one person. Not to mention having to constantly find a place to balance the computer to type.
They also won't provide sophisticated or valuable reporting capabilities that give insight into the financial performance of your beverage program.
Wouldn't it be nice to quickly and easily see changes in inventory over time, see slow moving or dead stock, see where inventory is tied up and what you need to try to move, all at a glance?
And lastly, there's that problem where it tends to live on a single computer, where it works most of the time until the one time it doesn't.
Bar Inventory Apps and Other Inventory Tech Solutions
We'll dive into the various bar inventory competitors and alternatives, but first let's discuss why. Why use more complicated technology when you can use paper or a spreadsheet? When done well, using inventory software should achieve the following goals:
- It speeds up counting inventory. Performing regular physical inventory counts is long, tedious and mind-numbing. Doing inventory in a fraction of the time cuts labor costs, while staff that does the counting is a tiny bit happier.
- It better tracks your history over time. Spreadsheets are good for entering and storing data at a single point in time, but databases are much better for tracking products over time (not just counts, but also costs).
- It provides financial and operational intelligence to help you improve your beverage program. Sure, if you are an Excel Wizard you can program those things yourself, but often times inventory software will provide extensive reporting capabilities so you can quickly and easily evaluate the performance of your beverage program.
Here's a brief summary of alcoholic beverage inventory app competitors. By no means is this list meant to be exhaustive or provide all the information about each software platform or app, but it includes several of the most popular bar inventory apps.
Has been around since 2001 and was one of the first companies to use mobile handheld devices. The software largely depends on barcode scanning, which can be an issue for on premise establishments. Many on premise wines don't contain barcodes and frequently alcohol producers recycle the same UPC code for different vintages and package sizes, making them not unique. Otherwise the software is fairly full featured, especially for medium sized beverage programs.
Perhaps the first truly mobile inventory system for iOS devices, it's been around a number of years. It is very flexible for different types of establishments, but also requires a lot of data entry. It seems to have grown in complexity over time and probably isn't the friendliest user interface. It will be among the cheaper solutions however, but you sacrifice having any company or support backing it.
Focused mostly on high-end establishments with extensive wine lists, this is probably the most expensive solution on the market. It offers full capabilities for inventory, placing orders and reporting, but also has the same problem as Accubar in that it mostly relies on barcode scanning.
In my experience, barcodes slow down the inventory process instead of speeding them up. Also seems to be focused almost exclusively on wine and not the beer and spirits side of the business.
One of the newer crops of mobile apps that came about around 2013. With a slick interface for swiping between bottles and drawing a line on a bottle image to indicate the amount left in a bottle.
Some bars have complained that while the interface makes it quicker most of the time, it slows the inventory process dramatically some of the time when your products aren't in the expected order.
It's also lacking reporting capabilities relative to most other solutions. But a solid choice if you want a modern, user interface on mobile that generally speeds up your inventory.
BevSpot has raised a boatload of money (approximate $17 million in under a two year period) to create an inventory and ordering solution. BevSpot has a slick web interface for managing your inventory, but they don't over a native mobile apps for any device.
While most solutions integrate with POS systems, my understanding is BevSpot doesn't directly integrate for perpetual inventory and only lets you manually import your sales data into their system.
They are heavily focused on data and content, putting out reports of what their bar customers are selling in various cities around the country.
Possibly the newest entrant with very similar functionality to BevSpot. Bevager is priced similarly to BevSpot as well - expect to pay about $149/month for most functionality with both of these products.
Bevager handles inventory and ordering, reporting, and more in a modern interface, however it is possibly geared more towards accounting with integrations to packages like Quickbooks.
Bevager has a mobile app, but it doesn't offer a native experience, instead just displaying the website wrapped in an app.
The Backbar Difference
It's Free: The biggest point of difference between Backbar and other inventory software is that it is free. Being free gives all restaurants and bars an opportunity to improve their inventory operations regardless of the budget they have.
Native Mobile App: Unlike Bevspot and other inventory software, Backbar has a native mobile app for both iPhones and Androids, and is also available for tablets. The benefit of a true mobile app is the that it provides a great user experience by being designed for use on your device of choice. This helps save time on taking counts and gives you better access to inventory data.
Fast and Intuitive: Backbar's is really easy-to-use. For people who've used spreadsheets, Backbar will be familiar to them. Backbar is more fluid than Excel, it's like setting spreadsheets to hyperdrive.
Spreadsheet Import: A major consideration for restaurant operators when choosing a new inventory system is how easy is it to get setup? No one wants to spend hours and hours inputting information into new software. From working with restaurants, I know how busy beverage managers and GMs are, that's why we built Backbar to be as easy to set up as possible. Backbar let's new users upload their inventory spreadsheets right into the system so it's really easy to get started.
More than Inventory: Backbar does a lot more than just taking inventory. It helps you manage your entire beverage management workflow. From placing orders with vendors to reporting, users will simplify and save hours on beverage management. You can even provide tasting notes for menu items and alert your staff when a new product is added to your menu.
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