Best Practices

 

F&B Physical Inventory Best Practices

                                                                                                                                                                   

 

 The following are our teams’ best practices for taking a F&B physical inventory gathered over hundreds of implementations.  Following these guidelines will ensure your team has the most successful time completing your inventory.

 

Foundational Decisions and Approach

Before you start your first physical inventory, your business needs to decide how to best handle the following:

 

●     Establish a culture of seriousness around physicals.  Even the smallest of establishments can have thousands of dollars in inventory.

●     Counting is ideally done in pairs - one person counting, one person writing/entering counts

●     Frequency – how often will you take inventory (weekly, monthly, quarterly) - weekly is recommended

●     Day of the week you will take inventory - pick the least stressful day, change as needed - consider deliveries, sales, etc.

●     Time of Day – It is recommended that you start after close of business or before open.

●     Time Deadline – Done between end of day and the start of the next business day

●     Establish your standard approach to Physical Inventory

○    Kick Off Meeting

○    Locations and Assignment

○    Shelf tags, product UPCs or count sheets via Apps or paper?

○    Problem Items – How to handle/notate, where do you take those items, who resolves?

●     Determine your Variance Thresholds

○    Depends on your ownership/accounting team

○    What is your budget of acceptable variance - 3%, 2%?

○    Does the time spent investigating a variance provide return?

●     To UPC or Not UPC – Will you add UPC codes to items and allow them to be scanned?

●     Handhelds or Apps – Get them.  1 Per Person.  They will justify their cost in 1 to 4 months

●     Auditing high value items between physical inventories

●     Reporting - What are the reports that need be generated after each physical

 

Physical Inventory Checklist:

·         We have included a Physical Inventory Checklist that we recommend be included in your process. Completing this checklist with every inventory, will guarantee your team has an efficient and productive inventory.

 

 

 

Physical Inventory Checklist

 

 

                                                                                                      Outlet(s)             _____________________________        Last Months Ending:                              __________

 

                                                                                                    Staff Member:     ____________________________         This Month Actual Revenue                    __________

 

                                                                                                                    This Month’s COGS Budget Amount/%    _______/___

                                                                                                   Physical EOM      _________________________            This Month’s Actual COGS Amount/%     ______/____

                                                                       

 

     Pre-Physical Checklist

1.              Set time to start physically counting outside of business hours
   

            o    Date: ________ Time: ________

1.             Confirmed all invoices/receipts entered in Yellow Dog (Committed)
   

1.            Confirmed AP has also entered all of these in AP (3-Way match of Vendor Invoice stapled to YD Invoice stapled to AP Invoice)
   

1.            All waste entered at least one day BEFORE your do physical
   

1.            Handheld prep
   

      o    Ensure units, and any backup batteries are fully charged

      o    If 520s, or Docked version is being used confirm pre count sync happened

1.              Paper Count Sheets printed and checked, all new items are included and in correct order. 
   

      o    Reporting Explained: All Items Not on any Count Sheet

1.              Printed negative on-hand report day BEFORE physical.  Resolve negatives before taking physical.
   

1.              Straighten up/tidy up inventory areas. Move product to where it should be.
   

 

Physical Checklist

1.           Setup problem item table (or process to deal with items that won’t scan)

1.           Printed Count Sheets, assigned to staff

1.           Assigned Data Collectors
   

 

Review of Physical (Before Committing)

1.           Print POS Sales Report for month to help audit

1.          Have last month’s ending inventory and this month’s budget COGS amounts to validate actual COGS for this month before committing.
2.         All counts added to Physical
   

1.         Sort by “Variance Cost (Descending), Item”, review and recount as needed

1.         Review and recount as needed all “zero counted” items
2.         Sort by “Variance Quantity, Item.  Review and fix any positives
   

1.       Once you’re within your threshold for COGS Variance, commit physical.

 

Post Physical Checklist

1.         Print Detailed by Select Physical Report

1.        Print COGS By Department Report

1.       Hand in this sheet (per outlet and the above 2 reports) to your supervisor