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Bar Inventory: How to Do Inventory

November 22, 2019
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BinWise Staff
Bar inventory management software

How much liquor did your bar use last month?

In order to ensure your bar’s success, managing your bar inventory regularly and accurately is key. Not keeping track of what you have in stock and what you sold will prevent you from making smart decisions. That will only hurt your bar’s profitability.

We'll walk you through how to do liq

How much liquor did your bar use last month?

In order to ensure your bar’s success, managing your bar inventory regularly and accurately is key. Not keeping track of what you have in stock and what you sold will prevent you from making smart decisions. That will only hurt your bar’s profitability.

We'll walk you through how to do liquor inventory using a spreadsheet or app. We'll cover everything from counting your wine bottles and beer cans at the bar to measuring beer kegs and cases in the stock room.

Bar Inventory: Why It Is Important

Everything you do in a bar revolves around tracking and controlling inventory. Low inventory levels can lead to missing out on sales and create unhappy customers. High inventory levels require more storage space and can lead to waste like expired goods. All of these problems eat into your bottom line and keep your bar from being as profitable as possible.

Bar Inventory: Basics & Overview 

In the most basic sense, bar inventory is the count of product and materials you have on hand. In reality, it involves a bit more. Counting your bar inventory requires time, focus, and an attention to detail that many bar owners find difficult and tedious. Every item must be accounted for both at the beginning and ending of the time period being measured. Inventory purchased during the time must also be considered.

How to Take Inventory: Step-by-step Guide

Taking inventory can be confusing and tedious. Here are the steps you should take to make it easier on you:

  1. Start with the front bar. Then slowly make your way to the back bar and cellar or stock room.
  2. Write down all your products in a spreadsheet in the order that they are organized at your bar. This will help save time and avoid confusion as you start counting and going through each of them.
  3. Inspect bottle levels and waste around the bar. Count full bottles and partially-used bottles as outlined below for a more accurate count.
  4. Simply repeat this process for every bottle, can, and ingredient in the bar. This includes spirits, wine, beer, etc.
Bottles of liquor being systematically counted during bar inventory

Make sure these steps are on your bartender duties checklist, so they aren't overlooked. It is important to keep an eye out for spillage and breakage. Take note of it whenever you see it so you can avoid compromising your usage numbers. Add cleaning to your opening and closing checklist to limit these findings during inventory.

Perpetual vs. Physical Inventory

Perpetual inventory is a real-time, continuous count of inventory while physical inventory is a manual and periodic count. Both inventory methods have pros and cons. Deciding which to use depends on your individual business needs and capabilities.

Perpetual inventory relies on technology and integration into a bar pos system. It tracks all sales and orders and gives you accurate reports whenever you need them. However, it requires an investment in technology, training on how to use the tools, and often has a long and intense setup period.

Physical inventory does not rely on technology, but it can be used to speed up the process and keep track. There is no investment required for physical inventory and it is the most common method. However, it takes much longer to count inventory as you'll manually do it at least twice a month. It is also more susceptible to mistakes since human error is involved.

Opening Inventory or Starting Bar Inventory

Opening or starting inventory is the first count you take at the start of the time period you're measuring. It consists of all remaining inventory from the previous time period. Usually, your bar will take opening inventory on the first day of the month. It will set the standard for your bar's performance and is an important measure for cost analysis.

How to Count Liquor Bottles

Bottle of liquor divided into 10 parts; using the rule of tenths for liquor inventory

Inspect each bottle to see how much liquid is left inside. We recommend dividing the bottle into ten parts. Then round up to the nearest tenth. For example, if your bottle is halfway full, round it up to either 0.5 or 50% full. For cans and full bottles, count them as single units. This will give you a much more accurate inventory count and help keep you from overestimating your remaining bottles.

Ending Inventory

Ending inventory is the final count of your inventory during the time period you're measuring. Your bar will likely do this count on the final day of the month. In conjunction with the starting inventory count and any purchased inventory, this will determine your usage over the given time period.

Take Inventory: Using Bar Inventory Spreadsheet Template

Start by creating a blank spreadsheet with the following columns:

You can download this free bar inventory spreadsheet that we have put together for your convenience. You should also put this in your bar operations manual to ensure the task gets done regardless of staffing changes.

Use this list for the front bar, back bar, wine cellar, stock room, and any other locations where you store your alcohol. Make sure to either create a separate column or note which storage area that you are taking inventory in your spreadsheet to avoid confusion. A good bar manager makes sure each area of the bar is accounted for.

If you sell wine by the bottle, count the full bottles and combine them with cases for quicker inventory. If you sell wine by the glass, it is best to use the dividing-into-ten-parts method that we previously mentioned. Once you have counted all your products, you can add up the totals from each storage area to calculate total inventory.

When you take a second inventory, whether in a week, two weeks, or a month, simply repeat those steps. Just use a new spreadsheet. Include a second inventory in your bar management guide to help lower losses and find issues more quickly.

Keep in mind that consistency is key in taking inventory. Let's say you take your inventory from front to back, left to right. Make sure to repeat that same beverage order when you take your next inventory.

We recommend doing inventory every week for the most accurate numbers. Whatever you do, try not to go a month without taking liquor inventory. Add inventory to your list of bar manager duties to ensure it gets done regularly.

Make sure to keep track of products that you receive from your distributors in between inventory periods. That will be necessary when you need to figure out your bar’s inventory usage later on. For a full step-by-step of calculating inventory usage with detailed examples, check out our blog post about how to calculate inventory usage.

bar inventory management ebook from BinWise

Take Inventory: Using Bar Inventory App

Bars and restaurants can take inventory quickly using bar inventory software and apps.

On top of that, any mistakes made during the manual counting and recording process can result in serious financial consequences. We recommend seeking out a wine cellar app and liquor inventory system like BinWise Pro. It can help automate and speed up the inventory process, while eliminating counting errors.

While the process might seem like a simple task with only adding and subtracting numbers, taking bar inventory manually takes a lot of time. Time that can be spent doing other things to improve your business, especially if you have a large selection on offer.

How to Manage a Bar Inventory

Managing a bar inventory can be complicated and overwhelming, but it doesn't have to be. The key is to make the time to accurately count your inventory and train your staff to help. This will speed the process up and give you greater insight into your inventory. You can also invest in a platform like BinWise to take the guesswork out and let you focus on increasing profits.

Beverage inventory software

And That’s How to Take Inventory!

Contact us to learn more about how BinWise Pro can help. You’ll save time, avoid mistakes, do inventory faster, and calculate your bar’s usage within a few minutes. Any bar manager worth their bar manager salary will take the time to ensure a proper inventory count. If you find you're running into a large amount of shrinkage it may be time to double-check the contents of your staff training manual. Or hire bar staff that's less wasteful.