How to Use a Variance Report & Minimize Bar Inventory Loss

Are you wondering how to use a variance report or how to minimize inventory loss? Being a bar owner or restaurant owner can be stressful, especially when you have to take inventory. Not only can the process of taking inventory be simplified, but so can reporting when you use a platform like BinWise. 

Inventory variance is something that bars and restaurants come across quite often, but understanding variance and what that means doesn’t have to be difficult. BinWise provides users with variance reports so they can see and understand any discrepancies that may be present. 

But, you may be wondering how to use a variance report or how to minimize inventory loss. A variance report holds all the data you need, let’s get into it. 

What Does a Variance Report Tell You?

A variance report tells you expected inventory vs actual inventory. It highlights inventory quantity discrepancies so that you can pinpoint which items need to be investigated to understand what went wrong during the inventory count. 

Here’s what a variance report tells you:

• Inventory discrepancies: See which items have overages or shortages.
• Where inventory shrinkage is happening: This can include theft, overpouring, or unrecorded comps. Variance reports flag suspicious patterns.
• Human errors: Identify data entry issues, miscounts, or missed invoices that skew inventory accuracy.
• Inventory trends: Track recurring variances over time and spot issues by location, time of day, or staff member.
• Cost impact: Understand how much each variance is costing your business in dollars, not just units.

With insight like this from variance reports, you can take action. For example, you may decide to retrain your staff, tighten procedures, or investigate vendors. Taking action is essential before the small losses turn into serious revenue drains.

Using a platform like BinWise ensures that these reports are generated automatically and integrated with your POS system and purchase data. This way, nothing slips through the cracks.

5 Steps on How to Use a Variance Report to Spot Inventory Loss

Follow these five steps to identify and reduce inventory loss while using a variance report:

1. Run a variance report regularly. It’s best to do this weekly or bi-weekly to ensure you catch any issues before they grow. ‍
2. Review high-variance items. Focus your attention on high-value or frequently used items such as your best-selling wines or premium liquors. However, don’t forget about the other items. 
3. Check for missing data. Look for missed invoices, unrecorded comps, forgotten deliveries, or anything that may explain any discrepancies. 
4. Investigate patterns. If you identify variance, check to see if the same products are always short. Recurring losses may point to overpouring, theft, or staff training issues. 
5. Take action. Correct action is highly advised if you notice a variance. You may need to talk to your staff, adjust pour sizes, implement staff training, etc. 

A pro tip would be to use a tool like BinWise. The BinWise platform makes this process fast, more accurate, and easier to repeat. This way, you can stay in control of your inventory. 

Tips to Minimize Inventory Loss Using Variance Reports

Variance reports aren’t just about identifying loss, they’re a powerful tool to use for preventing it. 

Here’s how to use a variance report and get the most out of it:

• Use variance reports as training tools. Train your staff on how to use the report to build accountability and reduce future mistakes.
• Set acceptable variance thresholds. Establish benchmarks for your inventory, for example, less than 2% variance. This way, you can spot when something truly needs attention. 
• Pair the variance reports with daily tracking. Add variance reports to your list of daily tracking tools, along with PAR-level alerts and daily requisitions to catch potential issues before they escalate. 
• Investigate early. Don’t wait until the end of the month to investigate. Address any discrepancies weekly or bi-weekly to prevent compound losses. 
• Identify recurring issues. If the same inventory items show variance every cycle, it’s time to investigate further. 
• Leverage platform features. If you’re bar or restaurant is using BinWise, take advantage of all of the platform’s tools and features. These include alerts, audit history, real-time POS syncs, and more for deeper insights. 

Turning variance reports into part of your operational routine at your bar or restaurant can protect your margins, not just your inventory. 

Why Regular Variance Reporting Saves You Thousands

It’s important for bars and restaurants to protect their bottom line. Running variance reports on a regular basis helps businesses catch small issues before they turn into expensive problems. Over time, small variances can quietly eat away at your business’s margins and overall profitability. 

By reviewing reports weekly or bi-weekly, businesses can optimize ordering based on what’s actually being used and not just what they think is moving. This reduces waste, prevents overstocking, and keeps purchasing lean and efficient. 

Regular reporting also creates accountability within your team and organization. When your staff knows that inventory is being tracked and reviewed regularly, accuracy may improve, and preventable losses may become less frequent. 

When you utilize a tool like BinWise, variance reporting will become second nature. The payoff will add up quickly. 

Automate Variance Reporting with BinWise

Manual inventory tracking is time-consuming and is a process that is prone to costly errors. BinWise takes the guessing out of the process by automating and syncing purchases, sales, and inventory counts all in one platform. 

As soon as a discrepancy occurs, BinWise will flag it and give you real-time visibility into your inventory. This way, you can take immediate action. 

Are you ready to see how to use a variance report in BinWise to minimize bar inventory loss? Schedule a demo today! 

Frequently Asked Questions About How to Use a Variance Report

Are you new to variance reports? Maybe you’re looking to improve how to manage inventory loss at your bar or restaurant. Either way, these common questions will help you understand how to use a variance report, what this report tells you, and how BinWise can simplify the process. 

1. What is a variance report in inventory management?

A variance report compares expected inventory levels to actual physical counts. It highlights discrepancies, also known as inventory variance, so bars and restaurants can investigate and address losses from theft, overpouring, or data errors.

2. How do you use a variance report to reduce inventory loss?

To reduce inventory loss, you may use a variance report to identify high-variance items, investigate missing data like unrecorded comps or missed invoices, and track patterns of loss. With these insights, you may decide to implement additional staff training, tighter controls, or conduct a vendor review. This way, you can significantly reduce shrinkage.

3. What does a variance report tell you?

A variance report tells you which products have inventory discrepancies and how severe they are. The report can uncover causes like theft, human error, or overpouring, and help pinpoint patterns by product, shift, or location.

4. How often should you run an inventory variance report?

For best results, variance reports should be run weekly or bi-weekly. This allows bars and restaurants to catch small issues early and make timely corrections before losses add up.

5. How can BinWise help with variance reporting?

BinWise automates variance reporting by syncing inventory counts, purchases, and POS sales data. It flags discrepancies in real time, saving time and reducing errors compared to manual tracking.