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Lauren Platero

Liquor Inventory Formula: How to Easily Calculate It

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The liquor inventory formula is a mathematical equation that allows bars and restaurants to track inventory levels. From selling different beer brands to mixing popular cocktails, alcohol turnover can move pretty quickly. So, it's vital that you know how to determine exactly what you have available. From this post, you'll learn everything you need to know about calculating the value and quantity of your beverage stock. Now, without further ado, let's get right into it.

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Liquor Inventory Formula

While operating a bar and restaurant, you’ll have to place new orders for beverage inventory on a regular basis. But how can you determine how much stock is currently sitting in your liquor storage space? The liquor inventory formula below should help you get an accurate figure:

Beverage Inventory = Beginning Inventory + Purchases − Ending Inventory

Let's break down this formula in a bit more detail. This way, you'll know exactly how to put the equation into real-life practice. 

First, you need to locate the number of bottles you had in beverage storage at the start of a period. This metric will be the Beginning Inventory, and consists of everything from beer cans to wine bottles.

Then, you need to check your POS system and find the number of purchases since the starting point. This metric is what's labeled as Purchases in the liquor inventory formula. 

Once you add the first two figures together, you need to subtract the Ending Inventory that's still for sale. This is the number of cans and bottles left over at the end of the period. 

Another term for this equation is the "liquor usage" formula. However, for the sake of calculating stock levels and managing inventory control, we refer to it as the liquor inventory formula. And while there are other calculations you will find valuable, this one is a great starting point.

What Does the Liquor Inventory Formula Measure?

The liquor inventory formula measures the amount of beverages that you have on hand after so many sales. Even if you want to know the exact number of cans and bottles you have left over from a given period, the liquor inventory formula will provide you accurate insight. The best part? It’s a simple calculation to utilize. 

You'll have to constantly know at the ends of various periods how much you have left from the beginning, anyway. After all, how else could you gauge new orders? By knowing exactly what you need and when, you’ll be able to avoid purchasing excessive quantities of beverages and maximize revenue

The Importance of Using a Beverage Inventory Formula

The primary reason for using the liquor inventory formula is to efficiently manage inventory levels. In doing so, your bar can be as profitable as possible with its current inventory. You'll know what to buy more of, and which bottles to reduce or eliminate entirely. 

For instance, using the liquor inventory formula might tell you that you're running out of a best-selling whiskey brand. Or, it might tell you that certain ingredients needed for an original mixed drink recipe just aren't selling. In this case, the business owner and bartender can work together to scale back on beverage quantities.

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Let Us Help You Automate the Liquor Inventory Formula!

Maybe you’re beginning to find that your bar’s cost of goods sold is too high. Or, perhaps your bar staff is unable to make certain drinks because you run out of the necessary ingredients too fast. Regardless of what your concerns are, BinWise is a platform that can streamline inventory tracking within your bar or restaurant. From automated calculations to intuitive reporting, keeping up with liquor inventory has never been an easier process. Book a demo with us today to talk with an industry expert and view a walkthrough of the software!

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