The 5 best tips for your physical inventory

The physical inventory in a restaurant is the process of physically counting and recording all the ingredients, food, drinks, and supplies that are in stock at the time of the review. This inventory is carried out regularly to compare what is on hand with what is recorded in the system, helping to detect shrinkage, waste, theft, or product handling errors.

Let’s get straight to it: carrying out inventory in your restaurant is very valuable for keeping track of the value of the stock you have in your warehouse.

After speaking with thousands of restaurateurs, we are sharing the main questions we have answered during this research process to develop the physical inventory that best meets your needs 🤝

1. 🎙Ramón: I have questions about how often I should do my inventory.

We recommend doing it monthly between the 31st and the 1st of the following month. That way you do not monopolize your team by doing the inventory every week, but you still keep control by doing it monthly.

Whether it is weekly, monthly, or quarterly, it is important to stick to a regular schedule; this helps you keep better control. In other words, if you have decided to do it on the 30th of every month, define that day as the default day for carrying out the inventory.

We recommend planning the inventory during low-activity periods, such as after closing the restaurant or during a temporary closure. This will minimize interruptions and make the process easier.

2. 🎙Laura: I need advice to do my inventory faster.

Organize the warehouse by category and expiration date to make counting easier. That way, employees will know where each type of product is and can count it faster.

Do more frequent counts of products with high turnover to avoid stockouts or overbuying.

➕ Giovanni, manager of Bar Torpedo tells us: "Organize inventory control with at least one bar manager and one kitchen manager. To do inventory, it is essential to have more than one person to avoid errors and make it more dynamic."

📱Now, with haddock and inventory from mobile, you will no longer need to transfer inventory information from a handwritten sheet into Excel. From your phone, you can do the inventory and have everything inside the app.

3. 🎙Eugenia: How do I account for inventory within my restaurant expenses?

1. Choose an inventory valuation method. We recommend FIFO (First In, First Out) for your physical organization, where the first products to come in are assumed to be the first to go out. (Note: For cost reports, haddock automatically uses the weighted average price).

Do not count what is open; that will be for the next sale. Only unopened product is counted in inventory.

2. Calculate the cost of goods sold. COGS is the cost of the ingredients and products actually used to prepare the dishes and drinks served to customers.

COGS: Opening inventory + Purchases during the period - Closing inventory

💡 In haddock this calculation is automatic: You can check this data in real time from your metrics dashboard, without needing spreadsheets.

3. Calculate the gross margin. COGS is used to calculate gross margin, which is a key profitability indicator. Gross margin is obtained by subtracting COGS from total sales. A high gross margin suggests that the restaurant is managing inventory costs well relative to its sales.

Gross Margin: Total sales - COGS

Monitoring COGS helps you identify opportunities to reduce costs, whether by negotiating better prices with suppliers, adjusting portions, or reducing waste.

➕ Nona Paquita: "At the end of each month, we do an inventory to see the variation from one month to the next. We manually subtract the sales from the inventory to determine what remains."

4. 🎙Roberto: How do I control theft or waste in my inventory?

Create a specific account in your accounting called "Shrinkage Losses" or "Waste". Every time you record waste, assign the cost of the lost products to this account.

Although waste is not part of sales, its cost should still be reflected in the Cost of Goods Sold (COGS) to have an accurate view of operating costs.

📱 Record your waste in haddock: Do not forget that you can record each waste item directly in the App (Inventory section > Waste) indicating the reason (expiration, breakage, etc.) to keep precise digital control.

Practical example

Suppose you record waste of 3 kg of fish that cost €12/kg due to spoilage:

1. Inventory reduction: You reduce 3 kg of fish in your inventory system.
2. Posting to accounts: You record a loss of €36 (3 kg x €12/kg) in the "Shrinkage Losses" account.
3. COGS adjustment: This cost is added to COGS, as it represents an inventory expense that affected your operation.

5.🎙María: How do I use my inventory information to improve my business results?

Using inventory information to improve your business results is key to optimizing costs, reducing waste, and increasing profitability. Here are some of the best practices you can follow with the information you gather from studying your inventories.

• Identify the products that should be purchased in larger quantities: Use inventory data to identify product turnover. High-turnover items should be purchased in larger quantities to take advantage of volume discounts, while low-turnover items should be purchased in smaller quantities to avoid waste.

• Forecast future demand: Use inventory history to account for seasonal factors or special events. This will help you plan purchases and production better, avoiding both excess and stock shortages.
• Adjust portions and recipes: If you find that certain ingredients are running out quickly, consider adjusting portions or reformulating recipes to use resources more efficiently.
• Reduce operating costs: Optimizing storage space can reduce indirect costs, such as energy (refrigeration) and time spent searching for products, improving operational efficiency.

💡 We also recommend reading the article How to create a physical inventory?

Updated on: 23/04/2026