Inventory Management

Efficient inventory management can make a world of difference for hospitality entrepreneurs. With a well-organized approach, you can accurately track inventory counts, optimize food costs, minimize purchasing discrepancies, and reduce waste.

Horeko is here to support you with the Inventory Management Analysis, which brings together all these aspects and helps you always find the perfect balance between your purchases and sales.

 

The Inventory Management Analysis

This analysis shows what you have purchased over a period and compares it to what should have been purchased theoretically. The theoretical purchase is calculated using the starting inventory, sold dishes, recorded waste, and ending inventory. This data is compared with the information from invoices and delivery notes from various suppliers, which you can upload via the Invoices Function [link].

The difference is calculated by subtracting the theoretical purchase from the actual purchase. A positive amount means that more was purchased than theoretically calculated, while a negative amount indicates that less was purchased than theoretically calculated. In both cases, action is required to identify the causes and optimize inventory management processes.

 

Getting Started

To get started, you need data from:

• Inventory counts
• Waste registration
• Invoices
• Dishes, connecting to your sales

Optional: a cash register connection, however it can be done with a manual import

The more information you have, the better!

 

Creating an Analysis

1. Click on Analysis > Inventory Management > +New.
2. Enter a name and select the start and end dates of the period to be analysed.
3. Select one or more locations.
4. Optionally, enter a threshold percentage to ignore minimal differences and focus on larger discrepancies.
5. Add descriptions or notes if necessary.
6. Select a start and end inventory list, which will be automatically filtered based on the selected period and location(s).
7. Recorded waste and invoices will be automatically loaded.
8. With an automatic cash register connection, sales will be automatically loaded. Without an automatic connection, you can manually enter or import the sold dishes via an Excel file.
9. Save the entered and selected information and go to the Analysis tab.

 

The Analysis

At the top of the analysis, the totals are displayed: the total of actual purchases and theoretical purchases. The difference between them is shown both in euros and as a percentage, so you can immediately see whether you purchased more or less than theoretically calculated.

Next is an overview of the ingredients, available in a basic or detailed view. The columns are explained as follows:

Ingredient Information

• Product Name – the name of the product
• Article Number – the article number of the ingredient
• Supplier – who supplies the product
• Usable Amount – amount and unit in which the product is purchased
• Product Price – the price of the product
• Price per Unit – price per kilogram, liter, piece

 

Horeko Data

• Starting Inventory – data from the selected starting inventory list.
• Sold – quantities from the cash register/manual import, matched with the dishes in Horeko.
• Waste – automatically retrieved data from waste registration.
• Ending Inventory – data from the selected ending inventory list.

 

Actual Purchases

• Amount – amount purchased according to invoices.
• Value – value of the purchased quantity.
• Packages – number of packages purchased.
• Package Value – value of the packages.

 

Theoretical Purchases

• Amount – calculated amount based on starting inventory, sales, waste, and ending inventory (formula= Sales + Waste  End Inventory - Start Inventory)
• Value – value of the theoretical purchase.
• Packages – number of calculated packages.
• Package Value – theoretical value of the packages.

 

Actual vs. Theoretical

• Amount – difference between purchased and theoretically calculated quantities.
• Value – difference between purchased and theoretically calculated values.
• Packages – difference between purchased and theoretically calculated packages.
• Package Value – difference between purchased and theoretically calculated package values.

 

Further Details and Actions

By double-clicking on the ingredient name, you can view the details. This includes general information, units, and prices, and you can see in which dishes and semi-finished products the ingredient is used. You can also see what has been recorded as waste and inventory and the purchased quantities per invoice.

For an overview by supplier, you can either use the filters or go to the Suppliers tab.

What's Next? Take Action!

The analysis provides insight into the ingredients where actual and theoretical purchases differ. These ingredients deserve extra attention. But where do you start?

Step 1: Analyse the Data

Double-click on the ingredient in the analysis to view the detailed information. Check the following points:

• General
  • Are the content, unit, and price correct?
• Recipes & Sales
  • Is the ingredient correctly processed in the displayed recipes?
  • Are there any missing recipes?
  • Is the quantity in the recipe correct?

• Waste
  • Is the product registered as waste?
  • Is the recorded information realistic?
• Inventory
  • Is the ingredient listed in the selected inventory lists?
• Invoices
  • Was the product purchased during the selected period?
    • Yes: Are the quantities plausible?
    • No: Are you possibly purchasing a different product that you use in the recipes? Then add the correct ingredient to your recipes.

 

Step 2: Take Action

Based on the findings from the above checkpoints, you can take the necessary actions:

• Check Inventory Counts
  • Action Point: Discuss with your colleagues how the counts are conducted and regularly perform checks.
• Check Waste Registration
  • Action Point: Ensure that all waste is registered. Make sure that everyone registers waste, not just a few employees.
• Check Recipes
  • Action Point: Check if the purchased ingredients are listed in the recipes. Replace ingredients in your recipes with the ones you actually use.
• Check Portion Sizes
  • Action Point: Occasionally check the dishes served to ensure the portion sizes match those described in the recipes.
• Register Free Dishes or Supplements
  • Action Point: Ensure that free dishes or supplements are registered as sales. Consider creating a button in the cash register for these cases.
• Check Sold Items
  • Action Point: Make sure all dishes and supplements are recorded in your cash register and that no unclear terms like "open kitchen" or "extra" are used.
• Check Invoices
  • Action Point: Always compare deliveries with invoices and delivery notes to ensure everything is delivered correctly.
• Register Use of Ingredients Outside Regular Sales
  • Action Point: Ensure that the use of ingredients for staff meals, when taking them from another location, or for personal use, is registered.

 

Extra Tips

Here are a few extra tips:

• Training and Awareness

• • Action Point: Regularly train your staff on the importance of accurate inventory counting and waste registration. Make them aware of the impact of their actions on inventory and costs.

• Regular Audits

• • Tip: Conduct regular internal audits to check that all processes are being followed correctly. This helps identify discrepancies early on.

• Improve Communication
  • Tip: Ensure good communication between the kitchen, purchasing, and administration. A well-informed team works more efficiently and makes fewer mistakes.

• Focus on Critical Ingredients

• • Tip: Pay extra attention to ingredients with a high turnover rate or significant impact on your costs. Small discrepancies in these items can have large consequences.

• Feedback Loop
  • Tip: Create a feedback loop where employees can report discrepancies and suggest improvements. This promotes a culture of continuous improvement.

 

Optimizing your inventory management is an ongoing process that delivers direct benefits to your business. By regularly performing analyses and taking action based on the findings, you not only gain more control over your costs but also improve the efficiency of your operations. Every step you take to identify and correct discrepancies contributes to a more stable and profitable business.

With the insights you gain from Horeko's inventory management analysis, you'll be better equipped to make decisions that increase your profitability. It's a powerful tool that helps you reduce waste, manage inventory more accurately, and ultimately increase your profits. Stay consistent in your approach, involve your team in the process, and take advantage of the available technology and tips. This way, you take an important step towards a successful and sustainable hospitality business.