Do you want to learn how to measure liquor bottles for inventory? If YES, here are tips & strategies on how to manage a bar inventory by hand. Inventory is the biggest single asset on the balance sheet of many businesses. It is more or less the most expensive asset to own and maintain. That’s why proper inventory management is very imperative to the success of any business. Inventories comprise of many different components, depending on the business.

For a bar, it could include raw ingredients, packaged drinks, custom cocktails, food, and even some retail products like t-shirts. To start and run an organized and profitable business, it is very important to keep proper records of your inventory to make sure that no malicious activities are taking place (like theft) and that you have the items you need in stock. Normally, businesses are expected to reconcile inventory weekly, bi-weekly or monthly, and bar inventory is no exception to this rule.

Have it in mind that the inventory in your bar will include the whole list of liquor and other stocked products you offer to your customers. This list would mainly include any beer, sodas, juices, wine or other beverages that are listed on your menu.

Why is Inventory Management Important for a Bar?

For a bar, inventory is the driving force, and poor inventory management can be very bad to the health and survival of the business. With too little stock, your bar might lose out on sales and it might end up affecting your reputation. Also excess inventory requires costly additional storage space. Excess stock also encourages and increases the risk of waste.

Just like any other industry, bar inventory management can be a very challenging task. You have to take into account many factors that may instigate any discrepancies when reconciling these types of inventories. Frequent spillage, breakage, theft, and free drinks can affect your profit margins.

It is also very necessary for a bar to tally up accounts every day to make sure that inventories are correct. Managing inventory by hand means manually counting your inventory regularly (monthly at a minimum) to reconcile every item and catch any discrepancies, including both simple human errors as well as theft.

The physical stock count is done with the help of spreadsheets. Even if they choose to go with an automated inventory system, many bars still count inventory manually every month, so it is worth understanding this method. Doing so will give you a deeper understanding of the basics of bar inventory, which will help you make better purchasing decisions. Hand – counting can be a tedious and time – consuming process, but it is crucial to ensure that your profits are not ending up in someone else’s pockets.

10 Crucial Tips and Strategies on How to Measure Liquor Bottles for Inventory by Hand

Managing a bar inventory by hand involves manually recording inventory data into a spreadsheet, and then physically counting and measuring your bar’s stock. If you’re a new bar manager, you might be feeling overwhelmed with all the new responsibilities, so here are a few tips that will help you;

1. Conduct Your Bar Inventory The Same Way Every Time

Note that you are only setting yourself up for difficulty if you change the way you conduct your bar inventory every time. Having a detailed system in place makes the process faster and easier. For instance, if you count product by starting at the top left of your bar (if that’s how you store the bottles), start in the same place the next time.

2. Keep Your Bar Inventory Low

Indeed there is no reason to keep a whole year’s worth of inventory on hand. It is an added expense your business doesn’t need. Experts in the industry recommend maintaining a 15% inventory. When you divide your total inventory on hand (in wholesale dollars) by your total monthly bar sales, the end number should be around 0.15.

3. Use Bin Numbers

Bin numbers designate a location for where a specific bottle is kept. If you have a large wine and beer program, then you will want to organize your selection by assigning bin locations to each wine. This will help maintain order for liquors and will also help your staff provide timely service because they will know exactly where to find a wine when it is ordered by guests.

If you have a large liquor selection and use bin numbers, consider putting the bin number at the beginning of the name of the item in your POS system. It will make it easy for staff to find and easy for management to compare sales from POS reports to inventory from spreadsheets for measuring variance.

4. Arrange Inventory Records To Reflect Your Storage Method

Arranging your bar inventory records alphabetically although might seem like a good idea, but you probably don’t store the bottles that way on your bar. Your inventory sheet should align your storage method so you can go down the line — from right to left or left to right and bottom to top or top to bottom on the bar —  during the counting process.

5. Consistent Inventory Schedule

Note that one of the best ways to control inventory is to always know what you have on hand. The best way to do this is to keep a consistent schedule. Nonetheless, the most common strategy for this is an opening and closing inventory method.

So at the end of the month on the last day of the month, you’ll take a full inventory of your entire bar products. And then the following month on the last day you’ll take another inventory, this will show you how much you’ve used of a product in that time period. However, if you want to be more specific, you can take inventory on a 4 week schedule, so each inventory session has an equal amount of days in between.

For smaller bars, you might also take inventory weekly. If you’re a larger bar and that is too much to handle, you might consider doing a spot or abbreviated inventory, where you’re taking a look at your inventory counts in order to place orders with your distributors each week.

6. Train Your Staff

Always remember that your staff are the last touch point between your inventory and its fate: loss or profit. Adequately Training staff on the rule of tenths, how to identify shrinkage, and your bar’s beverage inventory management processes will help in a big way.

First, train your staff to start or end shifts by visualizing each bottle in 10 parts. Then always ensure they estimate how many tenths of the bottle is still left and record it. If the bottle is half full, they’ll record 0.5. If the bottle is 9/10ths full, they’ll record 0.9. And so on. If your staffs routinely do this, you’ll have rotating beginning and ending inventory counts to calculate usage with.

Next, teach your staff to identify shrinkage. They should also be very comfortable with the process for taking inventory that your bar uses. This includes the actual counting method you use, along with how to figure out usage, pour cost, variance, and par levels.

7. Experiment with Your Process

Every time you take your bar’s liquor inventory, note what worked and what didn’t. Solicit feedback from those involved. Constantly update your process until it is working just right. It may take a while, but everything worthwhile does. Following these steps will get you well along your way to an optimized beverage inventory management system. There are, however, some special considerations if you’re dealing with wine and beer.

8. Pay Attention to the Data

Have it in mind that regularly counting and measuring your stock will allow you to glean insights about your bar. Use that information to your advantage. For instance, you might sell more tequila on Tuesdays with your taco special and red wine in the winter months. Use historical data compared to recent sales trajectories to forecast what your liquor sales will be.

9. Conduct the Count Outside of Business Hours

One of the very last things you want is to deal with product movement in the middle of your count. Prevent that by conducting your liquor stock – taking outside of your business hours. You can do it either before you open or after you close. Always ensure to budget enough time for the task.

Depending on how large your catalogue is, inventory counts can take anywhere from a few hours to half a day (or even an entire day). So, if you’re planning to conduct an inventory count, set aside the appropriate amount of time to do so.

10. Cost Your Drinks

One important tip for managing your inventory is to cost your drinks. It simply means knowing what each item behind your bar costs you when you pour it. Whether it is an ingredient, beer, or a glass of wine, you have to know what it costs you to pour that, so you can properly price the item on your menu.

Tracking your liquor costs keeps things affordable for guests and shows you where your bar is performing well and where it could use improvement. This could mean getting rid of items that don’t turn a profit and keeping cocktails from becoming too expensive with too many ingredients.

Conclusion

Inventory is the lifeblood of your bar and poor management can be a killer. Many managers believe that bar inventory is a complex, time – consuming process that doesn’t serve any real purpose. Done right, though, it can reveal a great deal about how your business is running and keep your bar on the road to profitability and success.

Solomon. O'Chucks
Latest posts by Solomon. O'Chucks (see all)