Understanding inventory discrepancies: waste, recipes and recording errors

Every restaurant that counts stock finds differences. The useful question is how big the difference is, which items it sits in, and whether it repeats. A small, stable variance on a few items is normal. A large or growing one on expensive items is money leaving the business, and it can usually be traced if you work through it methodically.

How the variance is calculated

• Actual usage = opening stock + purchases received + transfers in - transfers out - closing stock.
• Theoretical usage = quantity of each menu item sold multiplied by the recipe quantity of the ingredient.
• Variance = actual usage - theoretical usage.
• Unexplained variance = variance - waste that was recorded.

The theoretical figure is only as good as your recipes. If recipes are missing or out of date, the variance tells you very little, so fix recipes first for the items you are investigating.

In this example the manager weighed ten pizzas during service and found an average of 124 g of cheese instead of 120 g. Four extra grams across 420 pizzas is 1.68 kg, which accounts for most of the unexplained gap. The fix was a portion scoop and a quick retraining, not a search for a thief.

Cause 1: Waste that is not recorded

Waste is normal; unrecorded waste is what creates mystery variances. Common examples are dropped or returned plates, spoiled produce thrown away during closing, test batches of a new dish, and food given to staff.

• Keep a waste log at the station where waste happens, not in the office.
• Record item, quantity, reason and the person's name. Keep reasons short: spoiled, dropped, returned, overproduced, staff meal.
• Review the log weekly. If one reason dominates, deal with that reason (ordering, prep quantities, storage) rather than simply asking staff to be careful.
• Count staff meals as a separate line so they don't hide inside the variance.

Cause 2: Recipes that do not match the kitchen

• Portion drift: cooks gradually use more than the recipe states, especially on cheese, sauces, meat and fries.
• Outdated recipes: the dish changed but the recipe in the system did not.
• Yield not reflected: the recipe deducts 150 g of meat, but the kitchen trims 190 g of raw meat to get it. The BCcampus guide to yield testing explains how to measure the usable share of an ingredient after trimming; use that yield when setting recipe quantities.
• Missing components: a garnish, side sauce or modifier (extra cheese, double patty) that is sold but deducts nothing.
• Unit mismatch: a recipe written in grams for an item stocked in kilograms or cases, so a small typo deducts ten times too much or too little.

Cause 3: Recording and counting errors

• Receiving: deliveries entered from the purchase order rather than from what was actually delivered and weighed.
• Invoices entered late, so purchases land in the wrong period.
• Transfers between branches or from a central kitchen that were moved physically but not recorded.
• Counting: items in a second fridge or dry store missed, opened packs counted as full, counting units that differ from purchasing units.
• Items sold but not rung up, or rung up as a cheaper item.

A routine that keeps discrepancies small

1. Pick your 15 to 20 highest-value ingredients and count them weekly. Count everything else monthly.
2. Count at the same time each period, before opening or after closing, with the same count sheet in storage order.
3. Have two people count high-value items, or one counts and another checks a sample.
4. Check every delivery against the invoice by weight or count before signing.
5. Record waste and transfers on the day they happen.
6. After each count, list the five items with the largest variance in value and investigate those first.
7. For each one, ask in order: was waste recorded, is the recipe right, were receiving and counting correct, and only then, is something missing.

Questions to ask when an item is off

• Did we record every delivery of this item at the weight we received?
• Is it used in any dish, modifier or sauce that is not in the recipes?
• When did we last weigh a portion during service?
• Was any of it moved to another branch or used for staff meals?
• Was the count done in the right unit and in every storage location?
• Is the variance the same every week, or did it start on a particular date?

Zad. Plus keeps purchase orders, supplier prices and waste in one ledger, and its recipes deduct ingredients from stock with each sale, which gives you the theoretical figure to compare against your count.