Inventory tracking helps restaurants order the right amount of food and drink to meet menu needs and storage limitations. Restaurants use perpetual inventory systems to continuously update the quantity of ingredients on hand. The initial setup process takes some time, but the result offers owners an easy way to determine instantly what items need to be reordered quickly to avoid shortages.


Restaurants looking to set up a perpetual inventory system must first log the food and drinks it carries into a database. First, note the cost of each unit, as well as the portion parceled out in each food or drink order -- for example, the “cost per pour” used in liquor sales. Then, input that information into a spreadsheet or database. Finally, perform a full inventory count to give yourself a baseline.

POS System

After the database has been set up, perpetual inventory takes place when the restaurant employee enters the order into the point-of-sale, or POS, system. A connection between the POS system and the inventory tracking database notes changes in real time. If there is a run on the grilled calamari or the bottles of Malbec, a restaurant owner can see the numbers deplete on the computer screen and acquire more or steer diners elsewhere. If no one is ordering the barley soup, maybe it is time to find something else to take its place on the menu.

Additional Recording

Inventory also gets depleted by reasons other than direct sale to customers. The kitchen might overcook a piece of fish, for example, and start over with a new salmon steak. A waiter could drop a tray with several drinks that then need to be refilled. A customer who shows up every Saturday might be comped a bottle of wine on his birthday. Even if these transactions don’t get recorded in the POS system, they need to be recorded and added to the perpetual inventory system as soon as possible to maintain its integrity.

Loss Management

Having a perpetual inventory system doesn’t guarantee the accuracy of a restaurant’s inventory measurements. If items spoil or get lost or damaged and are not recorded, it will seem like there are more goods on hand than actually are in the restaurant. In addition, goods lost to theft would not be recorded in the system for obvious reasons. If your perpetual inventory constantly overestimates the amount of coveted goods in your restaurant, like steak or liquor, it is time to consider whether you need to do more to monitor storage and check against pilferage.