How to Improve Your Bar’s Inventory Management

How to Improve Your Bar’s Inventory Management
Managing bar inventory is an important concept to master when you first open a bar. Learn about the benefits and ways to improve your inventory management.
by Square Jun 19, 2023 — 3 min read
How to Improve Your Bar’s Inventory Management

A weekly glance in your back room to determine stock levels might seem like a simple way to manage your inventory, but the reality is that bar inventory is a much more complex scenario.

When you open a bar, good inventory management is critical. That’s why it is important to ensure you’re implementing best practices from the get-go.

Why is managing bar inventory important?

Effective inventory management is the lifeblood of your bar, and poor management can be a problem. With too little inventory, your bar may miss out on sales, not to mention risk tarnishing your business reputation. On the other hand, too much inventory can sit on your business balance sheet, create the need for paying for unnecessary storage, and also increases the risk of waste.

How can you manage inventory at your bar?

You may intially feel that manual inventory management (pen and paper) might be the easiest solution, but this tactic can reduce accuracy and slow down other operations. Late nights in the back carefully counting stock can be tedious and take away other valuable time that could be better spent growing your business.

Inventory management software automates the process and minimises any negative impact on your schedule. Look for software that integrates with your bar’s point of sale (POS), as that will create a cohesive, integrated flow in your daily operations. With an integrated POS and inventory system, the software can automatically track inventory when a bartender rings up a drink and you can benefit from an accurate view of stock on hand (SOH) in real time.

Benefits of a successful inventory management system

Here are five benefits an effective inventory management system can bring to your bar:

Regular customers will remember when you were out of their favourite . beverage the next time they are deciding to go for after-work drinks. Running out of stock could actually result in the loss of future business. A comprehensive inventory management system can help you better forecast materials needed, prevent shortages, and maintain a high level of customer satisfaction.

Rather than ordering a product as soon as it runs out, you can strategically plan a bulk order of materials that will minimise purchasing and shipping costs.

When you run out of bar materials at short notice, it forces you to arrange overnight or expedited shipment of products and supplies. This can be a costly proposition, particularly because of the size, weight and care required when shipping alcohol cases — which can put an unexpected dent in your carefully planned budget. Enhanced inventory management and smarter planning planning reduces the need for rush orders and saves you from unexpected costs.

Bars lose a good amount of sales from theft, spilled drinks, and free drinks. Often bartenders don’t even realise how much they’re wasting when they’re busy on the job. An effective inventory management system helps you showcase this data, as well as determine some waste-reduction measures.

If your goal as a bar owner is to make a profit, then real-time inventory data can help you make decisions about sales and future purchasing. Tracking inventory and monitoring customer demand enables you to identify trends that help predict what to order (and what not to order). It can also help you with smarter demand-based pricing — where you could possibly price drinks based on their popularity.

7 ways to improve your bar inventory management

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