If you run a restaurant, you know food costs can get out of hand fast. Prices change all the time, and if you're not keeping a close eye on what comes in and what goes out, you could be losing money without even realizing it. While it's easy to focus on sales or staffing, one of the most important areas to watch is your inventory.

Controlling restaurant food costs really starts with managing your inventory the right way. That means knowing what you have, how much you use, and what's being wasted. When your inventory is off, you might order too much, throw away spoiled items, or run out of key ingredients - leading to lost profits and unhappy customers.

Taking the time to set up a good inventory system helps you make smarter decisions. You can spot problems early, avoid waste, and keep your food costs in line with your budget. The good news is, it doesn't have to be complicated.

To keep your restaurant profitable, you need to know how much you're spending on food and why. This is where inventory management plays a big role. When you don't keep track of what's coming in, what's being used, and what's being thrown out, your food cost can quickly climb higher than it should be.

Food cost is basically how much you spend on the food you sell. If you don't know what you already have in stock, you might order more than you need. That can lead to spoilage, waste, and extra spending. On the other hand, if you run out of important ingredients because your inventory wasn't accurate, it can slow down your kitchen and hurt customer satisfaction.

Good inventory management helps you avoid these problems. When you know exactly what's in your cooler, freezer, and dry storage, you can make smarter decisions about what to order and when. You also get a clearer picture of what items are being used too quickly or not at all. This can help you spot over-portioning, waste, or even theft.

Keeping a close eye on your stock helps you figure out your "actual" food cost versus your "ideal" food cost. The closer those two numbers are, the better you're doing. A good inventory system lets you catch small problems before they become expensive ones. It's one of the simplest and most effective ways to take control of your food cost and protect your bottom line.

Setting up a proper inventory system doesn't have to be complicated, but it does need to be consistent. The goal is to always know what you have, what you need, and what's going to waste. A good system helps you stay organized, avoid over-ordering, and catch issues before they cost you money.

Start by organizing your storage areas. Group items by type - meat, dairy, produce, dry goods, etc. - and keep similar items together. Use labels and make sure everything has a home. This makes it easier to count items and spot when something is low or missing.

Next, decide how often you'll take inventory. Many restaurants do a full count weekly or bi-weekly. Choose a regular schedule and stick to it. Always count on the same day and time (ideally before deliveries or prep) for more accurate results. Try to have the same person or team do the count every time so there's consistency in how items are measured and recorded.

You'll also need a simple inventory sheet or spreadsheet. It should list every item you stock, along with columns for quantity, unit (like pounds or cases), and cost. Keep it easy to update and make sure everyone involved knows how to use it.

Finally, set par levels - the minimum amount you need to have on hand at all times. If your stock falls below that level, you know it's time to reorder. This prevents overstocking and helps you buy only what you actually need.

With these basic steps in place, your inventory system will give you the control you need to keep food costs in check.

One of the biggest reasons food costs get out of control is simple - over-ordering. When you buy more than you need, it often ends up in the trash. That's money wasted. The best way to avoid this is by tracking your usage, which means keeping an eye on how much of each item your restaurant uses over a set period of time.

Usage tracking helps you understand what's actually being used versus what's just sitting on the shelf. To figure out usage, look at how much of an item you had at the beginning of the week, add any new deliveries, then subtract how much you have left at the end of the week. This tells you how much was used.

For example, if you started with 10 pounds of cheese, bought 5 more, and ended the week with 4 pounds, you used 11 pounds of cheese that week. That's your usage rate. Over time, you'll start to see patterns. You'll know how much of each ingredient you typically use in a day or week, and that helps you plan your orders better.

When you track usage regularly, you avoid guessing how much to buy. This keeps you from overstocking, cuts down on spoilage, and helps you order just the right amount. It also gives you the information you need to spot problems, like over-portioning or theft.

Tracking usage may take a little effort, but it pays off by keeping your food cost low and your kitchen running more efficiently.

FIFO stands for First In, First Out. It's a simple but powerful method for managing your food inventory, and it plays a big role in controlling restaurant food cost. The idea is straightforward - use your oldest stock first before using newer items. This helps reduce waste from spoiled or expired food.

In a busy kitchen, it's easy for newer items to get used first because they're on top or in front. But when older products sit too long, they can go bad, get thrown out, and waste money. That's where FIFO comes in. By always using the oldest product first, you reduce spoilage and make sure you're getting the full value out of what you've already paid for.

Putting FIFO into action is simple. When new food items come in, place them behind the older ones on the shelf, in the cooler, or in the freezer. This way, the older items are front and center, ready to be used next. Also, make sure everything is clearly labeled with the date it was received or prepared. This helps your staff quickly spot which items should be used first.

Train your team to follow FIFO every day during prep and service. Make it part of your kitchen routine, not just something you do once in a while. The more consistent you are, the less food you'll waste and the more control you'll have over your food costs.

In short, FIFO is one of the easiest ways to stretch your food budget and keep your inventory fresh and efficient.

Inventory variance is the difference between what your inventory records say you should have and what you actually have on hand. In other words, if your records show you should have 10 pounds of chicken, but there are only 6 pounds in the cooler, you've got a 4-pound variance. These differences may seem small, but over time they can lead to serious food cost problems.

There are many reasons for inventory variance. Food might get thrown away without being recorded. Items could be over-portioned during prep. Sometimes, staff may accidentally use the wrong ingredient or mislabel containers. In some cases, variance may be due to theft. Whatever the reason, the result is the same - money lost and inaccurate inventory numbers.

To control food costs, it's important to regularly check for variance. Do this by comparing your expected inventory (based on past counts and purchases) with your actual inventory during your next count. If you notice items consistently missing or running short, it's a sign that something is going wrong.

Reducing variance starts with training your staff to follow recipes, portion sizes, and prep instructions carefully. Make sure all waste is logged and explained. If an item gets dropped or spoiled, it should be written down right away. Also, keep an eye on portion control during service.

When you track variance consistently, you can catch problems early, take corrective action, and bring your food cost back under control. It's one more way to make sure your kitchen runs efficiently and profitably.

Keeping track of inventory doesn't have to be a long, stressful task. With the right tools and techniques, you can make the process quicker, more accurate, and easier for everyone involved. Streamlining inventory tracking helps you save time, avoid mistakes, and stay on top of your food costs.

Start with a simple system that works for your team. Some restaurants use printed inventory sheets or spreadsheets to record item counts. These can be effective if they're kept up to date and used consistently. Make sure your list is organized by storage area (cooler, freezer, dry storage) and includes units of measurement (like pounds, cases, or gallons) to avoid confusion.

To make tracking even easier, consider using digital tools. Many inventory apps and software options allow you to enter counts on a phone or tablet, making the process faster and more efficient. These tools also improve data collection, helping you track what's on hand, what's been used, and what needs to be ordered. When your data is accurate and organized, you can make better decisions about purchasing and waste management.

Other useful techniques include setting up low-stock alerts, using barcode scanning, and creating templates for weekly counts. Assign one or two people to handle inventory regularly so the process stays consistent.

The more you simplify your tracking process, the more likely it is that your team will do it right - and on time. With good tools and clean data, controlling restaurant food cost becomes a whole lot easier.

Keeping food costs under control is one of the most important things you can do to protect your restaurant's profits. While many factors affect food cost, inventory is one area you can manage directly - and it makes a big difference. With the right systems and habits in place, you can stop overspending, reduce waste, and avoid the stress of constantly running short on ingredients.

From setting up a solid counting system to using the FIFO method and tracking usage rates, each step plays a part in making sure you're only buying what you really need. By spotting inventory variance early and using tools that make the process easier, you can stay in control instead of reacting to problems after they've already cost you money.

Inventory management isn't just about taking counts - it's about making smarter decisions with the information you gather. When you know exactly what's coming in, what's being used, and what's being wasted, you can run a tighter operation and keep your costs in line.

If you haven't taken a close look at your inventory practices in a while, now is the time to start. Even small changes can lead to better results. The more organized and consistent your approach, the more confident you'll feel when it comes to managing your food costs - and the more money you'll save in the long run.