Bar Inventory: How to identify losses in your bar explained

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What Is inventory variance in the hospitality industry?
The meaning of "variance" in the hospitality industry is quite simple. It’s the difference between actual usage (i.e. Cost of Goods Used) and what should have been sold (i.e. Cost of Goods Sold).
In a perfect world, you would use exactly what you sell. For instance, if you sell 3 bottles of beer, then exactly 3 bottles of beers would be depleted from your physical inventory. In that case, there would not be any variance. However, restaurants & bars aren't just selling physical goods by the unit, but by the fluid ounce as well. Selling shots, singles, cocktails, etc. leads to more human error from over-pouring, spillage, or even theft.
A good variance report will tell you how much liquor you are paying for and using, but not making money on. For example, if you sold 10 oz of a specific Vodka and during that same period actually used 15 oz, that would mean that 5 oz were unaccounted for (calculated by 10 oz - 15 oz). In other words, 5 oz just off that one night, just off that once specific Vodka brand was lost. Now imagine that happening across all of your brands, over a longer period like a week or month. Needless to say, it adds up fast!
Understanding your variance is not about watering down drinks or penalizing your staff but instead it's an important indication to see if there are any red flags in your business and where to improve.
At the end of the day, if you were selling shoes and 1 out of 5 pairs of shoes went missing you would want to know right? Well, it's no different with liquor, it's just harder to inventory because it's liquid but it's important to have a handle on your beverage costs.
And trust me, we get it, part of the magic of the hospitality industry is the customer experience. We are not saying not to offer a free drink here or there for a VIP, or to over-pour for a great customer, but what we are saying is that you can not improve what you do not measure... so why not measure it as effortlessly as possible?
This video holds true no matter how you choose to do inventory, but with WISK the whole process is streamlined to make it as seamless as possible. From faster inventory, to easily adding invoices, to direct POS integration, WISK was made to get you the data you need to run a more profitable bar.
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Over-pouring, spillage, and theft happens a lot in the bar industry. This video shows you how to identify those losses so you run a more profitable bar. For more info check out www.wisk.ai/