How to do bar inventory
To do bar inventory, count every bottle, keg and house batch with the bar closed. Count spirits every week, and write open bottles in tenths, such as 0.4. What you used is the last count, plus deliveries, minus the new count.
One count tells you what is on the shelf and what to order. Two counts and the deliveries between them tell you how much you used, and your The cost of a drink's ingredients divided by its menu price, as a percentage. is built on that number. So a careless count makes every number after it wrong. This guide shows you how to get it right.
What a bar inventory counts
A bar inventory covers everything you buy to make drinks, counted in one walk: spirits, liqueurs, vermouth, wine, kegs, bottled beer, mixers, and the house syrups and batches in the fridge or freezer. A liquor inventory is the same count for spirits and liqueurs only.
The price per bottle on the sheet turns your bottle count into money. Count a house batch like any other bottle. Half a bottle of your house martini batch in the freezer is gin and vermouth you still have. If you leave it off the sheet, that gin and vermouth show up as used.
When you make a house batch, you're moving ingredients from individual bottles into a new container. You haven't used them up just by batching them. Your count needs to show what went into the batch and how much of the finished batch is still on hand, so you don't count those ingredients twice.
How to do bar inventory, step by step
- Set the route. List every product in the order you walk past it: the The shelves behind the bar where the open bottles are kept. shelf by shelf, then the speed rail under the bar top, the fridges, the freezer, the walk-in fridge and the stockroom. That way nothing gets skipped, and you find any line in seconds. When a new product goes on the back bar, add it to the sheet the same day, in its place on the route.
- Count with the bar closed. Count after the last guest leaves or before you open, and keep the same time for every count. A bottle poured during the count gets counted twice or not at all. Jeffrey Morgenthaler gives the same advice: don't buy or sell anything during the count.
- Count in pairs. One person handles the bottles and calls out each number, and the other writes. Fewer numbers get misheard, and the writer can ask "which size, the liter?". Rotate sections between counts, so a second person checks every shelf.
- Count full bottles first, then the open one. Call out "four, and five tenths" and write 4.5. An open bottle written as full adds stock that isn't there.
- Count every place. Give a product a line for each place you keep it and for each size.
- Enter deliveries and prices. Add every delivery since the last count, and the price per bottle from the last invoice. Keep transfers, breakage, staff drinks and other recorded waste separate from purchases. You will need those records when you compare what left the shelf with what your sales say you served.
How to count partial bottles
A partial bottle is an open bottle. Count it in tenths: hold it at eye level and imagine it split into 10 equal parts by volume. Write down the tenths left, such as 0.4 or 0.7.
A tenth means 10% of the bottle's original volume. If there's only a splash left, don't automatically count it as 0.1. A small amount in the bottom may be considerably less than a tenth. An empty bottle is 0, and it goes in the recycling.
The shape of the bottle
Tenths go by volume, not height. In the drawing, liquid at half the height of a full bottle is about 0.65 of the bottle, not 0.5. Every bottle shape is different.
So for your best sellers, make a reference bottle. Take an empty 750 ml bottle and pour in 75 ml (about 2.5 oz) of water at a time. That is one tenth of the bottle. Mark each level on the glass. For a 1 liter bottle, pour 100 ml (about 3.4 oz) at a time. Keep the marked bottle off the bar and check your counts against it.
By weight
Weighing an open bottle is generally more accurate than estimating by eye. You need a scale and two weights for each product: a full bottle and an empty one. Weigh both once when you set up, and write them on the sheet.
Say a bottle weighs 1,200 g full and 500 g empty. If the open bottle now weighs 920 g, you have (920 − 500) ÷ (1,200 − 500) = 420 ÷ 700 = 0.6 of a bottle.
Open bottle = (weight now − empty weight) ÷ (full weight − empty weight)
This works for any liquid, a cream liqueur as well as a gin, because it compares the bottle with itself.
But weighing takes time, because every open bottle goes on the scale. For most of the back bar, tenths are close enough. Weigh only the bottles where one tenth is a lot of money: on a $70 bottle, one tenth is $7.
Kegs
You can't see inside a keg, so weigh it and use the same formula with keg weights. Ask your distributor for the full and empty weights of the kegs you buy, or weigh one of each once yourself. Lifting a keg only gives you a guess.
How often should you count bar inventory?
Count spirits and liqueurs every week. If you count monthly, a problem may run for up to 4 weeks before you find it. The higher a bar's sales, the more often it should count, says Robert Plotkin in Bar & Restaurant.
Count vermouth with the spirits every week too. Bottled beer, house wine and mixers can wait: count them once a month.
If you count them monthly, work out their usage over the same month. To get a reliable pour cost for the whole bar, you need an opening and a closing count for every category in that calculation.
A product you count monthly still needs a count before you order it. Count just the lines on that order, in every place you keep them, and order from those numbers. This short count is only for the order. Your regular weekly and monthly counts still give you the value and usage of everything.
From the count to what you used
Usage is what left the shelf between two counts, for any reason.
Take your house bourbon: 750 ml bottles at $30 a bottle on the last invoice. You count every Sunday after close, order on Monday, and the delivery arrives on Tuesday before you open. Last Sunday you counted 5 bottles. You ordered 14 on Monday, and all 14 arrived on Tuesday. This Sunday you count 4 full bottles and one about half full, so you write 4.5.
Your usage is 5 + 14 − 4.5 = 14.5 bottles. In money, that is 14.5 × $30 = $435.
Used = last count + received + made in house − this count
The same count also gives you the value of your stock. That is the count times the last price you paid, before tax. Some bars use an average of recent invoice prices instead. Pick one method and keep it, or the value changes when the shelf hasn't.
The bourbon on the shelf this Sunday is worth 4.5 × $30 = $135.
Value = count × last price paid per bottle
House batches need one more step. Suppose you begin with 5 bottles of gin, receive 14 and finish the week with 4.5 bottles of straight gin. Your gin has fallen by 14.5 bottles.
Now suppose the team used the equivalent of 2 bottles of that gin to make freezer martinis, and all those martinis are still in stock. You haven't served or lost those 2 bottles of gin. They have simply moved into a different container.
| Gin | Bottles |
|---|---|
| Removed from the gin bottles | 14.5 |
| Still held in the batch | 2.0 |
| Gin used | 12.5 |
If some of the batch has already been sold, that part is usage of the batch, not stock on hand. So the gin's cost is counted once: in the gin's usage for what was poured straight, and in the batch's usage for what was sold as martinis. Moving gin into a batch never adds to the cost of what you used.
To get the bar's pour cost, add up the usage in money for every product and divide it by sales for the same days. Say you used $7,000 of stock in one week and sold $35,000 before tax. Then 7,000 ÷ 35,000 = 20%, your counted pour cost. Your count should cover everything you buy for drinks: if citrus and coffee aren't on it, that figure comes out lower than what your drinks really cost. For a cocktail menu, 20% is inside the 18 to 24% that Morgenthaler calls the industry standard. To judge your own figure, see what a good pour cost is.
Usage also shows what you can't explain, such as pours that run over the spec. To find what your sales should have used, multiply the bourbon in each drink's spec by the number of that drink sold, and add it up. Say that comes to 14 bottles. The other 0.5 bottle, worth $15, is unaccounted for. That gap is your liquor variance.
Turning the count into an order
The stock level you order up to: on order day, what you count plus what you order equals the par. is the level that each order brings a product back up to. You set it from usage, the nights between deliveries and Extra stock kept for a week that is busier than normal, or a delivery that arrives late., as explained in setting par levels.
Your house bourbon has a par of 19, and this Sunday's count is 4.5. So the order is 19 − 4.5 = 14.5, which you round up to 15 bottles.
Order = par − this count − bottles already on order, rounded up to a whole bottle
Order from the count, not from what you see on the back bar. Say Aperol has a par of 15. The back bar shows 2 bottles, but there are 4 more in the stockroom, so the count is 6. The order is 15 − 6 = 9. If you order from the back bar alone, 15 − 2 = 13, you buy 4 bottles too many.
Before you place the order, check whether any deliveries are already due. If 6 bottles are on hand and another 4 arrive tomorrow, don't order as though you only have 6. Count stock already on order, so you don't buy the same bottles twice.
Receiving the delivery
Your numbers are only right if every delivery is entered. So check each delivery against your order before the driver leaves: the number of bottles, the sizes, the products and the invoice price. A 750 ml bottle in place of a liter changes your cost per pour.
If anything is missing or wrong, record the discrepancy on the delivery paperwork, take a photo if needed and notify the supplier. Ask the driver to acknowledge the difference when possible, then follow up for a replacement or credit.
Enter each delivery on the day it arrives, and put any new prices on the sheet before the next count. Then put the delivery where your count route will find it. If a case of 12 bottles of gin is entered as received but sits in the hallway, the count misses it, and gin usage comes out 12 bottles too high.
A spreadsheet or an app
A spreadsheet is enough to start. Our free bar inventory spreadsheet is an Excel file (.xlsx) with plain formulas. Its count sheet lists products in walking order, takes open bottles in tenths and shows the value of each line. Its usage tab works out usage and, once you enter your sales, what went unaccounted for.
But a spreadsheet still leaves two jobs by hand: typing in a paper count afterwards, and turning sales into bottles for every drink. Counting on a phone helps with the first job. Specs that store how much each drink pours help with the second.
How a bar stocktake works in UK pubs
Stocktake is the UK and Australian word for the same count. In a UK pub, an independent stocktaker may do it. ILTSA (the Institute of Licensed Trade Stock Auditors) qualifies these stocktakers. It recommends a stocktake every month for most pubs, and some pubs choose every two weeks or every quarter, depending on their sales and stock. This outside stocktake doesn't replace your own weekly count of spirits.
ILTSA lists what the stocktaker needs on the day:
- your sales, in cash and card
- delivery paperwork and invoices
- records of anything not sold at full price, such as beer lost cleaning the lines, wastage and drinks given away
An allowance is stock that left the bar without a full-price sale. The stocktaker makes an allowance for each item in those records. Then the stocktaker compares the stock used with sales. The result is a surplus or a deficit, and the The menu price of a drink minus what its ingredients cost. (GP) the pub made.
Allowances you forget to declare show a false deficit, ILTSA warns. The more common problem is the opposite: allowances that are too large, so missing stock looks accounted for. Record line cleaning, spills and staff drinks on the shift they happen, so that every allowance comes from a written record.
Mistakes that make a count useless
| Mistake | What it does to the numbers |
|---|---|
| Counting at a different time each period | Periods can't be compared. A busy Saturday lands in one period or the next. |
| Rounding open bottles up to whole bottles | Stock that isn't there now shows up as usage next time. |
| Leaving out the stockroom, fridge or freezer | Stock looks used when it was only moved. |
| Entering deliveries late | Usage jumps in one period and falls in the next. |
| Valuing stock at an old price | Usage in money is wrong, even when the bottle count is right. |
| Leaving house batches off the sheet | The spirits in them show up as usage. |
Questions
How long does a bar inventory count take?
It depends on how many products you stock and how many places you keep them. Two people with a sheet in walking order are much faster than one person working down an alphabetical list. Time your first count and write the time at the top of the sheet, so you know what to plan for next time.
What is the 80/20 rule in bar inventory?
It's a rule of thumb from purchasing, also called ABC analysis: a small share of what you stock often carries most of the money. It isn't a fixed split. In a cocktail bar the money is spread over more products, because most drinks use a liqueur or vermouth as well as a base spirit. So rank your own products by their usage in money, count the top of that list at every count, and check them first when the variance comes in.
Should I count in bottles or in milliliters?
Count in bottles, with open bottles in tenths and one line for each size. Your invoices give a price per bottle, so the sheet turns your count into money directly.
Sources
- Jeffrey Morgenthaler, How to Take Inventory and Calculate Pour Cost. Published April 10, 2014. Counting open bottles in tenths, weighing as the exact alternative, counting while closed.
- Jeffrey Morgenthaler, How to Price a Cocktail Menu. June 16, 2011: "the industry standard usually lies somewhere between 18% and 24%".
- Robert Plotkin, Control Pour Costs and Watch Profits Rise. April 10, 2012. How often to take physical inventory, and the eight causes of a rising pour cost, including poor ordering and receiving procedures.
- Institute of Licensed Trade Stock Auditors (ILTSA), Find a Qualified Pub Stocktaker Near You. FAQ: how often a pub should have a stocktake.
- Institute of Licensed Trade Stock Auditors (ILTSA), How to prepare for a stock audit. What the stocktaker needs: details of business done, purchases, allowances for line cleans, wastage and drinks given away, and a reconciliation against the register.
- Institute of Licensed Trade Stock Auditors (ILTSA), Why use a qualified stocktaker. Surplus and deficit, allowances, and gross profit.
About the authors
Sarah co-founded and ran Teresa Cocktail Bar, a Tales of the Cocktail nominee. She was also the first customer success hire at Loaded and now builds Overproof.