Month-end inventory: how to do it reliably

The month-end inventory closes the period's food cost and checks that actual stock matches theoretical stock. If the count is inaccurate or inconsistent, the resulting number is not useful for any decision: it is just a figure to fill in a spreadsheet.

Why a fixed cadence matters

The full count should always happen on the same day of the accounting cycle, with the venue closed and before new deliveries arrive. If one month you count on the 28th and the next on the 3rd, you are comparing periods of different length: month-on-month comparisons lose their meaning.

Paired counting: why it works

Counting in pairs, one person counting and one writing, significantly reduces transcription and double-counting errors. This is not just good organisation: in a store with hundreds of items, a single misread line can distort the final value more than it seems.

1. A fixed route, area by area, always in the same order
2. The counter reads product and quantity aloud, the writer repeats it before recording it
3. Units of measure are agreed beforehand, never improvised mid-count
4. Open or partial items are estimated with a written rule, applied the same way every time (e.g. half bottle = 0.5)

Valuing stock: which price to use

Inventory value is obtained by multiplying counted quantities by the most recent purchase price, not by a historical average that may no longer reflect current price lists. If a supplier raised prices mid-month, use the latest invoiced price for the closing valuation.

Common mistakes to avoid

• Counting while the venue is open, with stock moving during the count
• Including goods already delivered but not yet booked in the system (or, the other way round, wrongly excluding them)
• Changing the unit of measure for the same item from one month to the next
• Eyeballing low-value items to save time, but skewing the total across many small lines
• Not recording the exact date and time of the count, making it impossible to check for deliveries that happened in between

What to do with the variance

A gap between theoretical and actual stock is not something to just correct on paper: it is a signal. If it is small and stable month after month, it probably reflects a normal margin of waste or portioning variance. If it grows or moves to a different category, it needs investigating before the next month, not filing away with the rest of the data.