Restaurant Inventory Management: How to Track Stock and Reduce Waste

Poor inventory management is one of the biggest profit killers in South African restaurants. With food making up nearly 30% of operating costs — industry benchmarks put restaurant inventory management and food costs at around 29% of total operating costs in SA — every missing ingredient or wasted portion eats directly into your margins. Add to that the fact that food waste costs the average restaurant 5–10% of food purchases, and it’s clear: if you’re not tracking stock properly, you’re leaking money. This guide gives you a practical, no-nonsense approach to restaurant stock control, from setting par levels and using FIFO to doing accurate counts and using technology so you always know what you have, what you need, and what you’re losing.

Why Inventory Management Matters

Inventory sits at the centre of your food cost. Get it wrong, and your numbers are wrong — which means every decision you make about pricing, purchasing, and menu availability is based on guesswork.

The link between inventory and food cost

Your food cost percentage is calculated from: beginning inventory + purchases − ending inventory = cost of goods sold (COGS). If your inventory counts are inaccurate — items missed, wrong units, or inconsistent valuation — your COGS is wrong and so is your food cost. That makes it impossible to know whether you’re hitting your target (typically 28–35% for full-service restaurants) or bleeding margin. For a deeper dive on hitting and maintaining that target, see our food cost control guide.

Spoilage and waste costs

Food that goes off before you use it is pure loss. Without clear restaurant inventory management — knowing what you have and when it was received — older stock gets buried at the back of the fridge and expires. The 5–10% waste figure isn’t inevitable; it’s often the result of poor rotation and no visibility into what’s close to expiry.

Theft and over-portioning

Regular stock-taking catches shrinkage early. Unexplained variance between what you ordered, what you sold (according to recipes), and what’s left points to theft, over-portioning, or both. If you only count once a month, you’re discovering problems weeks late. Consistent counts create accountability and make it easier to spot patterns.

Better purchasing decisions

When you know your usage patterns and par levels, you order what you need instead of over-ordering (which increases waste and ties up cash) or under-ordering (which leads to stockouts and 86’d items). Good restaurant stock control turns purchasing into a repeatable process instead of a weekly guess.

Running out of key ingredients and having to 86 items frustrates customers and damages reputation. “Sorry, we’re out of the bobotie” might be acceptable once in a while; if it happens often, diners go elsewhere. Inventory management keeps popular items in stock so your menu stays available as promised.

Setting Up Par Levels

Par level is the minimum quantity of each item you want on hand at any time — enough to cover usage until your next delivery, plus a safety buffer. When stock drops to or below par, you order more.

What par levels are

For each ingredient or SKU you track, par is the minimum stock that allows you to operate without running out, assuming normal sales and your usual delivery schedule. It’s not “how much we use in a week” — it’s “how much we need to have so we never run out before the next order arrives.”

How to calculate par

A simple formula:

Par = (Average daily usage × Days between deliveries) + Safety stock

Average daily usage — Total units used over a period (e.g. two weeks) divided by the number of days. Use POS or recipe data if you have it; otherwise use past order and count data.
Days between deliveries — If your supplier delivers every Tuesday and Friday, the longest gap might be three days; use that for perishables.
Safety stock — Extra buffer for busy days, supplier delays, or seasonal spikes. A common rule of thumb is 10–20% of the usage over the delivery cycle, or 1–2 days’ worth for critical items.

Example in ZAR terms

Suppose you use 24 kg of chicken fillet per week (about 3.4 kg per day). Your supplier delivers every Tuesday and Friday, so the longest gap is three days. Safety stock: one day’s usage (3.4 kg).

Par = (3.4 × 3) + 3.4 = 13.6 kg → round to 14 kg.

When your count shows 14 kg or less, you order enough to bring you back to your maximum level (e.g. enough to last until the next delivery plus safety stock), not just “top up to par.” Par is the reorder point; max is the cap so you don’t overstock.

Adjusting for seasonality and events

Par levels aren’t set forever. In December or during a big rugby weekend, usage can double. Before busy periods, raise par (and max) so you have enough stock. After a quiet month, review whether you’re holding too much and adjust down. Revisit par levels at least quarterly.

The FIFO Method: First In, First Out

FIFO (First In, First Out) is the gold standard for rotation in a restaurant kitchen. The idea: use the oldest stock first so nothing sits in the back until it expires.

How FIFO works in a restaurant kitchen

New stock goes behind (or below) old stock. When prepping or cooking, staff take from the front — which is the oldest. That way, the first item that entered the store is the first one used. No tins or packets hiding at the back until they’re out of date.

Labelling: date everything

Without dates, FIFO is guesswork. Put a date received or use-by label on every container, box, and pack that goes into the fridge, freezer, or dry store. Use a standard format (e.g. DD/MM/YYYY) and a label gun or stickers. Train everyone: if it’s not labelled, it gets labelled before it’s put away.

Shelf organisation

Walk-in and fridges: New deliveries go at the back or on the bottom shelf; older stock moves to the front or top so it’s used first.
Dry store: Same principle — new stock behind old. Keep like items together so staff don’t grab from the wrong batch.
Freezer: Date and rotate the same way. Freezer burn and long storage still degrade quality; FIFO applies here too.

Training staff on FIFO

Make FIFO part of opening and closing checks. “New stock at the back, old at the front” should be a rule everyone knows. Include it in induction and refresher training. When someone is caught using new stock before old, correct it on the spot — it’s not nit-picking, it’s protecting margin and reducing waste.

Why FIFO reduces waste

When you use the oldest stock first, you dramatically cut spoilage. Items don’t sit past their use-by date. You also get a more accurate picture of what you’re actually using, because nothing “disappears” in the back of the fridge. Combined with par levels and regular counts, FIFO turns restaurant inventory management into a system that protects both quality and profit.

How to Do a Stock Count

Stock counts are the only way to know what you actually have. Guessing or “eyeballing” leads to wrong COGS, wrong food cost, and wrong ordering.

Frequency: daily, weekly, monthly

Daily (high-value items): Meat, seafood, premium dairy, alcohol. A quick count of these items each morning or after close catches theft and over-portioning fast. Many SA restaurants do a 5–10 minute daily count on top items only.
Weekly (most items): Full count of perishables and key dry goods once a week. Align with your delivery schedule — e.g. count Sunday night or Monday morning so your COGS and par calculations are consistent.
Monthly (non-perishables): Tinned goods, dry pasta, cleaning supplies. Monthly is enough for items that don’t move quickly; you still need a number for COGS and balance sheet.

A practical approach: full count weekly, with a daily spot check on high-value lines and a monthly full audit including dry store and non-perishables.

Physical count vs perpetual inventory

Physical count: You actually count what’s on the shelf and in the fridge. This is the source of truth. Do it when the restaurant is closed (or during a quiet period) so nothing is moving.
Perpetual (book) inventory: A system that tracks “theoretical” stock: you start with opening balance, add purchases, subtract what you’ve sold (from recipes and POS). The difference between perpetual and physical is your variance. Large variance means theft, waste, over-portioning, or counting errors. Technology (e.g. a POS with inventory) automates the perpetual side; you still need physical counts to correct and reconcile.

Tips for accuracy

Count when closed — No deliveries, no prep, no sales. Everything is in one place.
Use consistent units — Decide whether you count in kg, units, or cases and stick to it. Convert to the same unit your recipes and orders use.
Two-person counts — One counts, one records (or both count and compare). Reduces errors and discourages tampering.
Count in the same order every time — Walk the store in the same sequence (e.g. walk-in left to right, then dry store, then bar). Fewer missed items.
Zero out empty spots — If a shelf is empty, write 0. Don’t leave blanks; blanks get forgotten or misinterpreted.

Stock count sheet format

Use a simple table: Item name | Unit | Par level | Quantity counted | Value (R). List items in the same order as your storage layout. Add a row for total value so you can plug the ending inventory into your COGS formula. Keep sheets in a folder or in your system so you can compare week to week and spot trends.

Tracking Waste and Shrinkage

Not all missing stock is sold. Waste and shrinkage — the gap between what you should have used (from sales and recipes) and what you actually used (from counts and purchases) — hide in several places.

Types of waste

Preparation waste — Trimming, spillage, dropped portions, failed batches. Some is normal; excessive prep waste often means poor training or wrong specs.
Spoilage — Food that goes off before use. Usually a FIFO or over-ordering problem.
Over-portioning — Giving customers more than the recipe specifies. Customers might love it, but food cost climbs. Standardise portions with scales and portioning tools.
Theft — Staff or others taking stock. Regular counts and variance reports make it harder to hide.

Waste logs: track every discard

Keep a waste log (digital or on a clipboard). Every time something is thrown away — spoiled, dropped, or over-prepped — log it: date, item, quantity, reason, and if possible the staff member or station. Over time you see patterns: same item always wasted, same shift, same reason. That tells you where to train or change processes.

Calculating waste percentage

Waste % = (Value of logged waste ÷ Total food purchases or COGS) × 100

If you log R8 000 in waste in a month and your COGS is R160 000, waste is 5%. Industry benchmarks suggest 5–10% is common; aim to be at the low end. If you’re above 10%, you have a significant opportunity to improve restaurant inventory management and prep discipline.

Identifying patterns and staff accountability

Review waste logs weekly. Look for repeated items (e.g. “avocados every Tuesday”), repeated reasons (“burned,” “dropped”), or repeated people/stations. Address with training, better specs, or process changes. When staff know waste is tracked and reviewed, portion control and FIFO improve. Don’t use it only to blame — use it to fix systems and support the team.

Supplier Management and Ordering

What you buy and how you buy it affects both cost and restaurant stock control. Good supplier relationships and clear procedures keep quality up and variance down.

Building supplier relationships

Stable suppliers who deliver on time and to spec reduce the need for panic buying and emergency runs. Pay on time, communicate clearly about order cuts or changes, and give feedback on quality. In return, you get better reliability and often better terms.

Comparing quotes regularly

Don’t auto-renew with the same supplier forever. At least once or twice a year, get quotes from two or three suppliers for your top 20–30 items. In SA, fuel and input costs change; so do specials and minimum orders. Comparison keeps you sharp and sometimes unlocks better prices or payment terms.

Order minimums and delivery schedules

Many suppliers have minimum order values (e.g. R2 500 per delivery). Plan your par and max levels around that — you may need to consolidate orders or accept slightly higher stock on some items to meet minimums. Align delivery days with your count schedule so you’re not counting mid-delivery.

Receiving procedures

When the delivery arrives:

Check against the order — Quantities and items match what you ordered.
Check quality — No damaged packaging, no off smell, correct temperature for chilled/frozen.
Check weight/size — Especially for meat and produce; short weight is common and adds up.
Sign only after checking — Note any shortages or quality issues on the delivery note before signing. Once you sign clean, it’s harder to dispute.

This reduces “invisible” loss from short deliveries or poor quality that you only notice when you prep.

Negotiation tips

Order in consistent volumes so suppliers can plan.
Pay on time or early if they offer a discount.
Bundle items with one supplier where possible to increase leverage.
Ask for better prices on high-volume lines or when you commit to a contract period.

Using Technology for Inventory Management

Spreadsheets and clipboards work, but they’re slow and error-prone. Restaurant inventory management software — especially when integrated with your POS — reduces counting errors, automates reorder points, and gives you variance reports that highlight theft and waste.

POS-integrated inventory

When your POS knows your recipes (each dish = X grams of chicken, Y ml of sauce, etc.), every sale can automatically deduct those ingredients from your theoretical stock. You don’t manually subtract what you sold; the system does it. That gives you a perpetual inventory that updates in real time.

Real-time stock levels

Instead of only knowing your stock at count time, you see current levels on a screen. You know when you’re low before you run out. Combined with par levels, the system can flag items that need reordering so you’re not guessing from memory.

Low-stock alerts

Set par (or min) levels in the system. When stock falls to or below that level, you get an alert — email, in-app, or both. You order in time instead of discovering a shortage during service.

Purchase order management

Some systems let you create purchase orders from the same screen: you see what’s low, add quantities, and send the order to your supplier (or use it as a checklist when phoning in). Orders become consistent and traceable.

Variance reports: ordered vs used vs theoretical

After a physical count, you compare:

Theoretical (perpetual) — What the system thinks you have (opening + purchases − sales deductions).
Actual (physical count) — What you really have.
Variance — The difference. Large variance means something is wrong: counting error, unrecorded waste, over-portioning, or theft. Variance reports are one of the most powerful tools in restaurant stock control because they turn invisible loss into a number you can act on.

How Tafela tracks inventory

Tafela links your stock to your recipes and your POS. You define ingredients and par levels, and when items are sold, Tafela deducts the recipe quantities from inventory so you always have a real-time view of what you have. You can log waste so it’s deducted from stock and reflected in reports. When items run low, you get alerts so you can reorder before you 86 a dish. That means less manual counting for the same (or better) accuracy, and variance reports that show exactly where you’re losing product. For a comparison of POS systems that include inventory, see our best restaurant POS comparison.

Inventory Management Checklist

Use this as a quick reference for daily, weekly, and monthly tasks.

Daily

Count high-value items (meat, seafood, premium dairy, key alcohol).
Check use-by dates in fridges and move short-dated items to the front (FIFO).
Log any waste (spoilage, prep, dropped) in the waste log.
Glance at low-stock alerts and place urgent orders if needed.

Weekly

Full physical count of perishables and key dry goods (aligned with delivery schedule).
Reconcile count to perpetual inventory; investigate large variances.
Update par levels if usage has changed (e.g. new menu item, seasonal shift).
Review waste log for patterns; address repeated issues.
Place orders based on par levels and upcoming delivery days.

Monthly

Full count including dry store and non-perishables.
Calculate COGS and food cost percentage; compare to target (see food cost control guide).
Review supplier invoices vs received goods; resolve discrepancies.
Adjust par/max levels for seasonality or events.
Review variance report and follow up on recurring variances.

Frequently Asked Questions

How often should a restaurant do inventory?

At minimum, do a full physical count weekly for perishables and key items, with a monthly full audit including dry store. Many restaurants add a daily count of high-value items (meat, seafood, alcohol) to catch theft and over-portioning quickly. The more often you count, the sooner you spot problems — but balance that against the time it takes. Weekly + daily high-value count is a solid middle ground for restaurant inventory management in South Africa.

What is the best method for restaurant inventory?

The best approach combines physical counts (actual stock on hand) with perpetual inventory (system that tracks theoretical stock from purchases and sales). Use FIFO for rotation, par levels for reordering, and waste logs for shrinkage. Technology that links your POS to recipes and stock (like Tafela) automates the perpetual side and gives you variance reports so you can see where you’re losing product.

How do I reduce food waste in my restaurant?

Implement FIFO so older stock is used first; date and label everything. Set par levels so you don’t over-order. Log waste (prep, spoilage, over-portioning) and review it weekly to fix repeated causes. Train staff on portion control and standardised recipes. Use technology to track what you’re using and alert you before items expire. For more on controlling cost and waste, see our food cost control guide and menu pricing strategy. For power-related spoilage, our restaurant load-shedding guide has practical tips.

Can a POS system track inventory automatically?

Yes. A POS with inventory management and recipe costing can automatically deduct ingredients when you sell a dish. You set up your products, link them to recipes (ingredients and quantities), and define starting stock and par levels. As sales happen, the system reduces stock in real time. You still need physical counts to reconcile and correct the system, but the POS does the day-to-day tracking and can send low-stock alerts and variance reports. Tafela includes built-in inventory linked to recipes and sales, so you always know what you have and what you need.

Conclusion

Restaurant inventory management in South Africa isn’t optional — it’s the foundation of food cost control. With food representing around 29% of operating costs and waste costing 5–10% of purchases, every improvement in stock tracking and rotation protects your margin. Set par levels, use FIFO, count regularly, log waste, and work with suppliers in a structured way. Add technology that links stock to recipes and your POS, and you cut counting errors, automate reorder points, and see exactly where you’re losing product.

Tafela’s built-in inventory management links your stock to your recipes and your POS — so you always know what you have, what you need, and what you’re losing. Get started from R199/mo.