Restaurant inventory 101: top inventory tips for 2025

Running a profitable restaurant is a complex web of related decisions and priorities. Getting a handle on your ingredient usage. Understanding how it contributes to your overall food cost. Getting a bird’s-eye view with accurate inventory. Comparing what you have on hand with what you planned for. Connecting it all together so you have a real understanding of your P&L.

In a perfect world, you’re checking on every item you use in every recipe weekly. But that’s assuming you’re rolling in time and team members to tackle routine checks without complaint. (If you find that world, can you send us directions?)

In the real world, we’re tight on time and resources, juggling 50 things at once and ensuring every guest has a stellar experience. It’s no surprise inventory sometimes falls off the to-do list. Let’s make it easier. Here are our top restaurant inventory management best practices for 2025.

1. Lay the groundwork

First, focus on mindset. This isn’t a fluff tip, promise. Costing out a menu item is one thing, but that number isn’t your actual cost for that item. There could be variations in your recipe. There could be variations in your portioning. There could even be employee theft. And all of these things can change your actual cost.

That’s why inventory is so crucial for restaurant inventory best practices. Not just occasionally but as a persistent habit (even on weeks when you don’t wanna). Just picture it: Better food costs. Less waste. More efficiency. This feels like a sigh of relief, right? That’s what good inventory unlocks (and more!). Ok, let’s keep going.

2. Figure out frequency

Most of us brush our teeth daily out of habit (if you don’t, no judgment… ish). And there are tons of other things we’re doing weekly without a second thought. Your homework for today: Try to make inventory one of those things.

Sure, some businesses can get by with quarterly inventories, but not restaurants. We deal with many highly perishable items, usually ordered on very short cycles. So weekly (or at least monthly) inventory is an ideal best practice. None of us want operational issues that cut into profitability, and a weekly inventory habit is one of the most valuable ways to reduce that chance.

Sound like an uphill battle? You’re in luck. Because you don’t necessarily need to do an all-the-things inventory every week. That’s a labor cost in and of itself, and it can disrupt employee flow unless managed strategically. Instead, we suggest scheduling monthly inventories as a jumping-off point and then adding partial inventories of key ingredients weekly to build the habit.

3. Narrow your focus

Short on time? Try this restaurant inventory management hack. Here’s how: Do a quick count of your top five-ish highest-cost key items before making an order. By using this technique, you can more seamlessly manage waste, maximize profitability and minimize food costs.

Wondering where to focus? Zero in on ingredients with high and variable costs, low and variable yields, and high perishability. We’re talking lobster. We’re talking fresh meat cuts. We’re talking about those treasured short-season, easily bruised peaches. Also, anything that’s high-cost enough to be subject to over-portioning or employee theft, and anything that’s high-volume (even if it’s not super high cost). These are the spots you’ll want to evaluate and watch.

Once you have your shortlist, create partial inventories to track these items every time you place an order. Even when you’re only tracking five or so items that frequently, you’ll quickly start seeing trends in usage and costs—and maybe even build momentum to add more key items to your weekly habit.

Luckily, all of this is easier with a good restaurant management system. The MarginEdge platform lets you easily create partial and full inventories, quickly reveal usage issues by comparing theoretical to actual product usage, and dig deeper with additional tools to reduce costs and increase efficiency.

For more about our favorite restaurant inventory management hack, check out this blog.

4. Track and categorize thoughtfully

Our next rec goes back to how you track invoices—and what that means for inventory. When setting up your inventory count sheets based on your invoices and recipes, look for great automation software to help.

Specifically, you want a restaurant management system (RMS) that takes information straight from your invoices to create customizable count sheets. A good RMS can categorize by product, not vendor item, so you can keep count sheets streamlined and nix the need to update prices manually. Once you have the right tool, you can customize even more, whether by adjusting the metrics in your count sheet to match how your team takes inventory or creating multiple sheets for different restaurant sections (walk-in, bar, etc.).

5. Banish waste

One of the biggest benefits of upping your inventory frequency: getting ahead of over-ordering. Over-ordering can lead to more waste, more time putting orders away and more time organizing your walk-in.

Here’s how to flip that time. Take those extra few minutes you might usually spend sorting and storing, and assign line or prep cooks to inventory each station and the walk-in. Consider creating a waste log (or using an RMS like MarginEdge to help). The more you watch your waste, the more you’ll start to notice key issues or opportunities with recipe planning and actual usage, and you can tweak ordering and accountability at every station from there.

6. Compare theoretical and actual variance

With the right restaurant management system, your inventories will help you dive deeper into managing product usage. Knowing your usage of a particular ingredient is useful—but you need to know theoretical usage by comparison to dig in. A top RMS can pull detailed sales data from your POS, know what you buy from processing your invoices, and have tools for inputting recipes and inventories.

To calculate theoretical vs actual, you’ll need the starting and ending inventory for the period (this is where keeping an eye on waste is key). Then, you’ll need details on any orders you got during that window. From there, use this formula: starting inventory plus incoming orders, then subtract ending inventory. The resulting = your actual usage. And if that number doesn’t match what you were anticipating based on sales numbers, then you have an inventory management problem to dig into.

Not ready to commit to an RMS quite yet? Try this theoretical usage calculator instead.

7. Know your liquids

Liquor inventory used to look like a lot of guesswork and variance from shift to shift. Not anymore. With smart inventory management systems like MarginEdge’s Freepour smart scale, liquor inventory just got weigh easier—and faster. Use Freepour to scan bar codes and quickly weigh each bottle. From there, you can seamlessly sync with the rest of your inventory and purchasing. Freepour knows empty bottle weights, and you can go in any order, so there’s no slow-down at the bar during busy season.

Trusting the precision of your data is everything—and the reality is that eyeballing isn’t a precise art (as much as your regulars insist they can split the G on their favorite pint just going off instinct). Learn more about Freepour.

8. Make it smart (and mobile)

Maintaining products and prices on inventory sheets can take a lot of time. What if you never had to do that again? With the right restaurant management system, products and prices are automatically updated on your sheets as you order, and you can see previous inventory values to track trends. 

In a perfect world, you can take things even further with tools like the MarginEdge app that lets you take inventory counts from your smartphone or tablet, even in spots where Wi-Fi has a mind of its own. The biggest clincher: You can take counts and place orders in the same spot, and everything updates in real-time (bye-bye, clipboards and cross-referencing!).

Have a sad pile of homeless clipboards now? Here’s what to do with ‘em.

Cracking the inventory code

There’s no magic solution to perfect inventory counts and food cost management (believe us, we’re trying our darndest to solve that puzzle). But armed with these strategic inventory best practices, you’ll be ready to fold more valuable inventory counts into your everyday ops more easily than ever before.

And we bet you’ll see the value sooner than you think. Because when you start to truly understand your actual usage, reduce those over-ordering weak spots and optimize food costs, you get that much closer to nailing your ideal COGS and finding the margin sweet spot that works for your restaurant.