Restaurant Inventory Management Software: What to Know

For any restaurant, smooth inventory management is crucial for profitability and guest satisfaction. Yet, manual inventory tracking is often tedious and time-consuming. You simultaneously consider stock orders, storage, usage, and deliveries. Such complexity is why busy restaurants lean on inventory management software. 

Within one tool, you can find stock usage data, reduce food waste, and projections for future inventory needs. Use your data to create a balance between ordering enough supplies to meet demand without over-purchasing and creating waste. Meanwhile, you can then provide a top-notch experience for your guests and devise a strategic restaurant marketing plan.  

This article discusses how inventory management software can aid your restaurant in improving operational efficiency and profit margins.

Understanding Restaurant Inventory Management Software 

Restaurant inventory management software is a digital tool that helps your business accurately and efficiently manage inventory levels, orders, and sales. It makes the day-to-day coordination of goods simpler. Here are the five main features of inventory management software: 

1. Inventory tracking: Capture everything from raw ingredients to nonfood stock within the software for real-time inventory numbers. 
2. Cost reports: Track the inventory cost of beginning stock, goods sold, and ending stock to understand cost of goods sold (COGS) compared to profit margins.  
3. Identify food waste: Discover which recipes tend to create the most waste so you can adjust order quantities and improve your restaurant’s margins.   
4. Order management: Automatically optimize stock order quantities and timing based on real-time forecasts and fluctuations in inventory levels. 
5. Menu management: Project how menu updates may alter your inventory orders and which menu items are the most profitable. 

A great inventory management system is an all-in-one platform – providing solutions for real-time inventory insights, ordering trends, and projected needs, and much more. Start with the aforementioned list when shopping for software. 

5 Advantages of Using Inventory Management Software 

Inventory management software bolsters your restaurant’s efficiency. Not only does it streamline internal operations, but it also prevents waste and offers significant cost savings. Let’s look at five ways this software improves inventory management: 

1. Data-driven forecasting: Gain reliable insight into your future inventory needs based on current stock usage, online ordering trends, and waste data. 
2. Improved vendor management: Provide your trusted vendors with accurate stock orders well in advance and continue strengthening your relationship.  
3. Automated inventory resupply: Receive alerts on inventory discrepancies, low stock, and potential overorders. 
4. Reduction in food costs: Know precisely how much to order for each ingredient to reduce waste and boost profit margins.  
5. Accurate inventory management: With real-time and reliable stock counts, you only order what you need when you need it.

A restaurant with smooth operations is better able to meet the needs of its guests. For example, a leading restaurant inventory management platform, Restaurant365, leveraged its technology to support Five Guys Franchise.  

The restaurant chain’s rapid growth created discrepancies and a lack of clarity into its ability to track inventory numbers, control costs, and reduce food waste. It needed an inventory management system to accurately track operating expenses.  

With the help of Paperchase by Restaurant365, Five Guys boosted its net profit by 6%. It gained crucial insight into cash flow and unnecessary expenses, which allowed it to keep up with growing customer demand.  

Restaurant365 is one example of an inventory management tool. It’s important to review your unique needs and select software that meets them.  

How to Choose the Right Restaurant Inventory Management Software 

First, take stock of your priorities, needs, and current operational gaps. These areas of improvement will inform which inventory management software features you should seek out. In addition to your unique priorities, have these five factors in mind when selecting the right inventory management software for your business: 

1. Point-of-sale (POS) compatibility: Integration with your restaurant POS software ensures purchase data flows into the inventory management software to maintain accurate stock tracking. 
2. Data analytics and reporting: Aggregated data from across your restaurant, including in-person and online ordering, grants you a clear look into areas of inefficiency, waste, and opportunities for improvement. 
3. Intuitive functionality: An easy user experience avoids a lengthy set-up and training time. It also ensures your team uses the software to its utmost ability for maximum benefits.  
4. Customizable features: There is no one-size-fits-all approach for inventory management tools. Choose software with robust, customizable features and a long list of integrations so it fits your needs perfectly. 
5. Integrates with loyalty software: Track inventory counts and purchasing trends for the exclusive menu items offered to your loyal guests. Coupled with sign-up and guest engagement metrics, you’re better able to accurately order stock.

Good inventory management software functions well for your current restaurant size and scales to accommodate growth. In addition to standard software features and functionality, consider these three factors when evaluating software based on the size of your restaurant:

1. Specialized features: Some inventory tracking tools offer features unique to a given niche, such as expiration date tracking.  
2. Affordable prices: The right inventory management software needs to fit within your budget both now and in the future.  
3. Customer support: You may need to lean on customer support to resolve problems and answer questions quickly, depending on the size of your business. 

Once you’ve decided which features and functionality you need from inventory management software, it’s helpful to explore a handful of the best options. 

Best Restaurant Inventory Management Software 

There are tens of inventory management tools available for your consideration. However, to help simplify the decision-making process, we’ve collected three of the top options here: 

1. Restaurant365

Restaurant365 handles everything from inventory to back-of-house operational management all within one intuitive platform. It breaks down menu item costs per ingredient. Inventory managers can automate recipe costing, track item transfers, uncover patterns in food waste, and compare real-time to projected food costs. 

Users regularly praise the software’s ease of use and comprehensiveness. However, the greatest deterrent for most is often the price. Compared to other inventory management tools, Restaurant365 tends to be pricier. 

2. MarketMan

MarketMan documents inventory count, vendor invoices, recipe costs, and COGS all within one easy-to-use platform. In just a few clicks, users log into their dashboard to gain real-time insight into inventory numbers. The platform’s automation saves time. Meanwhile, clear charts and graphs communicate opportunities for data-driven growth. 

According to reviewers, small restaurants tend to find greater benefit from MarketMan. It’s more affordable than other options without sacrificing quality features. For those curious about the tool before investing, a free trial is available.  

3. Zitlin

For restaurants just getting started or working with a strict budget, Zitlin is the best option. It’s entirely free and offers a suite of features to cover inventory management basics. The tool seamlessly captures inventory data and guest behavior. Use these insights to make smart decisions to boost profits and perfect the guest experience. 

Overall, Zitlin is the perfect jumping off point because you get acquainted with inventory management, your needs from the software, and discover areas of the greatest potential profit within one platform.

Restaurant Inventory Tracking Software 

As we’ve covered so far, restaurant inventory management software is a comprehensive system that covers ordering, recipe management, food waste analysis, and stock trends. Restaurant inventory tracking software is a simplified version of this tool that focuses on recording stock levels.  

You may gravitate toward stock tracking software if you run a small-to-medium restaurant or want a more hands-on approach to inventory management. To help you make an informed decision, here are three qualities you can expect to find in a good inventory tracking tool: 

1. Basic stock levels: Keep an accurate count of sitting inventory within one tool.
2. Low stock alerts: Receive an alert when an item runs low.
3. Barcode scanning: Manage stock count by scanning items into the software.

Inventory tracking software covers the basics of stock counting and management. It’s often used across different industries and types of businesses. Yet, depending on your niche, a specialized restaurant inventory tracking tool could be the best choice.  

For example, say you run a restaurant on a local farm that also offers seasonal cooking classes. You need to manage stock for both the restaurant and classes. 

A specialized tracking software that captures expiration dates, changes in orders due to seasonal produce, and varying quantities depending on class enrollment is most beneficial. Find specialized software created with this kind of functionality in mind. 

Implementing Restaurant Inventory Management Software 

After selecting which software is best for your restaurant, it’s time to roll out the new tool. These are five core steps you’ll likely take during implementation: 

1. Integrate the software with your existing technology: Connect the new and current software to ensure your inventory data is accurate and in one place.  
2. Establish a routine for counting inventory: Choose when and how you’ll count inventory, then stay consistent for accurate results.  
3. Train your staff: Work with your inventory management staff to learn the new tool and invite them to experiment with its functionality. 
4. Import menus to the software: Make sure your current menus and stock are captured within the new software so it can accurately track and forecast.  
5. Set up data collection: Select which metrics to track and ensure they’re ready to start aggregating data when you implement the tool. 

Good restaurant inventory management software is easy to learn and master. However, it’s still important to know the hurdles you may encounter. Here are four common challenges that arise during implementation and how to overcome them: 

1. Incomplete or inaccurate starting data: Import your current data into the new software and ensure it’s as comprehensive as possible. Pull information from your vendors, POS, online ordering platform, or any other place where inventory data lives.  
2. Incomplete staff training: Grant the individual who handles inventory for your restaurant ample time to learn the new software. Ideally, they can place orders, understand data, and solve challenges with ease. 
3. Seasonal menu changes: Updates to your menu might change what and how much you order from vendors. Plan for special events, seasonal menus, and other changes that alter your inventory management.  
4. Inventory data living in multiple places: If data exists in various places, there is an increased risk of inventory variance and error. Integrate all your tools to ensure your inventory insights are accurate.

The introduction of any new tool to your restaurant creates a learning curve. However, intuitive software makes the implementation process simple. You’ll be optimizing your inventory in no time.  

Optimizing Your Inventory with the Right Software 

Inventory management software solves many challenges for your restaurant when used well. Use these four tips to make the most of the tool: 

1. Take stock at the same time every day: Count and update inventory at the same time every day, ideally before opening or at the end of the day, to ensure your numbers are accurate.  
2. Avoid taking inventory during delivery times: Deliveries change your inventory count, so avoid officially logging numbers while receiving new stock. Instead, schedule time to manage inventory once your deliveries are complete.  
3. Track food waste: Set up metrics to track the cost of goods sold (COGS) and recipes. By examining this data, you gain insight into areas of spoilage or food waste. You can then create a precise action plan to resolve the problem and boost revenue.  
4. Use the first expiring, first out (FEFO) approach: Capture delivery and expiration dates in the software to know how to optimize ingredient usage. This strategy supports the goals of reducing spoilage and saving money.

A fully optimized restaurant inventory management tool grants you a bird’s-eye view of everything happening across your inventory. With more data you have on hand, the better you can make impactful decisions for your restaurant.  

4 Trends to Watch for in Restaurant Inventory Management 

The evolution of restaurant inventory management will likely reflect a push for greater efficiency to boost profitability. These four emerging restaurant technology trends may alter how you handle inventory: 

1. Automated inventory management: Software that assesses inventory and places orders automatically without direct human intervention. 
2. Feature customization: Restaurants desire personalized dashboards that track specific metrics based on unique goals.  
3. AI-powered inventory forecasts: Project future inventory needs with greater precision based on guest purchases and buying habits.  
4. Automated data collection: Data will continue to be a crucial part of a restaurant’s ability to make smart business decisions. 

When used strategically, trends can help boost profit margins. Additionally, by leveraging the latest technology, you provide guests with a memorable experience, making it more likely for them to become loyal customers.  

The Bottom Line 

With all the options available, choosing the best restaurant inventory software may feel overwhelming. It’s important to know your specific needs from the tool. Use the info in this article to narrow down which software is truly best for your restaurant.  

In addition to your current needs, it’s worth considering your future operational goals and long-term growth. An inventory management tool that scales is crucial. A fully optimized software will help you boost profits and improve guest loyalty. Explore our 2024 Loyalty Guide for greater insight into how you can offer a memorable experience for your guests.  

Finally, if you’re ready to expand guest engagement opportunities and leverage data to market your restaurant, schedule a demo with us today. You’ll gain a personalized solution to driving customer satisfaction and profitability.