Do You Really Know Your Cost of Goods if You Don’t Take Monthly Inventory?

Taking a monthly inventory isn’t just about counting what’s on your shelves—it’s a powerful tool for understanding your Cost of Goods Sold (COGS) and increasing profitability.

Many restaurant and coffee shop owners track purchases but don’t compare them to what was actually used. Without regular inventory counts, how do you know if your costs are accurate? Are rising food and beverage costs due to supplier price increases, waste, theft, or portioning issues?

Here’s the technical formula for COGS:
📌 Beginning Inventory
➕ Purchases
➖ Ending Inventory
💰 = Cost of Goods Sold

If you’re only looking at purchases and not accounting for what’s sitting on your shelves, you might be missing hidden problems.

By tracking beginning and ending inventory each month, you can:
✅ Identify fluctuations in food and beverage costs
✅ Pinpoint waste and shrinkage (whether accidental or intentional)
✅ Compare actual vs. theoretical usage to improve portion control
✅ Make smarter pricing and menu decisions

Inventory isn’t just a tedious task—it’s a financial health check for your business.

When was the last time you did a deep dive into your cost of goods?

Let’s discuss—what insights has regular inventory tracking given you?