RestoBird Restaurant Glossary • Inventory & Costing
Restaurant Inventory Variance
DefinitionInventory Variance is the dollar or unit difference between theoretical inventory (what should be in stock based on POS sales) and actual physical inventory counted in the restaurant.
Detailed Explanation
When theoretical stock counts differ from physical counts, the gap represents unaccounted inventory variance. Common causes include over-portioning on the kitchen line, unrecorded food waste, spillage, theft, or supplier short-shipments.
Key Calculation FormulaInventory Variance = Theoretical Ending Stock - Actual Physical Stock Count
Why It Matters for Restaurant Profitability
High inventory variance directly erodes gross profit margins. Uncontrolled variance of even 3% to 5% can reduce a restaurant's annual net profit by tens of thousands of dollars.
How RestoBird Solves This
RestoBird tracks real-time recipe depletion directly from POS tickets, automatically calculating theoretical usage down to the gram so operators can pinpoint exact variance sources immediately.