How to Do a Restaurant Inventory Count That Produces a Usable Food Cost

By Marji · Published September 29, 2026 · 5 min read

Count every food storage area at the same point each period, in the unit you buy, then value each item at its current invoice price. Period food cost is opening inventory plus purchases minus closing inventory, so a count taken at the wrong time, in the wrong unit or at stale prices makes that number wrong. Count high-value items weekly.

Every period number a kitchen runs on — food cost percentage, inventory turnover, the gap between ideal and actual food cost — takes the closing count as an input. On $24,000 of weekly food sales, a count that is off by $240 moves the week's food cost by a full point, and the error comes back the following week in reverse. The procedure below is about making the count boring and repeatable.

Set up the count sheet once

List items by storage area and in shelf order — walk-in, reach-ins, freezer, dry storage, bar — so the counter walks the room once instead of hunting down a list.
Give every item one count unit: the unit you buy it in, or an exact fraction of it. A case of six 5 lb bags is counted in cases and tenths, or in pounds — never sometimes one and sometimes the other.
Write the pack size beside each item, so a count in cases converts to the unit your price is in.
Add a price column from the latest invoice you have accepted for that item, and a category column (produce, protein, dairy, dry, frozen, bar, supplies) so each category can be read on its own.
Keep non-food supplies on their own sheet, or at least their own category, so they do not inflate food inventory.

Run the count

Count at the same point every period — after close on the same day is the easiest — and before the next delivery is put away.
Set the cut-off: anything delivered after the count belongs to the next period's purchases, not this period's closing inventory.
Work in pairs where you can: one person counts and calls out, the other writes. It is faster and catches misread units.
Count full cases first, then partials. Record opened bottles and containers in tenths, and weigh loose bulk items.
Count prepped items — sauces, braises, portioned proteins — at their batch or portion cost, and do not count the raw ingredients they were made from again.
Check dates as you go. Ready-to-eat food past its date mark comes off the shelf and goes on the waste log, not into inventory; the par level guide explains the Food Code's seven-day limit.

Value it

Inventory value

Σ (count × unit cost)

IRS Publication 538 describes the cost of purchased goods as "the invoice price minus appropriate discounts plus transportation or other charges incurred in acquiring the goods." Whatever basis you choose, use the same one every period.

Hypothetical closing count, first six lines of a longer sheet
Item	Unit	Count	Unit cost	Value
Ground beef, 80/20	lb	42	$4.60	$193.20
Chicken breast	lb	60	$3.40	$204.00
Salmon fillet	lb	18	$11.50	$207.00
Mozzarella	lb	24	$2.75	$66.00
Olive oil, 3 L tin	tin	3.4	$31.00	$105.40
Braised short rib, prepped	portion	22	$4.10	$90.20
Remaining 118 lines	—	—	—	$5,434.20
Closing inventory	—	—	—	$6,300.00

Period food cost

Opening inventory + purchases received − closing inventory

With a $6,100 opening count, $7,900 of food purchases received in the week and the $6,300 closing count above, the week used $7,700 of food. Against $24,000 of food sales, food cost is 32.1%.

IRS Publication 538 makes the same point for businesses that keep inventory on book records: "You must take a physical inventory at reasonable intervals and the book amount for inventory must be adjusted to agree with the actual inventory" (IRS Publication 538, under Perpetual or Book Inventory). Many independent restaurants qualify as small business taxpayers, who under the same publication "can choose not to keep an inventory" for tax, so ask your accountant which inventory method, if any, your return uses. The weekly management count and a year-end count can use the same sheet either way.

Errors that break the number

Worked example · One unit mistake, one week

Mozzarella on the shelf: 3 cases of 6 × 5 lb = 90 lb
Written on the sheet: 3, priced at $2.75 per lb
Value recorded: $8.25 instead of $247.50
Closing inventory understated by: $239.25
Effect on the week's food cost: +$239.25, about 1.0 point on $24,000 of sales

Next week's opening inventory inherits the same error and pushes food cost the other way — which is why a single bad count looks like two bad weeks.

Units that drift. Cases one week, pounds the next. Fix the count unit on the sheet, not in the counter's head.
Missing areas. A second freezer, the bar's back stock or an off-site storage unit left out of one count and included in the next.
Timing. Counting before a delivery one week and after it the next moves the whole delivery between periods.
Stale prices. Valuing at last quarter's prices hides the change the count was meant to reveal. Update the price column from recent invoices.
Double counting prep. Counting both the braise and the raw beef it was made from.
Mixing in non-food. To-go containers and cleaning supplies counted as food raise food inventory and lower food cost.

How often to count

Rank the sheet by value once. Count the lines that hold most of the money — proteins, seafood, cheese, alcohol — every week, so food cost and shrinkage can be read weekly while memories are fresh. Count everything at month end, and at year end for your accountant. The gap between the week's actual food cost and what your recipes say it should have been is the next step; the ideal versus actual guide explains how to read it.

Marji does not count inventory. What it keeps is the accepted invoice price for each ingredient — the price column a count sheet needs — and recipe costs for the theoretical side of the comparison.

How often should a restaurant take inventory?

Weekly for the high-value lines if you want a weekly food cost, and in full at least monthly. Whether your tax return needs a year-end count depends on the inventory method your accountant uses — Publication 538 lets small business taxpayers choose not to keep one — so ask before year end.

What price should I use to value inventory?

A consistent one. Each item's latest invoice price, net of discounts and including delivery charges, is simple and close to the FIFO assumption. Changing the basis between periods moves food cost without anything in the kitchen changing.

Do I count prepped food?

Yes, at its batch or portion cost — and do not count the raw ingredients already used to make it.

Should the bar be counted separately?

Yes. Keep beverage inventory on its own sheet or category so a slow-moving wine list does not hide what the kitchen is doing; see pour cost for the bar's version of the calculation.

Compare the count with your recipes

Enter the theoretical food cost from recipes, the actual cost from your count and food sales. See the variance in dollars and points.

Calculate the variance