Better inventory planning can save you thousands of euros per year. Many restaurants buy too much, causing products to spoil, or too little, causing them to miss out on sales. By calculating the financial impact of smarter inventory planning, you'll see exactly how much better planning will earn you.
Why inventory planning costs money (or saves it)
Poor inventory planning leaks money in three ways: products that spoil, emergency purchases at higher prices, and missed sales from out-of-stock items.
⚠️ Note:
A restaurant doing €500,000 in revenue loses an average of €15,000-25,000 per year due to poor inventory planning. That's 3-5% of your revenue.
The four cost items of poor inventory planning
1. Waste from spoilage
Products that expire before you use them. Common loss: 5-12% of your purchases.
2. Emergency purchases
Rush orders from more expensive suppliers or cash-and-carry stores. Often 15-30% more expensive than your normal prices.
3. Missed sales
Dishes you can't make because ingredients are out of stock. Especially painful for popular items.
4. Excess inventory
Money tied up in inventory you don't use quickly. This costs you cashflow.
💡 Example of poor inventory planning:
Restaurant with €40,000 monthly revenue:
- Waste: €800/month (2% of revenue)
- Emergency purchases: €300/month
- Missed sales: €600/month
- Too much inventory: €200 extra cashflow
Total loss: €1,700/month = €20,400/year
How do you calculate your current losses?
Step 1: Measure your waste
Track for 4 weeks what you throw away. Add up the purchase value. Divide by your total purchases for that period.
Formula for waste percentage:
(Thrown away in € / Total purchases in €) × 100
💡 Example calculation:
Measuring for 4 weeks:
- Total purchases: €12,000
- Thrown away: €960
- Waste percentage: (€960 / €12,000) × 100 = 8%
On an annual basis: €960 × 13 = €12,480 waste
Step 2: Count your emergency purchases
Track when you have to buy more expensively because your normal supplier is out of stock or you ordered too late.
Step 3: Estimate missed sales
Note when you can't make a dish due to missing ingredients. Calculate how much revenue this costs you.
Calculating the impact of better planning
Good inventory planning can reduce your waste by 40-60% and virtually eliminate emergency purchases.
💡 Example improvement:
Current annual loss:
- Waste: €12,480 (8% of purchases)
- Emergency purchases: €3,600
- Missed sales: €7,200
After better planning:
- Waste: €6,240 (4% - cut in half)
- Emergency purchases: €600 (90% less)
- Missed sales: €1,440 (80% less)
Savings: €15,000 per year
What does better inventory planning cost?
The investment in systems and time for better planning is minimal compared to the savings.
- Digital system: €25-50/month for inventory module
- Extra time: 30 minutes/day for planning and checking
- Team training: One-time 2-3 hours of instruction
Total costs: approximately €1,000/year. Savings: €15,000/year. ROI: 1400%
⚠️ Note:
Don't start too complex. Begin with your 10 most expensive ingredients. They account for 70% of your inventory value and waste costs.
The cashflow impact
Better inventory planning also improves your cashflow. Less money tied up in inventory means more liquidity for other investments.
💡 Cashflow example:
Before better planning:
- Average inventory value: €8,000
- Turnover rate: 18x per year
After better planning:
- Average inventory value: €5,500
- Turnover rate: 26x per year
€2,500 extra cashflow freed up
KitchenNmbrs and inventory planning
With a system like KitchenNmbrs, you can record ingredient usage per dish and forecast how much you'll need. You'll immediately see which products are running low and can order in time.
The app also helps track expiration dates and minimize waste through FIFO rotation (first in, first out).
How do you calculate the impact of better inventory planning?
Measure your current losses for 4 weeks
Track what you throw away (waste), extra amounts you pay for emergency purchases, and missed revenue from out-of-stock items. Add up the total costs and calculate for a full year.
Calculate your potential savings
Good planning can reduce waste by 50% and emergency purchases by 90%. Multiply your current losses by these percentages to calculate your possible savings.
Subtract the costs of better planning
Add up the costs of an inventory system (€300-600/year), extra time (€2,000/year in labor costs), and training. Subtract this from your savings for the net impact.
✨ Pro tip
Start by measuring waste on your 5 best-selling dishes. These have the biggest impact and are easiest to track.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
How much can I realistically save with better inventory planning?
Restaurants save an average of 2-4% of their revenue through better inventory planning. At €500,000 in revenue, that's €10,000-20,000 per year. The exact savings depend on your current waste.
How long before I see results?
You'll see the first results within 4-6 weeks. Full impact becomes visible after 3 months, when your team is used to the new process and seasonal patterns become clear.
What if I don't have time for complex inventory systems?
Start simple with your 10 most expensive ingredients. Focus only on those the first month. These usually account for 70% of your inventory value and deliver the biggest impact with minimal time investment.
Can I calculate this without a digital system?
Yes, but it takes more time. Use a simple Excel spreadsheet with columns for product, purchase date, quantity, and expiration date. Update it daily and calculate your waste percentage weekly.
How do I know if my waste percentage is normal?
Common waste is between 5-12% of your purchases. Below 5% is excellent, above 12% costs you a lot of money. Fine dining often has slightly more waste due to fresh ingredients.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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