The purchase value of your inventory is the amount you've invested in all the products currently in your kitchen. Calculating this gives you insight into how much capital is tied up and helps you optimize your cash flow. In this article, you'll learn step by step exactly how to calculate it.
Why calculate inventory value?
Your inventory is money that's tied up. Too much inventory means your cash flow is under pressure. Too little inventory means the risk of running out of stock. By regularly calculating your inventory value, you get control over this capital.
💡 Example inventory value:
An average restaurant has:
- Meat/fish: €2,400
- Vegetables: €800
- Dry goods: €1,200
- Beverages: €1,800
Total inventory value: €6,200
Three methods to calculate inventory value
There are different ways to determine your inventory value. The choice depends on how accurate you want to be and how much time you have.
Method 1: Physical count (most accurate)
With this method, you literally count everything that's there and multiply it by the purchase price. This is the most accurate but takes the most time.
- Count all products per category
- Note the quantities
- Multiply by the last purchase price
- Add everything together
Method 2: Sample count
With a sample count, you only count the expensive products and estimate the rest. This is faster but less accurate.
⚠️ Note:
Always count your most expensive products exactly. Meat, fish, and alcohol can quickly add up to hundreds of euros in difference.
Method 3: Accounting method (purchases minus sales)
This method uses your purchase and sales data to calculate inventory. Inventory value = Beginning inventory + Purchases - Sales (at purchase prices)
Practical tips for accurate counting
A good inventory count requires system. Here are the most important tips:
- Always count at the same time (for example, Monday morning)
- Use a fixed route through your kitchen
- Write everything down immediately, not from memory
- Work with current purchase prices, not old prices
💡 Example calculation:
Salmon in the cooler:
- Quantity: 3.2 kg
- Purchase price: €18.50 per kg
- Value: 3.2 × €18.50 = €59.20
How often should you calculate inventory value?
The frequency depends on your type of business and turnover:
- Weekly: With high turnover and fresh products
- Bi-weekly: For most restaurants
- Monthly: With stable inventory and lower turnover
Digital help with inventory value
Manual counting takes a lot of time. That's why many restaurants use apps like KitchenNmbrs to keep track of their inventory. You enter your ingredients and prices once, and the app automatically calculates the total value.
💡 Benefit of digital:
Instead of 2 hours of counting, you do it in 20 minutes. You only need to update the quantities, the prices and calculations happen automatically.
How do you calculate inventory value? (step by step)
Make an overview of all inventory
Walk through your entire kitchen and note all the products you see. Divide into categories such as meat, fish, vegetables, dry goods, and beverages. This gives you structure and prevents you from forgetting things.
Count the quantities per product
Measure or weigh each product and note the exact quantity. For meat and fish: weigh it. For bottles: count the number. For dry products: estimate the percentage of the package that's left.
Multiply by the purchase prices
Get your latest invoices and look up the current purchase prices. Multiply each quantity by the corresponding price. Add all amounts together for your total inventory value.
✨ Pro tip
Always count at the same time of the week, for example Monday morning before the new delivery. This gives you comparable figures and lets you see trends in your inventory value.
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 often should I calculate my inventory value?
For most restaurants, bi-weekly is ideal. With high turnover or lots of fresh products, you can count weekly. With stable inventory, monthly is sufficient.
Should I also count discounted products?
Yes, but calculate with the actual value. If you need to mark down meat by 50% because it's near its expiration date, count 50% of the purchase price.
What if I don't remember the purchase price?
Then use the last known price from your supplier. Check your last invoice or call your supplier for the current price. Estimating is inaccurate.
How much inventory value is normal?
A rule of thumb is 1-2 weeks of turnover in inventory. With €20,000 weekly turnover, your inventory value should be between €20,000-€40,000. More is often too much.
Can I have inventory value calculated automatically?
Yes, with apps like KitchenNmbrs you can enter ingredients and prices. You then only need to update quantities and the app automatically calculates the total value.
📚 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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