Guide
Bar inventory variance, explained
Variance is the gap between what you used and what you sold. It's the single number that tells you whether product is leaving your bar without being paid for.
What variance is
Every week, two numbers should match. The first is what your counts say you used. The second is what your sales say you should have used. When they don't, the difference is your variance.
Actual usage = last count + delivered − this count
Expected usage = drinks sold × pour per drink
Variance = actual usage − expected usage
Multiply the variance by the cost per ounce and you have its dollar value.
A worked example
Last week you counted 6.4 bottles of vodka. You received 6 more, and this week you counted 7.1. So you used 5.3 bottles, about 134 ounces.
Your POS shows 70 vodka drinks at 1.5 ounces each, so you should have used 105 ounces. That leaves 29 ounces unaccounted for, a little over a bottle. At $28 a bottle, that's around $32 for one product in one week. Across a full back bar, gaps like that easily reach hundreds of dollars a week.
What's a normal variance?
No bar hits zero. Spills, evaporation and small over-pours always leave a gap. Many operators treat a liquor variance within about 2 to 5% of usage as normal, and look harder at anything above that. More useful than one bar-wide number is the list of products with the biggest gap in dollars, since that's where to look first.
Common causes
- Over-pouring. Free pours drift. A 1.75 oz pour on a 1.5 oz recipe is a 17% variance on its own.
- Drinks not rung in. Comps, staff drinks and "one for the regular" that never hit the POS.
- Wrong buttons. A premium pour rung in as a well drink shows up as a gap on one product and a surplus on another.
- Waste that isn't logged. Broken bottles, spills and spoiled wine all look like missing product if no one writes them down.
- Counting and receiving mistakes. A delivery that wasn't entered, or a case counted as a bottle. Check these before you suspect anyone.
- Theft. It happens, but rule out everything above first.
How to bring it down
- Count weekly, at the same time, so the gap can be traced to a week.
- Map every cocktail in your POS to its recipe, so expected usage is accurate.
- Log waste with a reason the moment it happens.
- Use jiggers or measured pourers on the products with the biggest variance.
- Share the numbers with the team. Variance usually improves just because people know it's being watched.
New to counting? Start with how to do bar inventory, then check your prices with the pour cost calculator.
See your variance without the spreadsheet.
Import the sales report from Toast, Square, Clover or any POS that exports a spreadsheet. Bar Ledger lines it up with your counts and shows the unaccounted product, biggest problem first. 14 days free, no card required.