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Why is my variance so large?

What to do if you see an item with a large variance

Nick Neale avatar
Written by Nick Neale
Updated over a week ago

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If you've completed an inventory count and are seeing a large variance that doesn't make sense, don't worry just yet!

It's possible there is just a bit of bad data getting in the way. Luckily, this is generally easily fixed!

Your variance is the difference between what was sold and what was actually consumed.

Whenever looking at variance, it will always come down to one of two cases:

  1. Consumption is greater than sales (a negative variance, which means a loss)

  2. Sales are greater than consumption (a positive variance, which means a surplus)

You want to make sure that your data is accurate so that you can identify whether it is a "true" variance due to overpouring/spillage/theft rather than bad data.

Potential Consumption Issues

Since the variance hinges on consumption data, it's very important to make sure that:

  1. All items are properly counted during inventory

  2. All invoices are added and dated correctly

Miscounted items and missing invoices account for the majority of consumption issues.

You can learn more about investigating variances, and how to fix them here:

Potential Sales Issues

Since the variance compares your consumption to your sales data, it is very important to make sure that:

  • All POS Items are properly mapped

  • No sales data is missing

If a POS Item is unmapped, all sales for that item will not be factored into variance calculations. Without this step, there is no way to associate an item from your inventory to that sales item.

If the POS Item is mapped incorrectly, for example, you assign 2oz to a POS Item instead of 1oz, this will over-represent the amount showing in the sales.

You can learn more about how to fix POS Item mapping and missing sales below:

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