By default, your Variance page is sorted from the highest variance cost to the lowest (either positive or negative). 

As a rule, around 20% of your products will account for 80% of your losses. It’s tempting to go line by line and go through each discrepancy, but focus on the largest ones to start. You’ll make more of an impact on your beverage cost by focusing on these items.

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

  1. Consumption is greater than sales (a negative variance, a loss)
  2. Sales is greater than consumption (a positive variance, a surplus)

Some potential causes include:

Consumption

  • Duplicate bottles
  • Delivery data error (not entered, missing items, misdated)
  • Miscounts (on either opening or closing inventory)
  • Over pouring /  spillage or under pouring

Note: For more information, please see our Troubleshooting Variance - Consumption article.

Sales

  • Missing sales data
  • Incorrect / missing recipes
  • A different item punched in the POS vs what was actually poured (Grey Goose instead of Smirnoff etc.)
  • Archived liquor POS Items 

Investigating a Variance

When investigating an item’s variance, you’ll want to go to the details:

There are three tabs on the details page that you can use to investigate a variance:

  • Sold / Consumed
  • POS Items
  • Item Inventory / Deliveries

Sold / Consumed

This page gives a breakdown of how the sold and consumed values are calculated for the item:

Consumed

In the “Consumed section”, it shows the starting and ending inventory counts, along with any deliveries during that period. You can go into an inventory by clicking the information icon beside them if you need to edit or review the counts by location.

The deliveries value is the sum of any deliveries, returns, and other bottle logs (wastage, promo etc).

These three values are then used to calculate the consumption (Start inventory + Deliveries - End Inventory).

Clicking the icon beside consumption shows you the consumption by location between the two inventories. This is a quick way to see if an area of an inventory was missed. 

Sold

This section shows every Recipe / POS Item that this item is an ingredient in. It shows you the quantity sold, the sales in dollars, the amount of the item sold in ounces and bottles.

You can use this to identify any missing sales data, or see if an item isn’t included in a recipe that it should be, or the size in the recipe is incorrect. 

At the bottom it shows you the total ounces used, and translates it to bottles.

POS Items

Unlike the “Sold” section, this will show you every recipe that this item is used in, regardless of whether there were sales or not.

This is helpful for making sure that your recipes are correct. A common issue is adding recipes with the wrong serving size. For example, mapping 1oz of a beer can instead of 1 full unit will show much higher consumption than sales.

Item Inventory / Deliveries

This tab shows you the complete history of an item. You can see every time it was counted in an inventory, and every time a delivery was received.

You can use this to identify any issues with consumption. If your tab is just full of inventory counts, but no intakes, it is clear you are not adding deliveries for this item.

A good model to follow is to always see an intake in between two inventories (especially if the count increases).

If your count increases from one inventory to another without an intake, you’ll know that you likely missed a delivery (or miscounted that initial inventory).

This is also helpful for identifying any misdated deliveries. 

Summary

The goal is to make sure that your information is accurate, so you can positively identify a variance that is from over pouring, and not an issue with data entry. 

In the case of this Hendrick’s, this looks like a real variance that we could take action on.  

We sold 10.35 bottles based on the recipes and sales, but consumed 12.93 bottles, for a variance of -2.58 bottles.

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