Article Contents
Introduction
Variance is the difference between what you sold, and what you actually consumed.
Variance = Sales - Consumption
After your POS system is integrated, and your POS mapping is more than 80% complete, the next time you complete an inventory, you'll receive two reports detailing your variances.
Variance Report - compares the sales and consumption of the inventory period
Variance Overview Report - compares your data over time to track performance
If your mapping isn't over 80% complete, you can also make use of partial inventories. This allows you to count a subset of your items and still get a variance report.
To learn more about variance and partial inventories, please see:
Variance Report
The variance report is sent to each user that has been designated as a recipient. It can also be viewed on the Web Portal.
There are two sections of the variance report:
Summary by Family and Category
This section gives you high level information about the venue overall, and then performance by Family and Category.
There are 4 main components to the summary page:
Venue name, inventory period, and time the report was generated
Overall venue summary
Summary by Family
Summary by Category
At the top of the report, you'll see the inventory period that it covers.
In each section it displays:
Variance Cost ($) - The sum of the Variance Cost for each item. Variance Cost = Cost per Unit * Variance. A negative Variance Cost indicates a loss.
Sales ($) - This represents the sales of mapped POS Items for the selected inventory period. If you have unmapped items you will see a difference between the number here and what is on the "Sales" page. This number doesn't include sales of:
unmapped POS Items
archived POS Items
or any POS Items that contain an item that is marked as "Excluded from Variance"
Cost ($) - How much product was used at cost in the venue during the inventory period. Consumption = Starting Inventory + Invoices - Ending Inventory. This is also known as the Cost of Goods Sold (COGS).
Variance Retail ($) - The theoretical value that the Variance Cost could've sold for based on your POS Item recipes.
Cost (%) - The overall cost percentage for the inventory period. Cost of Sales % = Consumption / Sales
Individual Item Variances
This page provides more detailed information for each item in your venue:
Beginning Inventory (Units) - the count from the starting inventory
Movements (Units) - The sum of all invoices and returns during the inventory period
Depletions (Units) - Any depletions that were added during the inventory period. This subtracts from your total consumption
Ending Inventory (Units) - the count from the ending inventory
Consumed (Units) - (Beginning inventory + Invoices Added) – Ending inventory. In other words, what was used/poured during the inventory period.
Sold (Units) - The number of units sold based on the sales data received from your POS system and using the POS items and recipes you have created
Variance (Units) - Sold (units) - Consumed (units). A negative value indicates a loss, whereas a positive value indicates a surplus.
Variance (UoM) - this shows the variance in the item's unit of measurement (ml, L, oz, etc.)
Variance Cost - The cost of the variance based on the wholesale price (your cost/unit on the Items page).
Variance Retail ($) - The retail value of the variance based on a weighted average of all the POS items that the item is an ingredient. In other words, what the variance cost would have sold for
Cost % - The cost percentage of the item. Cost % = Consumption / Sales
Interpreting the Data
When looking at the variance report, you want the Variance (units) and Variance (UoM) to be as close to zero as possible.
As a reminder, Variance = Sales - Consumption
Whenever looking at a variance:
If it's a negative number, consumption is greater than sales (a loss)
If it's a positive number, sales are greater than consumption (a surplus)
Your goal is to make sure that it's a genuine variance, and not because of a data error.
In the example below, we sold 2.17 units, but consumed 2.89 units. This gives us a variance of -0.72 units. The value of the variance at cost is $-18.37 (in other words, a loss). This represents $99.06 in potential lost sales.
If an item has a variance, you must check that the consumption and sales are accurate.
Consumption
As a reminder:
Consumption = Beginning Inventory (Units) + *Movements (Units) - Ending Inventory (Units).
*Note: Movements is the sum of all invoices, returns, and depletions
If either inventory count is inaccurate, or you have missed or made an error on an invoice, that impacts consumption.
In the example below, we have a variance of 11.55 units of the Pelee Island Shiraz / Cabernet. We sold 8.55 units, but our consumption is -3 units.
Since the consumption is negative, that shows there is a stock error. Our ending inventory is higher than the beginning inventory, but we have no movements to account for it.
This looks like we received more of this product, but didn't add the invoice for it. In this case, the variance is due to a data error. By adding the invoice to add 1 case of 12 units, and regenerating the variance report, we now only have a slight variance of -0.45 units.
For more information, please see:
Sales
When checking sales, you want to make sure the item is mapped to all POS Items it's sold in, the serving size is correct, and that there isn't any missing sales data.
For more information, please see:
Variance Overview Report
This report is a combination of the summary dashboards available on the WISK Web Portal. This report gives insights into your venue's performance over time and any trends in variance.
There are three sections in the Variance Overview Report:
Overview
The Overview section provides insights into your performance for the inventory period, and compares it to the past to spot any trends.
To learn more about the overview section, please see:
Variance
The Variance section provides an in-depth look at how your variance cost is calculated. With this data you can see where your problem points are, including which items are most responsible for your losses.
To learn more about the variance section, please see:
Inventory
The Inventory section compares the beginning and ending counts in the selected inventory period, and provides a breakdown of the consumption (COGS). It also shows the progression of your inventory durations / counting times
To learn more about the inventory section, please see:
Viewing Variance on Web
For more information about viewing your variance on the WISK Web Portal, please see:
Note: For more detailed information, please see the Variance Section of the Help Site.