After importing your sales data, adding your recipes, and having at least 2 completed inventories, you’ll be able to see your variance on the WISK Web Portal:
- Click on Reports / Analytics on the left-hand menu bar
- Click “Variance”
What is Variance?
Variance is the difference between what was sold in your POS, and what was actually consumed/used during an inventory period.
Variance is important because it allows you to identify your losses. You’ll be able to see for each item, how much product you should’ve consumed based on your sales data and POS Item mapping, and how much you actually consumed based on your inventory count/invoices.
For example, if you sell 10 shots of Jameson in your POS, and have mapped “Jameson Shot” to use 1oz of Jameson 750ml, you sold 10oz worth of product. When you take your inventory, you find out you have consumed 20oz of Jameson 750ml.
Variance = Sales(oz) - Consumption(oz)
In this case, Sales (10oz) - Consumption (20oz) = Variance (-10oz)
A variance of -10oz indicates a loss. You sold 10oz worth of product but actually used double that, which increases your beverage cost.
By reducing your variances, you’ll reduce your beverage cost and increase profitability.
Note: Your variance is only accurate if your sales and consumption data is accurate and complete. It is important that you are entering accurate inventory counts into WISK and add all of your invoices. Even a single missed invoice will throw off your data.
How is Variance Calculated?
As mentioned above, Variance = Sales(oz) - Consumption(oz)
Your variance displays for each item as units, and can also display as ounces.
In the image below, based on the sales data and recipe mapping, we sold 32.14 units of Belvedere (750ml), and consumed 48.16 units (based on the inventory count and invoices)
In this case, the variance is -16.02 units (or -406.26 oz). Since it is negative, this indicates a loss.
We then calculate the Variance Cost by taking the cost / unit that you have assigned to the item and multiply that by the variance. This provides the dollar value of the variance, which is -$679.22. It’s a negative number because it represents a loss.
The Variance Retail column is based on your sales items and mapping. This shows what the product could’ve sold for, in this case, the 16 units of losses amounted to a theoretical loss of sales of $2665.78
Note: If you have a positive value for your variance, this means that you sold more product than you consumed. This could be due to an issue with your recipe mapping, or a different product was being poured than what was sold (For example, sold Smirnoff, but poured Grey Goose).
Checking a Variance
In this case, since this is a large negative variance, we want to make sure that our consumption and sales data is accurate to see if it’s a real variance or a data error.
By clicking the details button on the far right, we can get more information to make sure we have entered all of our invoices, that the counts are accurate, and make sure that the POS Items have been mapped correctly.
You can learn more about investigating variances here:
Reasons for Variances
Variance is complicated because there are many variables involved. If just one variable in the equation is off, it can misrepresent your numbers.
A variance most often occurs if you are pouring more than you are selling, but other reasons why you could see a positive or negative variance include:
- Issue with an invoice (not entered, wrong date, missing items, added more than once)
- Miscounted items in either opening or closing inventory
- Missing sales data
- Incorrect POS Item/recipe mapping
- Archived POS Items
- Punching the wrong Items when sold
- Duplicate items in your venue
You can learn more about the reasons for variances and how to troubleshoot them here: