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What are variances and why you should manage them (VIDEO)
What are variances and why you should manage them (VIDEO)
Christopher Wells avatar
Written by Christopher Wells
Updated over a week ago


Obtaining variances is the culmination of a lot of work. It's the goal we are trying to achieve by creating recipes, linking menu items to inventory items and doing counts.

To know exactly what you need to set up in order to get to variance controlling, have a look at our article on steps to get to variance controlling 

A variance is what you are looking for when you do an inventory count. It’s the difference between your actual usage of product and your theoretical usage of product. 

What does this mean?

Actual Usage: What you did use in real life. The result of : 

Beginning Inventory + Purchases - Ending Inventory

Theoretical Usage: What was sold or accounted for in your POS system. In order to get theoretical usage,  you need to link POS sales Items to your inventory items. Piecemeal does that for you. 

If you compare both and see there is a discrepancy, then you have a variance. That variance can be Positive or Negative

Types of variances

Positive | Theoretical Usage is HIGHER than Actual Usage

Congrats ! You have magically created a product. With that said, we know it is impossible. Check out our article on reasons you have a Positive Variance.

Negative | Actual Usage is HIGHER than Theoretical Usage

This means that you used more inventory items than you should have. Nothing to be concerned with just yet. Some investigative work needs to be done in order to clarify those discrepancies. Check out our article on reasons you have a Negative Variance

Confirm those variances

For the moment, consider those variances as alleged. Before you go hunting down Who, What, When, Where, make sure all avenues for error have been studied

Have a look at our variance control case study (coming soon). It might help you turn an alleged into a confirmed variance and prepare you to take action.

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