What does Negative Variances mean ?
Opposite to the Positive Variance, Negative Variance means that your Actual Usage was HIGHER than your Theoretical Usage. In other words, your Actual Inventory is LOWER than your Theoretical Inventory. To explain better, here is a quick example:
>You sell Soda Bottles
>You start the month with 40 Soda bottles
>You registered sales of 18 Soda bottles throughout the month
>You received 2 X 24 Soda bottles from your supplier throughout the month
>Theoretically you should have 70 Soda bottles at the end of the month
>You counted 68 Soda bottles at the end of the month
>You then have a -2 Soda bottles variance
How can this be ?
Answers to this questions can be multiple. Unfortunately, we cannot pinpoint exactly the answer for you. Here are possible solutions to help you find where your discrepancies come from.
Do you have to trim your ribeye before portioning it?
Do you have to de-skin your salmon before portioning it?
Make sure you create recipes to take into account the yield of your items
The world-famous "MISC BEV" or his not too distant cousin "MISC FOOD" button will naturally create positive variances, get rid of it.
Not having the specific button for what your employee need to sell, might lead to "punching" the wrong sales item in the POS. (i.e not having a button for "Vodka & Tonic" might lead to staff punching "Gin & Tonic" just to be able to give the bill to the client)
Your team offered a round of drinks to compensate for long entrées wait time?
Did you give a good client free appetizers?
Keep track of them in the Waste Log, using "promo", for example, as the reason.
Make sure you or your team counted the item correctly. Give it a second count just to make sure. Since ending counts become beginning counts, a simple mistake in the end count might come back and create discrepancies in the future.
Don't forget that menu items are linked to your Inventory Items. If the menu items are not linked correctly to your inventory items or recipes are not using the correct inventory items, Negative Variances are sure to become an issue.
Have you returned the merchandise to your supplier? Negative Variance might come from your supplier taking back a product and not giving you a return invoice.
Has your supplier delivered what was supposed to be delivered and in good quantity?
Your weekly cleaning of the walking can generate a lot of variances. Keep track of what you throw away in the Waste Log.
Does your staff know how much cheese they have to put on your pizzas?
Do your bartenders know how much Vodka they have to pour in their drinks?
Do they respect it?
Do they have tools at their disposal to measure(scales, portioned spoons, jiggers) to make sure they respect the standard portions?
Test your staff every once in a while.
Staff meal and freebies
Do you provide food for your staff? Do you give a free beer after shifts? Take note of them in the Waste Log.
Lastly, you should consider theft a possibility. Look out for reoccurring variances and put them on a critical inventory. This will help you run a tighter ship. It will also point to when these reoccurring variances happen. Cross-referencing that information with your schedule might help you draw conclusions.
Negative Variances are the product of mistakes made somewhere. Finding them will allow you to save money instantly. Not rushing to conclusions and using theses steps will help you get answers.