AccuBar or BevInco bar inventory: which service is better? Learn the liquor inventory methods these companies use and how they compare.
WHAT IS BAR INVENTORY AND WHY IS IT IMPORTANT?
Many bar owners have heard of the importance of inventory management. Some heard it directly from the guy who handed the keys over to them when they took ownership. Others heard it professionals such as their accountant. Have you ever been the victim of an audit by your state liquor commission? Are you aware that over 85% of bars and nightclubs exceed the state allowance for shrinkage*? ‘But wait a minute,’ you say, ‘I personally take inventory every week. I’m in great shape!’ Oh really? Perhaps your perspective on this subject will change after I explain the inventory myth known as “tenthing.” In a previous post, I discussed the merits of the BevInco inventory service. This article analyzes how AccuBar and BevInco stack-up. Which bar inventory service is the top inventory service for hotels, restaurants and bars?
THE MOST COMMON BAR INVENTORY METHODS
There are three types of liquor inventory methods:
1. TRADITIONAL METHOD: CLIPBOARD AND SPREADSHEET
Of course, there are many methods people have devised to manage their inventories, but this method employs the most basic techniques, which includes:
- Count full bottles of beer, wine and liquor.
- Estimate the unused portion of all open bottles using the “tenthing” method. This is nothing more than an educated guess as to how many ounces remain in the bottle. In other words, is 10% left, 20%, 30%, etc.*?
- Quantify the unused portion of beer kegs:
- Each keg is manually lifted and shaken.
- The remaining volume is estimated to the closest ¼ keg.
- Again, this is archaic, but it’s common practice.
- Record results on a homemade pre-printed form or enter into an electronic spreadsheet.
* As an example, for quart-size bottles, estimate whether there are 3, 6 or 9 oz, etc., remaining. This is the concept many people use. However, it is anything but accurate.
2. AccuBar BAR inventory audit service
AccuBar is a bar inventory service that takes a slightly more scientific approach. Fundamental to the AccuBar approach is the sophistication of smartphone technology. Here’s how the AccuBar method works:
- The physical inventory is performed exclusively by bar owners or their representatives.
- Scan the UPC codes of all full bottles.
- Utilize the smartphone to measure the remaining liquor in all open bottles:
- AccuBar’s smartphone app utilizes a series of diagrams for each respective brand.
- The diagrams provide a visual aide to estimate the amount of liquor in open bottles.
- Kegs are estimated in the traditional manner described above.
The problem with the diagrams is they use the same “tenthing” system described above.
3. BEVINCO BAR INVENTORY AUDIT SERVICE
BevInco is the only company that offers a full scientific and accounting approach to liquor inventory management. BevInco inventory audit service utilizes the following:
- The physical inventory is performed by either the bar owner or a local BevInco technician.
- Scan the UPC code of all full bottles.
- Using BevInco’s proprietary software and a iPad or desktop computer:
- Weigh all open bottles and keg beer and enter data.
- Enter all drink recipes.
- Weigh all batches and enter data.
TENTHING - THE BIG LIQUOR INVENTORY MYTH
Estimating the amount of liquor in an open bottle by the method known as “tenthing” might seem logical. A diagram with a graduated scale. What could be better? This is the method known as “tenthing.” Wouldn’t it be invaluable to have a template for every liquor brand? After all, tequila bottles have a vastly different shape than whiskey and vodka bottles. The next challenge is consistent measuring. Simply stated, tenthing isn’t reliable because it isn’t scientific. AccuBar uses this system. It’s a grossly ineffective method of measuring. For one, the variance of this method is +/- one-half of the smallest measuring unit. This equates to +/- .5 ounces for scales with one-ounce graduations. Bottle weighing, the method used by BevInco, yields accuracy of +/- 1/32 oz. Weighing far more accurate and consistent. To demonstrate, consider the following sample audit of a single brand:
ACCUBAR OR BEVINCO BAR INVENTORY HEAD-TO-HEAD
|
EVENT
|
ACCUBAR
|
BEVINCO
|
|---|---|---|
|
WEEK 1
|
.9 = 28.8 oz., is entered as 29 oz. by the technician
|
30.4 oz. (bottle weight)
|
|
WEEK 2
|
.9 (same as week 1), is again entered as 29 oz
|
27.4 oz. (bottle weight)
|
|
RESULT (oz.)
|
0.0
|
3.0
|
- If the bottle in question were Johnny Walker Blue, which you are selling at $45 per shot, the AccuBar method would not have revealed that you sold $135. In other words, your inventory would not have tied to your POS.
- What we see in the above example is the result of operator error, which is the multiplication of two 5% errors.
- NOW IMAGINE if you have 200 – 300 open bottles! One week your inventory could be overstated and the next the opposite!
If this pattern were repeated week-after-week, how could any bar owner have meaningful accounting or inventory information? With BevInco, all open bottles and kegs are scientifically weighed – to the gram.** Therefore, the accuracy used by BevInco scales is virtually impunity.
THE VALUE OF LIQUOR BATCHES AND RECIPES
For bar that sell margaritas (by the batch) or multiple-portion cocktails such as the long island iced tea, this should be of interest. How does your inventory method account for these items?
- The clipboard / spreadsheet has no way of accounting for either of these.
- AccuBar has no way of dealing with either of these.
- BevInco addresses both by entering your cocktail and batch recipes directly into their proprietary software. Batches are weighed – to the gram.
Without understanding your current product mix, it’s impossible to calculate your ideal pouring cost percentage.
In other words, the ideal pour cost cannot be determined without factoring your batches and mixed drink recipes.
WHAT YOU DON’T KNOW ABOUT YOUR LIQUOR INVENTORY DOES HURT YOU!
Contrary to the old cliché, not only will ignorance hurt you – it can be crippling your bars’ profits! Proper and thorough inventory auditing is the only answer, the BevInco way. Without ideal pour cost, you can’t understand how much inventory is missing. According to the above-mentioned article, Deibel goes on to say, “On average, a bar is missing 20 percent when it is not calculating its ideal numbers based on the current product mix. This means that practically all bars would be found to be out of compliance (with the state ABC) and would be charged in an audit.”
THE REAL BEVINCO SERVICE - INTANGIBLES
Beyond the superior benefits of their scientific and accounting approach to inventory management, BevInco develops an invaluable consulting role with its clients. They teach their clients how to use their software and conduct inventories. Additionally, they help bar owners isolate their losses and make corrective steps. If you are over-pouring, BevInco will help you learn how to discover this with their software. Because of their commitment in helping their bar owner clients succeed, the local BevInco representative can even help a bar owner understand how to structure drink specials. AccuBar provides none of this assistance.
To demonstrate how bar owners benefit from the BevInco service, I’ve included the first and fourth audits of a new BevInco client (downloadable below).
ACCUBAR OR BEVINCO BAR INVENTORY: WHICH SERVICE IS BETTER?
So which is better: AccuBar or Bevinco bar inventory service? To me, BevInco is the only inventory management service that makes sense.
Downloadables:
Columbus Bar 1st Audit Report
Columbus Bar 4th Audit Report
* Source: BevInco State Audit Brief by Charles Deibel
** One gram = 1/28 of an ounce; the dry weight is converted to fluid ounces through the BevInco software. BevInco has chosen to use a highly-accurate scientific scale (with a deviation of +/- .5 gram), the resulting audit is accurate to within 1/100 ounce.
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