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When it comes to the profitability of your hotel it’s easy to focus solely on sales. Selling more rooms per month, or year, can easily inflate turnover. Unfortunately this doesn’t necessarily mean more profit.
Focusing on the margins of every area of your hotel is a better way to increase profitability, and reduce losses. By tightening up how profitable you are across every area, whether that’s the recipes in your hotel restaurant, how many drinks are wasted in the bar, or how much linen you need, you can easily make a big difference to the success of your hotel.
What do all of these areas have in common? They’re related to good inventory management.
What is the hotel inventory management process?
Within the hotel industry inventory management refers to the allocation and management of the hotel’s resources. This is often related to room inventory; how many rooms are sold, the price at which they’re sold, and the rooms still available.
However inventory management also refers to other areas within the hotel such as stock management within the hotel’s lounge areas, bars and restaurants. This includes managing stock such as raw drink and food items, as well as recipes (for food menu items as well as beverages such as cocktails) and even inventory management of items such as bed linen, cleaning supplies or the beauty products allocated to each room.
Which, as you can imagine, is no easy task! Staying on top of what stock you have available, in which area, how much is being used and what needs replacing or ordering is a huge task. This is why there are now dedicated software systems to help with inventory management.
How does inventory management software help improve your hotel’s systems?
When we speak to many of our hotel customers they’re often using extremely manual, time-consuming inventory management processes. This may involve pen and paper (yes really!), counting every bottle of shampoo by hand. The next step may involve inputting all of these manual counts into an Excel spreadsheet. The trouble with both of these processes is that they’re extremely manual, putting a huge drain on time and resources. There’s also a ton of room for error meaning that you may never truly know the accurate count of stock items in any one area.
Without a true inventory count it’s impossible to tighten up areas to improve profit, or reduce waste.
However when you have a proper inventory management system in place, using an app or piece of software, there are huge benefits to every area:
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Reduced manual error
With an inventory management system like growyze for hotels, stock items are counted by scanning the barcode of each item. This leaves little room for counting errors as an item is only logged once its barcode has been physically scanned. Similarly, all invoice and delivery notes are stored in one place, with automated validation between what’s been ordered, and what’s arrived.
This means you’ll never again pay for stuff you haven’t received. Matching products to a delivery note allows you to spot in seconds any discrepancies between items you’ve received and items you’ve been charged for.
This ensures information is cross-referenced across suppliers and systems helping you to pick up on errors. Which leads us onto…
Issues caught and analysed more easily
Whether it’s too many items being wasted due to spoilage or the wrong number of items being delivered by a supplier, inventory management software gives you visibility. With visibility comes the ability to catch issues and stop them recurring.
Inventory management software can help give you an automatic notification when a supplier price increases, allowing you to make better decisions.
It can also show you which menu items are costing more to create than they’re being sold for, which gives you the power to finetune your menus to ensure every dish is profitable.
Improved overall operations
Inventory management software isn’t just about keeping a log of stock. It helps tighten up overall operations by joining together all of the different areas and systems within your hotel.
One example is recipe management features that allow you to not only engineer your menu’s recipes, but to also see the profitability of menu items and even track allergens and nutritional information. All in one system.
Then you have the ability to integrate this information with the rest of your back-of-house systems, like your accounting software or POS. This makes matching information across ordering, sales, and accounting far easier than trying to do everything in silos.
How a hotel inventory management app works
Below are some of the areas within our inventory management app growyze that can be used across desktop, mobile (Android and iOS), with detail into how each area works to help you improve how you manage and organise your hotel:
1. Enables stock control management
growyze helps you to optimise your stock control processes for each property or location by keeping all inventory logged in one simple to use system. Within growyze you can complete a full stock take by scanning each item’s barcode on any smartphone. This also allows you to complete multiple stock takes or count different areas or locations at the same time. Everything you count is logged, cross-referenced with order amounts and number of items sold, plus wastage, for a full and true count.
This reduces manual error and the time needed to count via pen and paper, or Excel spreadsheet and hey, it may even make counting stock fun!
2. Manages suppliers
As well as knowing what stock you have physically in the building, growyze also has areas that allow you to make auto-orders with your suppliers. This makes it far faster to request the stock items you need, based on what you have available.
As well as handling the process of ordering new stock items, there is also our unique technology - three-way invoice validation. This smart engine allows you to process and validate invoices, automatically picking up on any discrepancies.
If there is a discrepancy (you didn’t receive the right amount of items, or you were charged too much) this is automatically highlighted and you can send an invoice query in seconds.
3. Integrates with other systems (like your hotel accounting system, or POS)
Effective stock control systems need to be able to correlate with your other systems, including accounting and Point Of Sale (POS) software. growyze integrates with many softwares used in hospitality such as Square POS and Xero accounting. This means that you can use all of your data across what’s been sold, what’s been ordered and what you’ve paid for, to prevent losses and improve profitability. …
4. Lets you manage multiple locations
With multi-location hotels growyze has in-built functionality to help you manage stock across multiple areas. For example each hotel location can have its own area which allows you to count items allocated to one individual hotel location, or even a bar, restaurant or café within a hotel. This makes discrepancy reporting more granular, helping you to spot issues (like fraud or wastage) that are only occurring in one area, or a single location such as a bar or restaurant within the hotel.
Need to borrow a bottle of vodka from the hotel restaurant for the lounge bar? No problem! Stock can also be transferred easily across areas….
Multi-location support allows you to breakdown each area of the hotel, or individual hotel, to see profitability, stock control and purchasing expenses
5. Helps you create menu recipes and monitor profitability
Profitable food menu engineering is a part of restaurant and bar management that often gets overlooked. It involves analysing the cost of a recipe (made up of lots of ingredients) against the sale of the menu item as a whole, to determine the profitability of each menu listing.
growyze’s recipe management feature supports you to be on top of your menu costing with our simple margin calculator that allows you to automatically determine the cost of each recipe. This helps you to ensure you can sell at a profit and is a chef’s best friend as it takes the hard work out of seeing which menu items are profitable, and which are costing the restaurant money!
6. Provides inventory insights and reporting
With all of the data that’s stored inside growyze from every area (POS, orders, deliveries, waste, stock) it makes sense to have everything in an easy-to-view format i.e. a report.
growyze offers various automated and exportable reports including:
- Stock discrepancy report - this report helps you to see stock items which are missing and shouldn’t be. Making it easy to analyse issues in inventory management, or where products are being wasted or mislaid.
- GP analysis - this helps show the financial health of every hotel area by showing sales data, expected gross profit and any variances between figures.
- COGs - this report gives you the cost of goods sold for every period and compares opening and closing quantities (great for spotting discrepancies) as well as the true cost of what’s been sold.
- Price changes reports - if a supplier changes the pricing of an item this report helps highlight it so you can make an informed decision on what you’re ordering. This often means you can catch items which are going to affect your profit before they get okay-ed.
Having so many easy-to-understand, straight to the point reports monitoring the health of your hotel helps you to always be on top of the profitability of your operations.
Get started with growyze’s hotel inventory management system today
growyze offers a pilot programme to hotel customers which you can roll out easily to multiple locations, with full support from our Founders on getting set up and using growyze to make stock management a breeze. Get in touch today to book your demo and find out more.
