How to inventory liquor: Knowing how to inventory liquor at your bar or restaurant effectively will significantly lower your liquor cost. Many bars in the US still use their liquor inventory simply to calculate their liquor cost for the period. This method of performing liquor inventory at works as follows: The person performing the liquor inventory counts the entire inventory, usually with a clipboard, recording specific beer, liquor and wine inventory levels. Next the liquor inventory counts are entered into excel so that the inventory value can be calculated. This total liquor inventory value is used along with sales and the total value of liquor inventory which was delivered during the period to calculate liquor (using a liquor cost formula). The problem with this method of performing liquor inventory is that is does not provide owners and mangers with information about the performance of specific products. By lumping the performance of multiple products into a single liquor cost (often broken down into draft beer, bottled beer, liquor and wine), it is not possible to bar owners and managers to ensure that all drinks are being portioned correctly and consistently rung into the point of sale system correctly. Given the industry standard of 20% liquor inventory shrinkage, adopting a system to inventory liquor which allows owners to identify variances of specific products and calculate things such as ideal cost (based on the specific product mix each period) is essential to ensure maximum profitability. If you own or manage a bar and still manage using liquor cost, recommend you investigate alternative liquor inventory systems.