How to handle inventory management with Square POS: complete guide for restaurant owners

Effective inventory management is crucial for any restaurant or café, helping you keep track of your ingredients, reduce waste, and ensure that popular items are always in stock. Square POS offers built-in inventory management tools that are both powerful and easy to use. However, many restaurant owners may not be fully utilizing the platform’s features, particularly when it comes to ingredient-level tracking, syncing with online stores, or automating stock updates.

In this tutorial, we’ll walk you through how to manage your inventory with Square POS efficiently, especially focusing on key features like automatic stock updates, online store integration, and ingredient-level tracking.

Why Inventory Management Matters for Restaurants
🔗

Inventory is the lifeblood of any restaurant business. Without the right ingredients or stock on hand, you risk losing sales or disappointing customers. Manual inventory management can be time-consuming and prone to error, which is why using an integrated POS system like Square is essential. Square’s inventory features can help you:

• Track item counts automatically.

• Sync with online and mobile orders.

• Set alerts for low-stock items.

• Manage ingredients and adjust inventory based on recipes.

Now, let’s explore the key steps for setting up and optimizing inventory management in Square POS.

Step 1: Setting Up Your Item Library🔗

The first step to managing your inventory is creating an item library, where you can add all the products you sell. Square POS allows you to create categories for different types of items, which can be particularly useful for restaurants.

How to Add Items:🔗

1. Go to your Square Dashboard and click on Items.

2. Select Create an Item, where you’ll enter the item name, price, and category.

3. Don’t forget to add modifiers for items that customers might customize (e.g., adding extra toppings to a pizza).

Tip: If you sell food items with different sizes, create multiple variations of the same item (small, medium, large) and assign different prices and stock levels to each.

How to manage stock:🔗

Set your stock levels for each item. You can enter the initial stock count and enable tracking for each product.

1. Click on the selected item from the list.
2. Click Manage stock under the Variations section, then toggle on Tracking.
3. Next to Stock Action, select the reason for adjusting your stock, then enter a stock amount.
4. Toggle on Low stock alert to receive notifications when stock counts hit a certain level.
5. Click Done.
6. Click Save.

Here you can change the stock count:🔗

- to enable automatic tracking toggle - "Tracking"

- if you want to manually change the stock count select stock action and click save:

• Stock received

• Inventory restock

• Damage

• Theft

• Loss

• Restock return

Step 2: Tracking Ingredients at the Ingredient Level🔗

If you want to go beyond tracking finished menu items, Square POS allows you to manage inventory at the ingredient level using a process called ingredient tracking.

This is especially helpful for tracking perishable ingredients like meats, vegetables, or garnishes that are used across multiple menu items. For now, the feature is available in beta to Square Sellers subscribed to the Square for Restaurant Plus and Premium plans. This feature enables you to track food margins and monitor stock availability based on ingredient stock and costs.

You can apply to the beta community here

Also, there are lots of extensions to track inventory at the ingredient level:

- MarketMan

- Shopventory

Step 3: Enabling Automatic Stock Updates🔗

One of the key benefits of using Square POS for inventory management is that it automatically updates your stock levels as items are sold. Whether an order is placed in-store or through an online or mobile platform, your inventory will be adjusted in real-time.

How to Enable Automatic Stock Updates:

1. Go to your Square Dashboard, click Items, and select an item from your library.

2. Scroll down to the Inventory section and toggle on Track Stock.

Tip: You can also enable low-stock alerts so that you receive notifications when inventory levels fall below a certain threshold.

Step 4: Syncing with Online and Mobile Orders🔗

If you offer online ordering through platforms like Square Online or a mobile app powered by Appetize, you do not need to worry: we automatically sync stock levels, whether it’s placed online or in person.

This will prevent overselling items online that are out of stock in-store.

Step 5: Using Reports to Monitor Inventory🔗

Square POS offers detailed reporting tools to help you monitor your inventory performance. You can track your inventory usage, see what items are selling the fastest, and identify any discrepancies between sales and inventory levels.

How to Access Inventory Reports:

this feature is available only for Square for Retail Plus plan

1. Navigate to your Square Dashboard and click on Reports.

2. Select the Inventory tab to view stock levels, sales, and reorder points.

3. You can filter reports by item, category, or time period to get insights into which products are selling well and which need restocking.

Step 6: Managing Purchase Orders and Reordering🔗

Square also allows you to create purchase orders directly from the POS system. When items fall below a certain stock level, you can automatically generate a purchase order and send it to your supplier.

How to Create a Purchase Order:

1. Go to Inventory Management in your Square Dashboard.

2. Select Create Purchase Order, where you can input the items and quantities you need to reorder.

3. Send the purchase order directly to your supplier from Square.

When the stock arrives, simply update your inventory in Square POS to reflect the new stock levels.

Conclusion: Optimize Your Restaurant’s Inventory with Square POS🔗

Inventory management doesn’t have to be a headache. With Square POS, you can track both menu items and ingredients in realtime, automatically update stock levels as sales occur, and sync inventory across your online and mobile platforms. By utilizing the built-in inventory reports and low-stock alerts, you’ll stay on top of your stock levels and reduce the risk of running out of critical ingredients during peak hours.

For restaurant owners looking to optimize efficiency and cut down on waste, mastering the inventory management features in Square POS is essential. Take full advantage of these tools and see the difference they can make in keeping your restaurant running smoothly.

By following these steps, you’ll be well on your way to managing your restaurant’s inventory with ease. For more in-depth guides, check out Square’s.