Pour cost is the number that tells you whether your liquor inventory is under control. It’s the cost of what you poured divided by what you sold. If you bought $2,000 worth of spirits and sold $9,000 in spirit-based drinks, your pour cost is about 22%. That’s healthy. When that number starts creeping above 24% on liquor and you haven’t changed your pricing, something is off.

Break pour cost into categories because they behave differently. Spirits should land around 18-24%. Beer runs higher, typically 24-28%. Wine falls somewhere in between depending on whether you’re selling bottles or by the glass. Lumping everything together hides problems. Your beer cost might be fine while your liquor cost is bleeding money, and a blended number won’t show you that.

The foundation of catching shrinkage is a weekly physical count. Pick the same day each week, ideally a slower day, and count every bottle. Weigh open bottles or use a tenthing system where you estimate how full each one is in tenths. Record everything in a spreadsheet or inventory app. Compare what you used (beginning inventory plus purchases minus ending inventory) against what your POS says you sold. The gap between theoretical usage and actual usage is your variance. Some variance is normal from spillage and the occasional buyback. Consistent or growing variance is a red flag.

Weekly pour tests on your bartenders help you spot over-pouring. Have them pour what they think is a standard shot into a jigger or measured glass. You’ll be surprised how many experienced bartenders free-pour 1.75 ounces when they think they’re pouring 1.25. That half-ounce difference on every drink adds up fast across a busy weekend.

Common causes of shrinkage beyond outright theft include drinks not rung into the POS, incorrect modifiers on cocktails with premium liquor, comp drinks that nobody tracks, and bartenders pouring heavy for friends or regulars. Each of these shows up as a gap between what inventory says you poured and what your sales receipts reflect.

Your POS system should be your best friend here. Make sure every recipe is programmed with correct ingredient amounts so the system can calculate theoretical usage. If your POS tells you that you should have used 14 bottles of well vodka this week but your count shows 17 missing, you know exactly where to look.

Keeping your restaurant and bar bookkeeping tight makes this analysis possible. When purchases are recorded accurately and sales are reconciled daily, calculating pour cost becomes straightforward instead of a guessing game. If your books are behind or purchases aren’t categorized properly, you can’t trust the pour cost numbers you’re calculating.

Don’t wait until the end of the month to look at this. Monthly inventory checks catch problems after they’ve already cost you hundreds or thousands of dollars. Weekly counts take 30 to 60 minutes depending on your bar size, and they let you investigate while details are still fresh. If Tuesday’s count looks wrong, you can pull camera footage and POS reports from the past few days instead of trying to figure out what happened three weeks ago.

Set a threshold for acceptable variance and hold your team accountable. Most well-run bars target less than 3-5% variance between theoretical and actual usage. Anything beyond that deserves investigation. Share the numbers with your bar managers so they understand what’s being measured and why. Transparency around inventory tracking tends to reduce shrinkage on its own.

If tracking inventory and calculating pour cost feels overwhelming on top of everything else you’re managing, that’s where having Wisconsin small business bookkeeping support makes a real difference. When your financial data is organized and current, the inventory analysis becomes a decision-making tool instead of another task you keep pushing off.