In this article you will find:
If you want to learn more on about common variance scenarios, take a look at this article.
First off, how do the columns in the new report compare to those in the previous version?
What is a Stock Reconciliation Report
Keeping track of inventory variances is crucial for profitability and smooth operations. Your reconciliation report helps identify discrepancies between expected and actual inventory usage, sales, and waste. Below, we break down each column in your report, how it is calculated, and how it helps pinpoint issues.
Example: Variance at a Multi-Location Restaurant
You notice a high Variance Quantity in draft beer.
The Variance Value shows a 400 loss, which impacts your bottom line
Checking the Closing Quantity, you confirm your stock count is correct.
Checking the Deliveries, you confirm your stock count is correct.
Looking at Waste Quantity, you find excess spillage recorded.
You investigate and find that bartenders are throwing away bottles when there is still a little product inside.
You implement training and portion control measures to fix the issue.
This report helps you reduce waste, improve profit margins, and identify operational inefficiencies.
Key Definitions
Variance Quantity Definition:
Variance Quantity represents the difference between what was sold and what was expected based on stock movements.
How it’s calculated:
Sold quantity – (Opening stock – Closing stock + Deliveries + Transfers in – Transfers out – Waste + Batches created – Used in batches – CPU deliveries).
Uses:
A positive variance (higher than expected stock) may indicate missing sales data, over-delivered stock, or errors in stock counting.
A negative variance (lower than expected stock) could suggest untracked losses, theft, spoilage, incorrect deliveries, or inaccurate stock counts.
Variance Value Definition:
Variance Value represents the difference between the expected and actual stock value based on sales and stock movements.
How it’s calculated:
Sold value – (Opening stock value – Closing stock value + Delivered value + (Transfers in – Transfers out) × Current price – Waste value + (Batches created – Used in batches) × Current price – CPU delivered value).
Uses:
A positive variance (higher than expected value) may indicate missing sales records, over-delivered stock, or pricing discrepancies.
A negative variance (lower than expected value) could signal untracked losses, miscounted stock, waste, incorrect purchase prices, or stock shrinkage.
Sold Quantity Definition:
Sold Quantity represents the amount of an ingredient that Nory estimates has been used to produce the menu items sold, based on the recipes configured in the system.
How it’s calculated:
This value is derived from sales data pulled from the POS system and applied to the corresponding ingredient-level recipes. It reflects theoretical usage rather than actual stock movements.
Why it may differ from the Sales Insight Report:
The Sales Insight Report shows sales data at the menu item level, including the sold quantity and value of finished menu recipes.
The Sales Insights report shows all items sold, but some may be excluded from GP calculation on the item record.
The Sold Quantity here represents the estimated ingredient usage, calculated according to configured recipes.
Since this is a theoretical calculation, discrepancies can occur if recipes are outdated, misconfigured, or if ingredient substitutions are made without updating the system.
Sold Value Definition
The total revenue generated from sold items.
How it’s calculated:
Pulled directly from POS transactions.
Uses:
If variance value is negative but sales value is high, you may be making more money but have inaccurate inventory tracking.
Opening Quantity Definition
The starting inventory for the reporting period.
How it’s calculated:
The counted quantity of stock from the previous period’s closing count.
How to use it:
Ensuring accurate opening counts improves variance tracking and overall inventory accuracy.
Deliveries Definition
What it means: The quantity of stock received from suppliers during the reporting period.
How it’s calculated:
The sum of all logged deliveries.
How to use it:
Ensure invoices for all deliveries have been processed to keep stock levels accurate.
CPU Delivered Quantity & Value Definition
What it means: The value of stock sent from CPU. Price reflects the amount at the time the delivery is sent.
How to use it:
This columns in valuable for CPU locations
Net Transferred Quantity Definition
What it means: The net quantity moved between locations during the reporting period.
How it’s calculated: Transfers in minus transfers out.
How to use it:
Transfers must be completed at both the sending and receiving locations for the movement to register.
Unmatched transfers may cause discrepancies in stock counts.
Closing Quantity Definition
What it means: The remaining inventory counted at the end of the period.
How it’s calculated: The final stock count recorded at the close of the reporting period.
How to use it:
Discrepancies between closing and expected stock levels can indicate missing transactions, miscounts, or untracked waste.
Used Quantity Definition
What it means: The total quantity of stock used during the reporting period.
How it’s calculated:
Opening count + Deliveries – Closing count – Transfers.
How to use it:
Helps track actual stock usage and identify patterns of overuse or underuse.
Opening Value Definition
What it means: The inventory value at the start of the reporting period.
How it’s calculated:
Opening quantity (this is the closing quantity from the fist count selected) × Previous period’s price (average prices for deliveries to calculate the closing value.)
How to use it:
Accurate opening values are crucial for monitoring cost trends and financial reporting.
Received Value Definition
What it means: The total value of stock received during the reporting period.
How it’s calculated:
Delivered quantity × Price at time of delivery.
How to use it:
Ensures cost tracking remains accurate for supplier invoices and financial reporting.
Transferred Value Definition:
What it means: The total value of stock moved between locations.
How it’s calculated:
(Net transferred quantity) × Price.
How to use it:
Helps maintain accurate cost tracking across locations.
Closing Value Definition:
What it means: The inventory value at the end of the period.
How it’s calculated:
Closing quantity × average price for that period
How to use it:
Helps compare ending stock value to expected levels and spot discrepancies.
Used Value Definition:
What it means: The total value of inventory consumed.
How it’s calculated:
Opening value + Received value – Closing value – Transferred value.
How to use it:
Identifies how much stock value was used during the reporting period and helps track cost efficiency.
Waste Quantity & Waste Value
What it means: The amount and cost of wasted stock.
How it’s calculated: Logged waste quantity and value recorded during the reporting period.
How to use it:
• High waste may indicate over-ordering, over-prepping, or spoilage.
• Reviewing waste trends can highlight areas to improve margins.
Columns visible only in the export
Included in Gross Profit (GP) Calculation
What it means: Whether this item is factored into gross profit.
How it’s calculated: Determined by whether the item contributes to revenue and cost of goods sold (COGS).
How to use it:
Ensures that only relevant items are included in financial performance analysis.
Is Estimated
What it means: Indicates whether the variance is based on an estimate rather than exact data.
How it’s calculated: True if actual usage is inferred rather than directly counted.
How to use it:
Estimated values provide insight when direct tracking isn’t available, but manual verification may be needed.
TOP TIPs
Want to update the stock category? Check out this article.
If you would like to learn more on common investigation scenarios, check out this article