Written by: JJ Tan, Founder, Jelly
Key Takeaways
- Inflow stock control protects your margin by ensuring the team only accepts and pays for what was ordered at the agreed price.
- Margin leaks appear when accepted quantities never reach the stock record. Over-deliveries, short-dated goods, and invoice mismatches then build up quietly.
- Three-way matching between purchase orders, goods received notes, and supplier invoices catches discrepancies before payment and stops overpayment.
- Jelly customers typically cut food costs by around 3% in the first 3 months and lift gross margins by about 2 percentage points.
- Book a demo with Jelly to see how invoice automation protects your restaurant margins.
Prepare Your Team and Documents Before You Start
Effective inflow stock control starts with the right documents and clear role ownership. You need access to:
- Supplier invoices and purchase orders
- Delivery notes and goods received notes (GRNs)
- Stock records and recipe data
- POS sales data
Role clarity keeps the process tight. The head chef or kitchen manager owns the physical receiving process. The operations or finance manager owns invoice reconciliation. Treat these as separate responsibilities with named owners.
Because deliveries arrive every week, this becomes a recurring process rather than a one-off exercise. That means you need one trained person on receiving per shift and a consistent system for recording accepted quantities. The invoice side of that system is where Jelly helps. It onboards and generates initial value in the first week so you can automate reconciliation quickly without a long implementation.
Schedule a chat with the Jelly team to get started within the week.
Why Tight Inflow Control Protects Your Margin
Inflow stock control shapes margin visibility, decision-making speed, and supplier accountability. Without it, over-deliveries, short-dated goods, unrecorded substitutions, and invoice-versus-delivery mismatches build up quietly. Each one is a small leak. Together they erode gross profit before anyone notices.
The leak appears at a specific point: when accepted quantities never reach the stock record. A supplier invoices for 20kg of chicken breast. The kitchen accepts 18kg because two kilograms have damaged packaging. The invoice is paid in full. The stock record shows 20kg. No one investigates the variance. Repeated across dozens of deliveries and suppliers, this pattern becomes a major driver of unexplained food cost variance in growing restaurant groups.
Jelly customers cut food costs by 3% on average in the first 3 months and improve gross margins by 2 percentage points. One operator improved gross profit from 65% to 72% within 12 weeks on approximately £500,000 in revenue. The mechanism is simply accurate invoice data matched against what was actually received.
Step-by-Step Process
Step 1: Set Par Levels and Calculate Order Quantities
Objective: Order the right amount so you stay stocked without tying up cash or running out.
A par level is the target quantity a restaurant replenishes up to. It uses average daily usage, supplier lead time, and a safety stock buffer to cover demand spikes or late deliveries. The standard par level formula is: Par Level = (Average Daily Usage × Supplier Lead Time in Days) + Safety Stock.
Once par is set, ordering becomes a simple subtraction exercise. The order quantity formula is:
Order Quantity = Par Level − Current Usable Stock − Stock on Order
Worked Example: Target stock (par) of 50kg, current usable stock of 15kg, and stock on order of 10kg.
Order Quantity = 50 − 15 − 10 = 25kg
Jelly’s invoice scanning keeps ingredient costs and usage visible so par levels stay accurate as prices and consumption patterns change.
Step 2: Control the Delivery at the Back Door
Objective: Ensure only what was ordered and what meets specification enters the building.
Receiving is an active, controlled process. One trained person checks quantity, quality, temperature, date codes, and specification against the purchase order before anything is accepted. The kitchen accepts items because they meet standard, not simply because they arrived.
FSA Managing Food Safety guidance requires food businesses to check, on every delivery, that chilled and frozen food is cold enough, that packaging is not damaged, and that the delivery matches what was ordered. Under UK food hygiene regulations, chilled food deliveries must arrive at or below 8°C, with below 5°C considered best practice, and frozen food must arrive at −18°C or below.
Grounds for immediate rejection include:
- Chilled food arriving above 8°C or frozen food above −15°C
- Damaged or compromised packaging
- Missing or illegible labels
- Items past their use-by date
- Visible contamination or pest evidence
- Raw and ready-to-eat foods stored together in the delivery vehicle
A HACCP-compliant delivery log records the date and time of delivery, supplier name, products received, temperature readings, condition of packaging, any items rejected with the reason, and the name of the person who checked the delivery. GOV.UK’s Food Hygiene for Businesses guidance requires a documented food safety management system based on HACCP principles.
Accepted quantities, not supplier invoices, must drive stock records. This principle sits at the heart of inflow stock control.
Step 3: Record Accepted Quantities on a Goods Received Note
Objective: Create an accurate record of what was actually accepted.
A goods received note (GRN) is a document that records the items, quantities, and condition of goods accepted at delivery. The GRN is the record of what a supplier actually delivered, and it forms the third document in three-way matching, which is why short or over-deliveries are caught before an invoice is paid.
| Item | Ordered Qty | Received Qty | Accepted Qty | Rejected Qty | Reason for Rejection |
|---|---|---|---|---|---|
| Chicken Breast | 20kg | 20kg | 18kg | 2kg | Packaging damaged |
| Cooking Oil | 10L | 10L | 10L | 0 | — |
The GRN becomes the source of truth for stock records and the basis for the three-way match in Step 4. Jelly digitises every invoice line item, including quantity, SKU, price, and tax, so accepted quantities can be reconciled against invoice data without manual data entry.
Step 4: Match Purchase Order, Goods Received Note, and Invoice
Objective: Catch discrepancies before they become margin leaks.
This step often goes missing from competitor guides, yet it is the most important control point in the inflow chain.
Three-way matching compares three independently created documents: the purchase order (what was ordered, at what price and quantity), the goods received note (what actually arrived), and the supplier invoice (what the supplier is asking to be paid). The match operates on two axes: quantity (PO quantity vs GRN quantity, and GRN quantity vs invoice quantity) and price (PO unit price vs invoice unit price).
When a mismatch appears, query the invoice, request a credit note from the supplier, and update the stock record to reflect what was actually accepted. Short, damaged, and spoiled shipments are common with perishable goods, so vendor credits should sit inside a routine, repeatable workflow.
This stage is where Jelly provides the most value. Jelly automatically scans every line item of an invoice. Its Price Alert feature then flags every price increase or decrease, giving chefs concrete evidence to negotiate better rates and claim credit notes. Jelly integrates directly with accounting tools like Xero, which supports a seamless and accurate payables process. As noted earlier, Jelly users typically cut food costs by around 3% in the first 3 months.
Step 5: Store Correctly Using FIFO and FEFO
Objective: Use stock in the right order and keep everything within date codes.
FIFO (first in, first out) means the oldest stock is used first. FEFO (first expired, first out) prioritises items closest to their expiry date, regardless of when they arrived. Both approaches need a storage layout that supports rotation, clear date labelling on all items, and consistent discipline from the kitchen team.
GOV.UK requires that chilled food be kept at 8°C or below and recommends setting fridges to 5°C or below so food stays cold enough even if temperature fluctuates. GOV.UK also advises using separate fridges for raw and ready-to-eat food where possible, or storing raw food below ready-to-eat food in a single fridge to prevent cross-contamination.
Good storage discipline only works when the inflow record is accurate. Stock that was never recorded cannot be rotated effectively, and FIFO compliance becomes guesswork without a reliable GRN as the starting point.
Step 6: Apply ABC Control to Inflow
Objective: Focus control effort where the money sits.
ABC analysis categorises inventory into three tiers based on value and usage. “A” items are high-value, high-usage products such as premium proteins, specialist cheeses, and top-shelf spirits. These need tight control and frequent counting. “B” items are moderate in value and usage. “C” items are low-value and require less oversight.
Applied to inflow, ABC analysis means you prioritise receiving checks and invoice reconciliation for “A” items. Optimised par levels can cut inventory carrying costs by 20–30%, and food waste accounts for 4–10% of purchases industry-wide. The 80/20 rule in hospitality food cost states that roughly 80% of food cost comes from only 20 items, the top 20 food items bought by dollar value. That insight gives you a shortcut: identify those items and apply the tightest controls to them first.
Step 7: Review the Weekly Numbers
Objective: Check whether inflow stock control is improving.
Three formulas provide the core weekly picture:
Food Cost Percentage = (Beginning Inventory + Purchases − Ending Inventory) ÷ Food Sales × 100
Stock Variance Percentage = (Actual Usage − Theoretical Usage) ÷ Theoretical Usage × 100, where Actual Usage is the “new” value and Theoretical Usage is the baseline value. The ×100 converts the resulting decimal into a whole-number percentage.
Waste Percentage = (Waste Value ÷ Total Input) × 100, where total input is the total material or resource fed into the process.
Food cost percentage shows overall margin health. Stock variance percentage shows the gap between what should have been used and what was used. A persistent positive variance often signals receiving discrepancies, over-portioning, or waste. Waste percentage isolates loss from spoilage and prep.
Jelly’s Flash Report gives a daily, weekly, or monthly view of gross profit margin calculated from invoice costs and POS sales. These numbers become available without waiting for an accountant. Operators who previously relied on monthly reports from their bookkeeper can instead react to margin movements in the same week they happen.
Book a demo to see Jelly’s Flash Report and Price Alert in action.
Common Mistakes and How to Fix Them
Even with this process in place, a few recurring errors can still undermine inflow control. These fixes keep the system working week after week.
- Accepting deliveries without a purchase order. Create a PO immediately upon receiving the delivery so you hold a same-day record of what arrived and at what price.
- Recording supplier invoice quantities instead of accepted quantities. Use a GRN and record accepted quantities at the door based on what you actually take in.
- Skipping logs for rejected goods or credits. Log all rejections at the time of delivery and follow up with the supplier for a credit note the same day.
- Letting multiple untrained people receive deliveries. Designate one trained person per shift as the sole receiver.
- Failing to reconcile invoices weekly. Automate with Jelly so discrepancies appear instantly instead of surfacing at month end.
- Ignoring price creep from suppliers. Use Jelly’s Price Alert feature to flag every price change and give chefs the evidence needed to challenge suppliers and claim credit notes.
- Storing goods without date labels. Build a labelling step into the receiving process and apply labels before goods leave the goods-in area.
How to Measure Success
A well-functioning inflow stock control process produces clear, measurable outcomes. Accepted quantities match stock records, invoices match goods received notes, and food cost percentage stays stable or falls. The process works when the team catches invoice discrepancies before payment.
Useful indicators of improvement include reduced admin time, better inventory accuracy, fewer invoice discrepancies, faster financial reporting, and clearer margin tracking by site. Jelly saves 10–20 hours of admin every month. The same operator cited earlier lifted gross profit from 65% to 72% in 12 weeks. Stuart Noble, Head Chef at Cairn Lodge Hotel, said his team cut food costs by 5% in a month after using Jelly.
Advanced Tips and Next Steps
Once the inflow chain runs smoothly, connect it to the wider financial picture. Start by linking POS data to dish costing so every menu item carries a live gross profit margin that updates when supplier prices change. That same sales data then shows which dishes are both popular and profitable, which turns menu engineering into an evidence-based decision. If you also sell through delivery platforms, build a separate delivery menu that factors in platform commission overheads so delivery sales stay profitable rather than just busy.
Jelly integrates natively with Square, EPOS Now, Toast, and Lightspeed via real-time API. POS setup takes approximately five minutes across all four systems. These integrations deliver item-level sales data the moment a transaction completes and feed directly into Jelly’s Flash Report and Sales Mix analysis. Jelly also integrates with Xero for a one-click push of digitised invoices into accounting, with Sage integration coming soon.
For operators running multiple sites, Jelly’s flat rate of £129 per month per location keeps costs predictable as the business grows. Pricing does not change by user count or feature set.
Schedule a chat with Jelly to see how the platform scales across multiple locations.
Frequently Asked Questions
What Is the 80/20 Rule in Inventory?
The Pareto principle, or 80/20 rule, states that in restaurants roughly 20% of ingredients account for about 80% of the cost of goods (purchasing value), so only that 20% of inventory needs counting weekly. In practice, this group usually includes premium proteins, specialist cheeses, and high-cost spirits. Focus your tightest receiving checks, most frequent stocktakes, and most rigorous invoice reconciliation on those high-value items to get the greatest financial return on effort.
What Is the ABC Method of Inventory Control?
ABC analysis categorises inventory into three tiers based on value and usage frequency. “A” items are high-value, high-usage products that need tight control, frequent counting, and priority treatment at the receiving stage. “B” items are moderate in both value and usage and receive standard controls. “C” items are low-value and low-usage, so a lighter-touch visual check is usually enough. This approach concentrates effort where the financial risk is highest.
How Do You Improve Inventory Accuracy in a Restaurant?
Inventory accuracy starts at the point of delivery rather than at the stocktake. Recording accepted quantities on a goods received note at the back door, instead of copying figures from the supplier invoice, keeps the stock record aligned with what actually entered the building. The next step is a three-way match between the purchase order, the GRN, and the supplier invoice so you catch discrepancies in price or quantity before payment. Weekly stocktakes, consistent counting methods, and a single trained person responsible for receiving on each shift all reinforce accuracy. Jelly automates the invoice side by digitising every line item and removing manual data entry.
What Is a Goods Received Note and Why Does It Matter?
A goods received note (GRN) is a document completed at the point of delivery that records the items, quantities, and condition of goods actually accepted into the building. It differs from the supplier’s delivery note, which records what the supplier claims to have delivered. The GRN matters because it is the source of truth for your stock records and the essential third document in the three-way match. Without a GRN, you have no independent record of what was accepted, so you cannot verify whether the supplier’s invoice is accurate. Paying invoices without a GRN often leads to overpayment in restaurant procurement.
How Do You Calculate Order Quantities Using Par Levels and Lead Time?
The formula is: Order Quantity = Par Level − Current Usable Stock − Stock on Order. Par level is the target quantity you replenish up to, calculated as (Average Daily Usage × Lead Time in Days) + Safety Stock. Safety stock is commonly set either as a percentage of usage, typically 20–30%, or as one to two days of average usage, with larger buffers for fast-selling items from unreliable suppliers. As a worked example, with a par level of 50kg, current usable stock of 15kg, and stock on order of 10kg, the order quantity is 50 − 15 − 10 = 25kg. Review par levels regularly and recalculate when sales volume, menu composition, or supplier lead times change significantly.
What Are the Four Main Inventory Control Methods?
The four main methods used in restaurant inventory management are ABC Analysis, FIFO and FEFO, Par Levels, and Three-Way Matching. ABC Analysis prioritises control effort by item value. FIFO and FEFO govern stock rotation to minimise spoilage. Par Levels set reorder points and order quantities so you avoid both stockouts and overstocking. Three-Way Matching reconciles the purchase order, goods received note, and supplier invoice before payment and directly prevents overpayment and margin leakage at the invoice stage.
What Inventory KPIs Should a UK Restaurant Track?
The five most important KPIs for inflow stock control are food cost percentage, stock variance percentage, waste percentage, inventory turnover rate, and order accuracy. Food cost percentage ((Beginning Inventory + Purchases − Ending Inventory) ÷ Food Sales × 100) shows overall margin health and works best when tracked weekly. Stock variance percentage measures the gap between theoretical and actual usage, with a target of under 3% per ingredient category for well-run operations. Waste percentage isolates spoilage and prep loss. Inventory turnover rate measures how quickly stock is used relative to the amount held. Order accuracy tracks whether deliveries match purchase orders and gives you a supplier performance metric for renegotiation.
Conclusion: Close the Loop on Your Inflow Stock Control
Inflow stock control in restaurants starts as an invoice-data challenge rather than a storage challenge. The margin leak appears at the back door, in the gap between what was accepted and what was recorded, and between what was delivered and what was invoiced. A clipboard-and-spreadsheet system struggles to close that gap reliably because it depends on manual effort that is inconsistent, time-consuming, and always one busy service away from breaking down.
The process in this guide, from setting accurate par levels through to reviewing the weekly numbers, gives operators a complete inflow chain. Jelly automates the most error-prone part of that chain by scanning every invoice line item, flagging price changes instantly, and integrating with your accounting software so reconciliation between accepted deliveries and stock records happens without manual intervention.
As Murat Kilic, Chef-Owner of Amber restaurant in East London, puts it: “Jelly keeps my business alive.” His Amber restaurant saves £3,000–£4,000 per month through credits, better buying, and tighter menu controls enabled by Jelly, all driven by the invoice data that Jelly makes visible.
Ready to close the loop on your inflow stock control? Book a demo with Jelly today.