Inventory variance is the difference between the stock movement your records imply and what physical verification shows. The useful question is not only “how much?” but “why?”.
Start with the movement equation
Opening stock plus purchases and other receipts, less closing stock, produces actual usage. Expected usage is then compared with sales, recipes or other operating records. The exact calculation varies by inventory type, but the discipline is the same: every input must belong to the same period.
Check data before blaming operations
Before drawing conclusions, verify opening and closing counts, invoice dates, credits, transfers, wastage, sales imports, recipe links and units of measure. A clean investigation distinguishes data quality issues from genuine operational loss.
Look at materiality
Not every variance deserves the same attention. Prioritise high-value items, repeated exceptions and categories where small unit differences translate into meaningful cost or revenue exposure.
Review by category and over time
A venue-level total can hide the story. Category, class, product and multi-period views help management isolate whether the issue is concentrated or systemic.
Document the explanation
Good inventory control leaves an audit trail. Record the reason for adjustments or known operational events so the next reporting period does not start with the same unanswered question.