Bar stock control: pegs, bottles and variance in ml

Track liquor in ml, not bottles. Opening plus purchases minus pegs sold minus closing gives variance. A worked example for one brand, with a counting routine.

To track liquor stock in a bar, measure every brand in ml, not bottles. For each period, take opening stock plus purchases, subtract the ml you should have poured for the pegs billed, and compare that expected figure with the closing stock you actually count. The difference is your variance, and it tells you how much liquor left the bottle without being billed.

A bottle count says you have "four and a bit" bottles. An ml count says you are 120 ml short of what your bills say you should have. Only the second one helps you act.

Why do bottle counts hide losses?

Because a bar does not sell bottles. It sells pegs. A bottle that should have given a fixed number of pegs can give fewer through over-pouring, free drinks, spillage, breakage or pegs that were poured but never billed. None of that changes the number of bottles on the shelf until the bottle is empty, and by then you cannot tell which shift or which pour caused the gap.

Counting in ml turns each bottle into a measurable quantity. Once opening, purchases, sales and closing are all in the same unit, the arithmetic exposes the loss.

What is the variance formula for liquor?

Expected closing (ml) = opening (ml) + purchases (ml) − pegs sold × peg size (ml)

Variance (ml) = actual closing (ml) − expected closing (ml)

A negative variance means liquor is missing. A positive one usually means a recording error, such as a bottle received but not entered, or pegs billed under the wrong brand.

The five inputs, per brand:

Input	Where it comes from	Common trap
Opening stock	Last period's actual closing count	Using the expected figure instead of the counted one
Purchases	Receipts and transfers from the godown into the bar	Godown stock counted as bar stock, or transfers not recorded
Pegs sold	Billing records for that brand	Cocktails and mixed drinks not broken down into ml per spirit
Peg size	Your standard measure for that brand	Large and small pegs billed under one item
Closing stock	Physical count of sealed plus open bottles	Open bottles guessed instead of measured

Keep peg size as an explicit number per item. If you serve two measures, bill them as two separate items so each one deducts the right ml.

Can you show a worked example for one bottle?

The numbers below are illustrative only. Use your own bottle sizes, peg sizes and prices.

Take one whisky brand, tracked for a single day at the bar counter. Assume a 750 ml bottle and a 30 ml peg.

Opening: one open bottle measured at 450 ml, plus two sealed bottles (2 × 750 = 1,500 ml). Opening = 1,950 ml
Purchases: one bottle issued from the godown = 750 ml
Available = 1,950 + 750 = 2,700 ml
Pegs sold per billing: 38 pegs × 30 ml = 1,140 ml
Expected closing = 2,700 − 1,140 = 1,560 ml
Actual closing count: one sealed bottle (750 ml) plus an open bottle measured at 690 ml. Actual closing = 1,440 ml
Variance = 1,440 − 1,560 = −120 ml

A shortfall of 120 ml is four pegs that left the bottle without a bill. If that brand's peg sells for ₹250 (illustrative), the day's gap is ₹1,000 in selling value from one brand. Over a month and across a full back bar, that kind of quiet gap adds up, and a bottle count would never have shown it.

The same ml figures also feed your costing. Cost per ml multiplied by ml poured gives the liquor cost of each peg, which works the same way as the recipe costing in our guide to restaurant inventory and food costing.

How do I measure open bottles?

Pick one method and use it every time, because consistency matters more than precision.

Weighing. Weigh one full and one empty bottle of each brand once and record both. At each count, weigh the open bottle, subtract the empty weight, and convert to ml using the ratio between the full liquid weight and the bottle's ml. This is the most repeatable method.
Level reading. Mark the bottle in tenths and read the level. It is faster but varies between people, so use it for quick shift checks, not for the main count.

Record open bottles separately from sealed ones. Sealed bottles are easy to count; nearly all the error sits in the open ones.

How should the bar and godown be handled?

Treat the godown and the bar counter as two locations. Purchases from the party land in the godown. Bottles move to the bar only through a recorded issue. The bar's "purchases" line in the formula is those issues, not the supplier invoice.

This split tells you where a loss happened. If the godown count matches its records but the bar shows a shortfall, the problem is in pouring or billing. If the godown itself is short, look at receiving and storage.

Issue the oldest stock first so bottles do not sit for long in the godown, especially for products that do not keep well once opened, such as some wines and liqueurs. Our post on FIFO, LIFO and FEFO explains how to set that rule.

What does a simple counting routine look like?

Fix the peg size per item and bill each measure as a separate item
Record full and empty bottle weights for every brand you carry
Count sealed and open bottles at the same time each day, before opening or after closing
Record every godown-to-bar issue at the moment it happens
Break cocktails into ml per spirit in your billing so each one deducts from stock
Log breakage, spillage and complimentary drinks with a reason, the same day
Calculate variance per brand, not for the bar as a whole
Review the largest negative variances first and note what you found

What are the common mistakes?

Counting the whole bar as one number. A small total variance can hide one brand that is badly short and another that is over. Calculate per brand.

Carrying forward the expected closing. Next period's opening must be the counted figure. Otherwise every error compounds and the records drift away from the shelf.

Ignoring cocktails. A cocktail with two spirits that is billed as one item but deducts nothing from either bottle will show up as variance on both.

Writing off without a reason. A spillage entry with no note teaches you nothing. Log what happened and who recorded it.

Chasing positive variance away. A surplus is also an error. It usually means a missed receipt or a wrong item billed, and the missing entry may be hiding a shortfall somewhere else.

When does this not apply?

This method covers stock control and costing inside your own bar. It does not cover excise rules, licence conditions or any state-specific legal requirements on how liquor stock must be recorded or reported. Those differ by state and change over time, so check them with your licensing authority or your CA rather than relying on an internal variance sheet.

FAQ

Why should I count liquor in ml instead of bottles? Bottles are sold by the peg, so a bottle count hides everything that happens inside the bottle. Counting in ml lets you compare what should have been poured, based on pegs billed, with what actually left the bottle. The gap between the two is your variance, and it only shows up at ml level.

How do I measure an open bottle accurately? Weighing is the most consistent method. Weigh a full and an empty bottle of the same brand once, then weigh open bottles at each count and convert the weight to ml. Eyeballing the level against the label is quick but varies from person to person, so use it only between proper counts.

What variance is normal for a bar? There is no single correct figure that suits every bar. Set your own baseline by running daily or weekly counts for a few weeks with careful pouring, then treat anything well above that baseline as a signal to investigate. A sudden jump on one brand matters more than a steady small figure across all of them.

How often should I count bar stock? Count high-value and fast-moving brands at every shift close or at least daily, and the rest weekly. A full count of the bar and the godown once a month ties everything together. The shorter the gap between counts, the easier it is to trace a variance to a shift, a person or a specific event.