Variance is the difference between the theoretical cost and the actual cost of the items you are selling. Another way to think about Variance is the difference between what was used, based on inventories and orders, and what was sold, based on the sales data from the POS system.Variance CalculationVariance is a silent killer of your profits -- it's the unaccounted for loss or shrinkage of your inventory items. Maintaining a low variance number means that you are running a very efficient operation and are capturing profit from as much of your inventory as possible.How to Review Variance:After running an Item Level Sales Report, which is also referred to as a Variance Report, click the Variance tab at the top.Your BevSpot items will be grouped by Category by default, but this can be changed to All Items, Subcategory, or Vendor. Because the Variance report is run for a specific inventory range, the items that are listed here are items that were either present on the inventories counted, or mapped to at least one POS item that was sold during that time period. The Sold and Usage columns have a hover that displays how those values are determined. The amount sold is showing all of the POS items that the BevSpot product is mapped to, while the amount used comes from the usage equation on the inventory count.Amount Sold Amount UsedIf the amount sold and the amount used for an item matches up, then the variance is 0, which is perfect! However, for some items, the amount sold and the amount used will not match up and there will be either negative or positive variance. Listed below are some potential contributing factors to variance:Negative Variance - Amount Used > Amount Sold.Operational: Miscounts, inconsistent portions, unaccounted for loss/comps, theft. Data Entry: Missing deliveries, mapping mistakes.Positive Variance - Amount Used < Amount Sold. Operational: Miscounts, inconsistent portions.Data Entry: Negative usage, mapping mistakes.How to Fix Variance:As the examples above show, the existence of variance on a given item does not always mean that there is an operational issue. Some variance issues are caused by data entry mistakes, and this report helps you track both kinds of errors.Fixing variance is a matter of simply fixing the underlying contributing factors. If an item was counted on an inventory in one storage area by the case instead of by the bottle, that mistake can be corrected by adjusting the count in BevSpot. If bartenders are over-pouring or giving out free drinks that they should not be, that can be corrected in-house. If an order was not entered into the system, which is making the usage of a product look lower than it should, that can be corrected within BevSpot as well. Variance across the entire location will never be 0% (we're humans after all!), but by using BevSpot to consistently track usage, that number can be driven down over time to an acceptable range. Getting your variance below 10% puts you in a great position to reap the most benefit out of of your sales. If you have additional questions or would like to learn more, feel free to schedule a training with the BevSpot team HERE.