---
title: "Inventory Count Variance Review"
slug: "inventory-count-variance-review"
description: "Review count variances before approving using the Variance Review tab. Toggle between QTY and dollar views to resolve discrepancies."
updated: 2026-08-17T22:20:11Z
published: 2026-08-17T22:20:11Z
canonical: "docs.restaurant365.com/inventory-count-variance-review"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Inventory Count Variance Review

The Variance Review tab in the [Review and Approve Inventory Count](/doc/docs/inventory-counts-review-and-approve-an-inventory-count) function shows differences between the current [Inventory Count](/doc/docs/inventory-counts-overview-security) and the previous recorded count.

> **Note About Lookback Period Never-Before Counted Items**
> 
> When an item on the inventory count has never been counted before, the system will use the last time that the inventory template currently in use was used as the starting date of the lookback period for that item.

When an inventory count is entered, the system automatically calculates any variances for each item. These variances display in the Variance Review tab, allowing quick review before completing the count. Reviewing these variances helps identify count discrepancies without needing to run an [**Actual vs. Theoretical analysis**](/doc/docs/actual-vs-theoretical-analysis) every time.

Use this tab to confirm item accuracy and investigate significant differences before approving the inventory count.

---

## Before Reviewing Variances

Before reviewing variances, click **Refresh** on the Variance Review tab to make sure all data is current. Refreshing updates the tab with any new transactions, such as approved invoices or sales data from the Daily Sales Summary (DSS). This step helps prevent missing or outdated information in the variance review.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-UJA2ATO7.png)

---

## Required Variance Reviews

Users can elect whether or not to make variance reviews a requirement. To require variance reviews, visit the [**Miscellaneous** tab of the System Preferences page](/doc/docs/system-preferences-miscellaneous) and check the box labeled **Require Count Variance Review**.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/ce4b1d55-9eda-447a-9a00-29f13b49a031.png)

When the ‘Require Count Variance Review' option is enabled in [**System Preferences**](/doc/docs/system-preferences-miscellaneous), Each variance type must be reviewed before completing an inventory count review.

Users that attempt to mark an inventory count as **Complete** without reviewing the variances will be prompted with a notice to review in order to complete.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/c8832d34-020f-4710-8617-39001fcfbfc5.png)

If there are no variances identified, each notice will automatically be marked as **reviewed**.

---

## Navigation

Inventory count variances can be reviewed from the **Variance Review** tab of the inventory count sidesheet. To view the tab, click **Review** from the top of the side sheet.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-FO8JOU8J.png)

This will open the count review section directly to the **Variance Review** tab.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-65697ATO.png)

---

## Variance Review Flags

There are two possible Variance Review notices:

1. **Review Actual** This notice will **always** appear when **Inventory Count Variances** is enabled. Clicking this notice will allow users to review **Actual Variances**.
2. **Review Theoretical** This notice will only appear if users have set an **Inventory Variance** threshold on the [Item Category form](/doc/docs/item-categories). When the variance of a counted item exceeds this threshold, users will receive the **Theoretical Review** notice.

![](https://s3.amazonaws.com/cdn.freshdesk.com/data/helpdesk/attachments/production/12137016060/original/pi7962SPOkpeDcnHntnxOI02FmAiH3lVjQ.png?1704911981)

Reviewing the count variances on the **Variance Review** tab requires users to review both the **Actual Variances** and the **Theoretical Variances**. The Variance Review tab will have notifications to Review Actual and Review Theoretical- #, with the # being the number of theoretical variances identified.

Variances that have **not** been reviewed will be featured in yellow.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-SMG1NJPH.png)

Once variances are reviewed, the notices will turn green with a checkmark.

> Each notice must be **clicked 3 times** to be marked as reviewed.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-G9XY5B9A.png)

---

## Variance Review Settings

The variance review settings offers different display options. Select whether to review items by quantity or dollars or whether the items reflect the reporting UofM or inventory UofM.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-5CU37FNM.png)

*Click a section to expand for additional information and images.*

### Display Mode: QTY / $ Selector

The Display Mode selector toggle determines whether the values shown in the table reflect **quantity** or **current dollar cost**.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-RAX25W6D.png)

When **QTY** is selected, all the values in the table will be based on item quantities.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-G78M13Q5.png)

When **$** is selected, all the values will reflect dollar amounts based on the current cost.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-AUGM8951.png)

### Unit of Measure: Reporting / Inventory Selector

The Unit of Measure selector determines whether the items and their details shown reflect the items’ **Reporting UofM** or **Inventory UofM**.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-IU6Y8BYR.png)

When **Reporting** is selected, the Reporting UofM column will show.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-3Z0XVH8H.png)

When **Inventory** is selected, the InventoryUofM1 will show.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-FBSSDPSS.png)

---

## Review Actual / Theoretical

### Review Actual

To **Review Actual**, click the actual notification bar.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-8TQYGNBI.png)

### Review Theoretical

To **Review Theoretical**, click the theoretical notification bar.

> Selecting Review Theoretical filters the Variance Review table to only the items whose counted variance exceeds the Inventory Variance threshold configured for their assigned item category. R365 uses the value from the most specific item category that is not blank, following the order Item Category 3 → Item Category 2 → Item Category 1.
> 
> 
> 
> If no item category in the account has an Inventory Variance value configured, selecting Review Theoretical returns no items, since no threshold exists for any item's variance to exceed. The Inventory Variance setting only affects the Review Theoretical filter — it does not affect which items appear on the Variance Review tab when no filter is applied. See [Item Categories](https://docs.restaurant365.com/docs/en/item-categories) for more information.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-UB032NK9.png)

### Variance Review Table

In the Variance Review tab table, users will see the following columns:

| **Column** | **QTY Description** |
| --- | --- |
| Item | The name of the item. > Recipe items may appear in this list if the recipe has [Log Prep enabled](/doc/docs/prep-log-1), or if the recipe is received from [commissary](/doc/docs/commissary-overview). If a recipe does **not** meet either of these criteria, the recipe will be expanded. This means only the recipe's individual ingredients will be listed, combining with any quantity counted directly for that ingredient. > > > > The **Log Prep** value used to determine whether a recipe expands on Variance Review comes from the recipe's Item Location record, when one exists, rather than the recipe form: > > - If the recipe has an Item Location record for the current inventory count location, the Log Prep value from that Item Location record is used. > - If no Item Location record exists for that location, the Log Prep value set on the recipe form is used instead. > Clicking an Item Name will open its Purchase Item Form directly to the [Transactions Tab](/doc/docs/purchased-item-record-transactions-tab) with Location and Date filters set that reflect the following: > > - Inventory Location > - Date last counted (start date) > - Date of the current count (end date) |
| Reporting UofM / Inventory UofM | The unit of measure of the item. When **Inventory** is selected in the variance review menu, this will assume the UofM selected in the item’s Inventory UofM 1 field. When **Reporting** is selected in the variance review menu, this will assume the UofM selected in the item’s Reporting UofM field. |
| Current $ Cost | The current cost of the item in the current inventory count. |
| Efficiency % | The theoretical cost over the actual cost of an item. This percentage is based on the cost in dollars and shows how efficiently this item is being used. > This column only appears when reviewing the **Theoretical** filter. |
| Date Last Counted | The last date that the item was reported or logged in inventory. > This column only appears when reviewing the **Actual** filter. |
| Previous Qty | The previously reported quantity of the item based on the previous count. > When an item on the inventory count has never been counted before, the system will use the last time that the inventory template currently in use was used as the starting date of the lookback period for that item. |
| Purchases | The quantity of the item that was purchased. |
| Transfers | The amount of the item that was transferred to / from the location. |
| Current Qty | The current quantity of the item. |
| Actual | The actual quantity of the item used. |
| Theoretical | The theoretical quantity of the item used |
| Waste | The quantity of the item that was reported as waste. |
| Variance | The difference between the theoretical amount and actual amount of the item used. |
| UnExp Var | The unexplained variance. This is the variance minus waste. |
| Item Category 1 | The item category 1 that the item is assigned to. |
| Item Category 2 | The item category 2 that the item is assigned to. |
| Item Category 3 | The item category 3 that the item is assigned to. |

> [!WARNING]
> When the **QTY / $ selector** is set to **$**, the table values will show total dollar amounts based on the **product** of the item **quantity** and the **current cost of the item**.

---

## Recipe Expansion on Variance Review

A recipe expands into its ingredients on Variance Review when it does **not** have **Log Prep** enabled and is **not received from commissary** at the inventory count location.

When a recipe expands, it does **not** appear as its own line on Variance Review — its ingredient quantities are added instead to the quantities of the corresponding inventory items. Because of this, the quantity or value shown for an item in Variance Review can be higher than the quantity counted directly for that item on the Item Details tab. If a recipe is expected but cannot be found on Variance Review, check whether it is expanding into its ingredients instead.

For **example**:

- A recipe for Red Sauce uses 2 lb of tomatoes for every 10 lb of sauce produced.
- Red Sauce does not have Log Prep enabled and is not received from commissary at this location, so it expands and does not appear on Variance Review.
- Counting 20 lb of Red Sauce contributes 4 lb of tomatoes.
- Tomatoes are also counted directly at 7 lb.
- Variance Review shows a single Tomatoes line at 11 lb: the 7 lb counted directly plus the 4 lb contributed by the expanded Red Sauce recipe.

---

## Completing a Variance Review

Each time the Review Actual / Review Theoretical flags are clicked, the table columns will reorder and the table will re-sort so that users can ensure that all details are reviewed.

Each flag must be clicked **3 times** to be marked as complete.

### Review Actual

- While clicking the review notice will reorder and re-sort the table, there is **no** specified sort order. Users should review as necessary.

### Review Theoretical

- Clicking a review notice **one** time will sort the list in ascending order based on the **Efficiency** column.
- Clicking a review notice a **second** time will sort the list in descending order based on **Efficiency** column.
- Clicking a review notice a **third** time will have no sort.

## Related

- [Inventory Count Variance Review](/inventory-count-variance-review.md)