How To Increase Your Bottom Line By Proper Inventory Controlling

Sept. 4, 2009 - PRLog -- Here's a good way to make more profits and successfully run your restaurant is by managing the controllable costs, such as food, labor and supplies. With these, food can be the most difficult cost to handle.

In order to manage food costs effectively, an operator needs to simultaneously monitor portion sizes, prevent theft, watch waste and order efficiently.

An inventory software will be able to help you identify exactly when your food costs are out of line. Using inventory control software will typically save you 1 to 2 percent of sales, and could save you much more. And it’s savings that drops straight to your bottom line as profit.

Using a POS-based inventory control system operators can spot and solve food cost difficulties that might not become visible by simply focusing on portion control. And when your employees know that the system is carefully keeping track, it stop waste as well as theft.

A single restaurateur will be able to realize this lesson, when it comes to food cost problems, after a week of using inventory control software.

Inside his restaurant, he's portion controlling, yield testing and making physical inventory, but it wasn’t until he uses an inventory software where he realized his inventory was out by exactly 20 pounds of tuna every week; coincidentally, it's the same weight as a box. Knowing that, it was relatively easy to pinpoint the source of the problem: one of the prep cooks was stashing a box of goodies every Friday night.

Boosting your bottom line

In a typical restaurant point of sale inventory control program, the operator sets up the software by first entering their recipes and product costs. The system then can track ideal usage based on those recipes and the restaurant’s actual sales.

The inventory control software can aslo track product usage in situations where some orders is not in line with the standard recipe. The operator can then do a physical inventory and generate reports in order to compare it with the calculated ideal usage to be able to spot their differences. The software can also be set up to track as many items as the operator wishes.

In a majority of restaurants, in their top 10 items 80% of their food cost problem. scheduled in nightly, weekly or even monthly counts of some other items.

Even an ounce of over-portioning 1 item per order can mean hundreds of dollars in a month for restaurants. If an item is running $1.67 per pound, eliminating over-portioning on 100 orders per day for 30 days could add up to more than $300.00 in savings or $3600.00 per year!

Better tracking and controls also can help an operator reduce the amount of stock they keep on hand, reducing waste and freeing up cash for other things. If the operator carries too much inventory causes a loss of between 2% and 5 % on an operator's average profit-and-loss statement.

According to one of our clients it was a lot of work to set up since they have a fairly extensive menu, but after helping them with proper programming, we were able to drop their food cost by 2 to 4 percent – it's a big plus for their bottom line profits.

So if you have a restaurant POS system or are thinking of a purchase make sure you know how to and understand the additional profits that you can gain by learning and properly using the inventory module of the system.

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The author of this article writes for POS-For-Restaurants.com, with over 20  years experience in restaurant point of sale systems, helping restaurant owners nationwide increase their efficiency and bottom-line profits..

Visit http://www.pos-for-restaurants.com for more information on how our national network of restaurant point of sale professionals can help your business achieve greater success in these difficult economic times.

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