Restaurant Point of Sale (POS): Increase Your Bottom Line By Properly Controlling Your Inventory

Sept. 4, 2009 - PRLog -- Increase Your Bottom Line By Properly Controlling Your Inventory

A good way to make more profits and successfully running your restaurant is by managing the controllable costs, such as food, labor and supplies. With these, you'll probably experience more difficulties controlling food.

Simultaneously monitor portion sizes, prevent theft, watch waste and order efficiently must be done in order to manage food costs effectively.

An inventory software will 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 might save you much more. And it’s savings that drops straight to your bottom line as profit.

POS-based inventory control system operators can spot and solve food cost problems 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.

One restaurateur who had been experiencing food cost problems learned that lesson after a week of using inventory control software.

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

Boosting the bottom line

Using an inventory control program, in a typical restaurant POS, the operator can simply set up the software by entering the recipes and product costs to the system. The system then can track ideal usage based on those recipes and the restaurant’s actual sales.

The inventory control software is also able to track product usage in situations where some orders is not in line with the standard recipe. The operator then can do a physical inventory and generate reports comparing that inventory with the calculated ideal usage in order to see variances. The operator is also able to set the software to track any number of item he wants.

Generally in restaurants, in their top 10 items 80 percent of their food cost problem. And you can schedule nightly counts of key items and weekly or even monthly counts of some other items.

With a single item alone, over-portioning by 1 ounce per order possibly will cost a restaurant hundreds of dollars a month. 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. By carrying too much inventory can cause a loss of between 2 percent and 5 percent on an operator's average profit-and-loss statement.

According to one of our clients it was a lot of effort to set up because they have a fairly extensive menu, and by helping them program it properly, we were able to drop their food cost by 2 to 4 percent – all of which went to their bottom-line profits.

So if you currently have a restaurant POS system or are contemplating a purchase make sure you understand the additional profits that you can obtain and the "how to's" by learning and using the inventory module of the system as you should be.

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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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