Proper Inventory Control Can Increase Your Bottom Line!

Sept. 4, 2009 - PRLog -- One major key to running a profitable restaurant is managing the controllable costs, such as food, labor and equipment. Although, food would be the the most difficult cost to control.

In order to manage food costs effectively, an operator will need to monitor portion sizes, prevent theft, watch waste and order all at the same time.

An inventory software will help you identify exactly when your food costs are out of line. With an inventory software, typically you'll save 1% to 2% of sales, and could save you much more. And it is 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 apparent by simply focusing on portion control. And when your employees know that the system is carefully keeping track, it will prevent more waste as well as theft.

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

Inside his restaurant, he was portion controlling, yield testing and making physical inventory, but it wasn’t until he began using inventory software that he noticed his inventory was out by exactly 2 pounds of tuna each week; coincidentally, the exact weight of a box. Knowing that, it was relatively easy to pinpoint the source of the problem: a prep cook was stashing a box of goodies every every Monday morning.

Raising your bottom line

In a typical restaurant point of sale inventory control program, an 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 software also can track product usage in situations where some orders don’t conform to a standard recipe. The operator can then do a physical inventory and generate reports comparing it with the calculated ideal usage to check their differences. The software can also be set up to track as many items as the operator desires.

For most restaurants, their top 10 items 80 percent of their food cost problem. Key items are also scheduled in nightly counts and 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. Eliminating over-portioning on 100 orders per day for 30 days on a $1.67 per pound of a single item, could add up to more than $300.00 in savings or $3600.00 in twelve months!

Reduce waste and free up cash for other things! A better tracking and control of stock also helps an operator reduce the amount of stock they keep on hand. Losses due to carrying too much extra inventory can add up to a loss of between 2% and 5 % on an average operator’s 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 – all of which went to their bottom-line profits.

So if you're presently using a restaurant POS system or are planning a purchase make sure you understand the additional profits that you can get and the "how to's" 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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