Restaurant POS Management: Taking care of your inventory

Sept. 4, 2009 - PRLog -- A major key to running a profitable restaurant is managing the controllable costs, such as food, labor and supplies. Of those, probably the most challenging cost to control is food.

To manage food costs effectively, an operator will need to monitor portion sizes, prevent theft, watch waste and order simultaneously.

Inventory software can help you identify precisely where your food costs are out of line. Using inventory control software will typically save you 1 to 2 percent of sales, and may perhaps save you much more. And it’s savings that drops straight to your bottom line as profit.

With a POS-based inventory control system operators can spot and solve food cost problems that might not become clear by simply focusing on portion control. And when your employees know that the system is carefully keeping track, it eliminate 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 an inventory control software.

Inside his restaurant, he would be portion controlling, yield testing and doing a physical inventory, but it wasn’t until he began using inventory software that he began to realize his inventory was out by exactly 2 pounds of fish each week; coincidentally, single box weights exactly the same! Upon knowing, it was relatively that easy to specify where the problem originated: a prep cook who was helping himself to a box of shrimp every Saturday evening.

Boosting 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 then can do a physical inventory and generate reports comparing that inventory with the calculated ideal usage in order to identify variances. The software can be set up to track as many items as the operator chooses.

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

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

Keeping a better track and control also can help an operator reduce the amount of stock they keep on hand, reducing waste and freeing up cash for other things. 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 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 – a reasonable addition to their bottom line profits.

So if you're using a restaurant POS system or are planning a purchase make sure you understand the additional profits that you can gain 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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