How to increase your bottom line by proper inventory controlling
One major aspect to running a profitable restaurant is managing the controllable costs, such as food, labor and supplies. With these, you’ll probably experience more difficulties controlling food.
To handle 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 precisely when 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 is savings that drops straight to your bottom line as profit.
A POS-based inventory control system operators can spot and solve food cost problems that might not become noticeable by simply focusing on portion control. When your staff knows that the system is keeping track, it discourages both waste and theft.
A single restaurateur will be able to realize this lesson, when it comes to food cost problems, probably a week of using inventory control software.
Inside his restaurant, he’s portion controlling, yield testing and conducting physical inventory, but it wasn’t until he uses an inventory software where he finds out his inventory was out by exactly 20 pounds of pasta each week; coincidentally, the exact weight of a box. Upon knowing, it was relatively that easy to specify the source of the problem: 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, the operator sets up the software by first entering their recipes and product costs. The system then tracks the ideal usage based on those recipes and the restaurant’s actual sales.
This 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 spot variances. The operator can even set the software to track as many items as he wants.
Mostly in restaurants, 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.
Even an ounce of over-portioning 1 item per order can mean hundreds of dollars in a month for restaurants. If you eliminate over-portioning on 100 orders per day for 30 days on a .67 per pound of an item, may well add up to more than 0.00 in savings or 00.00 in a 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. Losses due to carrying too much excess inventory can add up to a loss of between 2 percent and 5 percent on an average operator’s profit-and-loss statement.
We’ve assisted a client before who’s menu is fairly extensive and had lots of work for setting up, but after helping them program their system as it should be, 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 have a restaurant POS system or are considering a purchase make sure you know how to and understand the additional profits that you can obtain by learning and using the inventory module of the system correctly.
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..
To learn on how our national POS network of restaurant point of sale specialists can help your business achieve greater success in these difficult economic times, visit POS-For-Restaurants.com.
How To Manage Labor Cost Using Restaurant Point of Sale Systems
In the not-too-distant past, controlling labor in a food-service establishment was mostly an instinctive process. Effective labor control meant having just enough people on hand during a rush to keep the operation up and running, and by sending people home as quickly as possible as the rush died down.
To effectively make projections of future sales, restaurant manager keeps track of their business for the past couple of weeks and converted those numbers into an staff schedule. The success or failure of those efforts was determined at the end of the night, when the manager sat down with a stack of time cards and calculated the day’s labor percentage.
However, those days are no longer with us and a restaurant’s point-of-sale system has taken over many of the functions a restaurant manager used to do manually.
And since the minimum wage sets to rise to .25 for a few years to come, business owners looks for alternatives they can use for labor cost control.
At a Pizza Inn restaurant, their general manager Jim Phillips uses his restaurant POS system from Pixel Point to track labor throughout the day.
Check out your labor cost every 45 minutes or at any time of the day you want! Your POS system is sure to deliver detailed and accurate reports anytime you want it. Just by simply clicking on a POS terminal, you can easily see where your labor stands or check on your hourly stats.
The restaurant POS system can display forecasted sales, actual sales and a variance between the two, as well as scheduled versus actual hours.
“The system tells me everything I need to know,” Phillips said. “I can look at the POS and see the number of pickups for any given hour; the number of dine-ins and the number of buffets. It gives me my supervisor hours, my kitchen hours and my assistant’s hours all in a breakdown.”
An extra pair of eyes
Other POS reports show labor trends over time, with this owners or district managers can track labor cost manager performance shift-to-shift, said Jennifer Wiebe the marketing manager of Speedline Solutions. The system can also produce reports detailing manual editing of time clock reports that can help spot potential abuse.
The time clock reports provides important documentation which can also be used as a basis for labor board reviews of attendance-related employee terminations.
And by the end of the day, a POS system just like Phillips’ can generate, export and integrate file reports of your payroll and employee information, store accounting systems or third-party payroll services.
It can also assist managers when assigning staff shifts by the forcasted sales and by generating a schedule from them.
Operators can efficiently schedule to meet their labor targets using sales forecasting and their labor plans. Pixel Point’s scheduling tool is linked with employee skills and availability which can speed up scheduling process.”
Hours and breaks restriction can easily be done with schedule- and time-clock alerts. The schedule also can be linked to a built-in time clock that requires a manager override for late clock-ins or early clock-outs.
Most operators set their clock-in and clock-out times very close, within 5 minutes.
There would be no way that an employee can clock in until 5 minutes before their scheduled shift or clock out late without a manager override with this system. It tells if an employee is supposed to be off-duty but he is still on the clock.
This article’s author is the VP of Customer Relations at POS-FOR-Restaurants.com – a national organization of retail and restaurant POS systems dealers.
For more information see their website at POS-For-Restaurants.com
Looking for the right Restaurant POS Software?
A few simple tips for selecting Restaurant POS Software
There are more and more restaurant and hospitality sector that are increasingly turning towards business management softwares to aid them with their needs, as well as to increase their efficiency.
It is with extreme importance that every restaurant must select the restaurant POS software suite that’s flexible enough to meet their needs and be able to grown alongside their business.
And because not all restaurant owners can be comfortable with the POS technology, it can be a huge importance and vital to any hotel or restaurant wanting to trade immediately after installation, which attracts more customers. Always remember that a good POS software can save you money, time for training your staff, complete control on stocks, payroll and even on wages.
For the hospitality market sector, it is very competative and streamlining your business operations can mean the difference between failure or success. So, in this world, If you can’t level with your competitors you could see yourself loosing your customer base through promotions and cheaper offers by smoothly run establishments operating management and restaurant software.
Even restaurants aren’t exempted from this, that’s why having a good hospitality software suite is very important for any restaurant’s success.
At some times, you may notice that your restaurant’s external factors can a make a difference to your success, think again. With the right hospitality software, it can can greatly add up to your success and can even boost you up on top of your competitors.
If you are still searching for a software suite which is right for your business, make sure you look for a restaurant software suite that is robust, upgradeable, a great value for the price you payed for, and most of all easy to use.
Your hospitality software also needs to be adaptable to meet your business needs. But if your software is rigid and allows for no flexibility it will be unable to adapt it to suit your business needs as your business grows causing problems for the future.
A retail POS business software should be easy to install and use, intuitive and doesn’t even need days of training; make sure it’s fully modular, flexible and upgradeable to grow with your business. Additionally, you need to look for restaurant software that will run on your computer systems.
If you’re going to use multiple till then you’ll be needing a good back up system, a reliable system that will replicate your master data file so you would never have to loose any important data in case of system crashes. It is also important to make sure that the restaurant POS you’re going to use allows multiple hardware configuration, as well as payroll integration and data export to sage or quick-books. Mostly, some restaurant owners will have at one time or another used a computer running on a windows operating system, many of the professional scalable point of sales and hospitality software solutions are written specifically with windows in mind.
A final consideration is the requirement that the software will fast and user-friendly.
Mostly, restaurants are extremely busy especially during peak hours, so a POS system that workd quickly and doesn’t crashes easily would be the best choice!Since most good restaurants are always busy, especially during peak times, a POS system that will work quickly and not freeze or crash during constant use should be the one you purchase. A good stable piece of software can sometimes be expensive, but it will certainly help you to ensure that your business runs smoothly allowing you to concentrate on other areas of your business.
Support is one of the main priorities of any business, make sure you have the option of telephone support or virtual network connection support similar to yahoo and msn messenger this will be an optional extra with any good POS software provider and worth its weight in gold if your systems go down and you are unable to trade.
Don’t forget that software programmers knows far more than anyone does. An overlooked point that many clients have regretted from my experience, make sure that whoever you purchase the software from can offer after- hours support should you need it, also a company in the same time zone is a very useful commodity.
With over 20 years working in the restaurant POS industry, the author of this article is the VP of Customer Relations at POS-For-Restaurants.com, an online information service to help restaurants receive competitive bids for hardware, software or a complete restaurant point of sale system.
Check them out at POS-For-Restaurants.com