5 Tips for Using POS Systems for Food Service Inventory Control

Point of sale systems are awesome tools for managing all kinds of things, not the least of which is better inventory control.

“You are guaranteed to go out of business if you don't know exactly what’s happening with your inventory,” says Anthony Miller, owner of Squeaky Beaker Café in Cambridge, MA. “That is the most elemental aspect of running a business. You create a product and you sell that product. If you don't know exactly what you’re selling — and how much of it — you don't know what to buy. It’s simple math.”

Here are five ways to use your POS system to make that “simple math” easier to calculate:

1. Determine Daily Averages: At Deli Ohio in Canton, OH, co-owner and general manager Ryan Miller uses his POS system to gain insights into daily averages. “We know our top 5 sandwiches that we average, what side items do well and when to make smaller batches of soup,” he explains. “All of the decisions we make in prep work and cooking in the kitchen are a result of watching and studying our numbers via the POS.”

2. Make Menu Decisions: Miller, who opened Deli Ohio in 2013, is still learning how to use POS software to make decisions about what should be on the menu — and what shouldn’t. “I would like to see ourselves having every single item in, including all of our rotational items and each variety of soup we’ve offered, so we can see which soups or sides do better than the others,” he says. “Until then, it’s hard to be clear what sides sell more or less, other than just watching to see which one runs out first.”

3. Manage Food Costs: “The ability to run an ideal food cost report from the POS and match it to a physical inventory at any time during the day can give operators instantaneous data to manage food costs,” explains Ken Priest, director of operations for Genuine Roadside in New York, NY. “If we are over- or under-portioning, we know right then during that meal period. This instantaneous information is turned into training opportunities for the managers so they can address the issue with the rest of the crew. In this way, mistakes are minimized and we don't make the same ones for days or even weeks. At most, the mistake is remedied after just one meal period.”

4. Improve Ordering Accuracy: Priest does a daily inventory of high-dollar items and a weekly inventory of the rest. “With our POS system in place and our ability to track inventory in real time, we know where all our inventory dollars are at all times,” he says. “This means our inventory dollars are not sitting on a shelf because of excessive ordering. We have more than enough information to know exactly what to order based on the PMIX (product mix) from the POS and sales projections. If there are discrepancies or theft, we can address that issue promptly.”

5. Enhance Ordering Efficiency: Your POS system also makes ordering more efficient. “Restaurants are moving more and more toward a just-in-time inventory model, where new deliveries are uploaded into the system and sales pull down the inventory count,” says Atlanta-based Robin Gagnon, restaurant broker and principal at We Sell Restaurants. “While this is still a reach for some restaurants, larger units see the value in this application.” Check with your POS software provider and your food distributor to see if this option is available to you. Then talk to your CPA to see if it’s worthwhile for your operation.

Getting control over and keeping track of inventory is fundamental in food service businesses, so it only makes sense (and cents!) to engage the power of your point of sale system to help do it.

“You’ll make it back in more ways than whatever the additional cost will be for expanding the POS system to include inventory control,” Priest says. “Beyond the aforementioned benefits, you’ll be surprised at how fast it pays for itself by curbing over-ordering, which ensures fewer dollars sitting on the shelf, helping to stop pilferage and theft, and controlling meaningless waste.”

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