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How to use your point-of-sale to help reduce operating costs

Advanced POS technology can help you manage costs and streamline your restaurant

Experienced restaurant owners know the economic challenges of running a restaurant. Margins often are razor thin and maintaining profitability means keeping a sharp eye on overhead. In fact, food and labor costs can take a huge bite out of even the most successful restaurant’s revenues. As a general rule of thumb, full-service restaurants should aim to keep their labor costs below 30% to 35% of revenues and their food costs below roughly 40%.1

A point-of-sale (POS) system may not seem like a logical place to look for help with cost control, but modern POS systems do a lot more than process credit card payments.

In our survey of 500 small business owners, 60% use POS devices that offer additional functions, such as inventory management.2 Some restaurant POS solutions also assist with accurate order taking, employee scheduling, overtime prevention and timecard management, all of which can help keep costs in check. This enhanced technology can help monitor and streamline key back-of-house elements, ensuring managers and owners have the information they need to make informed and timely decisions, respond to trends and keep a lid on expenses.

The result? More profits and a more sustainable business.

Utilize POS reporting to make key business decisions

Even though restaurant technology on the market today has evolved to offer increased functionality over what it did in the past, nearly a quarter of the restaurants we surveyed still rely on a standalone payment terminal that doesn’t integrate with any other systems.1 The best POS systems for restaurants integrate both payment and business management data in a single system, giving owners easier access to information about their businesses.

Restaurants can use the reports produced by a smart POS to monitor key metrics and quickly pinpoint any areas of concern such as rising labor or food costs. That information lets owners take action to address those areas, and then track the impact on the bottom line.

Efficiently manage staff and schedules

Using a POS system with integrated employee resource planning (ERP) software to track employee hours makes it easy to keep an eye on how much you’re spending for servers, dishwashers, kitchen staff and front-of-house employees. If you discover that your labor costs are high, you can focus your attention on how to make more efficient use of your staff.

For example, you can dig into sales trends using your POS system to determine traffic patterns among your customers. Using that analysis, you’ll be able to reduce staff during slow times and increase staffing when demand is typically high.

A restaurant POS can also provide specific tools for optimizing your employees’ time and contributions. Features can include the ability to send shift reminders to employees’ phones, settings that prevent employees from clocking in early and even cameras that take a photo at clock-in to guard against "buddy punching." A POS with employee management features also makes it easier for you to schedule shifts – giving you time to focus on other aspects of your business.

Evaluate detailed inventory tracking to reduce food costs

Daily inventory tracking via your POS can help you better understand your business’ food costs—including how they may be changing over time.

The digital supply chain available in an intelligent POS system can keep those percentages front and center, so you can take action if you find you’re consistently spending too much on food. Inventory tracking could help you:

  • Incorporate seasonal ingredients to trim produce costs
  • Identify ingredients in your pantry that are nearing expiration
  • Use surplus ingredients to inspire daily specials so you can generate revenue instead of throwing food away
  • Determine top sellers and ensure you have enough stock to meet demand

Next steps

Restaurant POS systems have become more sophisticated and providers continue to add new functionality to their platforms. If your system is out of date, it may be time to consider an upgrade. And if you have a newer system, it’s critical to make sure you’re taking full advantage of its features. The easier it is to track your restaurant’s vital statistics, the more likely you’ll be to stay informed. Then, you can use all the tools at your disposal to make the necessary adjustments to put your restaurant on track and keep it there.


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