making the most of your pos
Understanding your cost basis and charging appropriately is imperative. Having a tight handle on the product going across your bar and the revenue flowing back is just as important. To best control this exchange, there is no substitute for a smart, observant, present manager. The most effective tool this manager can employ to assist in this effort is a good Point of Sale System. And not to over-simplify what can often seem overwhelming, there really are only three things you need to do to turn your POS System into your most useful asset.
Buy It Right
Chances are good that the best tool for controlling your operation is already sitting on your bar. However, it may be the case that you don’t have a system or the one you have is outdated. If so, your first act will include your biggest and most expensive decision. What should you be looking for?
Price is always an important consideration, but not most important.
Features and Functionality are important considerations, but only those that you seem likely to use for a good reason. Don’t get distracted by flashy technology that, while impressive when demonstrated, you suspect might be too complicated or time-consuming for your staff to easily or willingly employ.
Service and Support are important considerations and based on my experiences, the most important factors in selecting a system. Installation, setup and training are difficult. Your system going down in the middle of a busy shift just plain sucks. Make sure you ask the right questions about service and support before committing to a new system. Don’t assume the answers you get are correct – ask for and follow up on references.
Set It Up Right
Initial setup is expensive and time consuming. It must include the appearance and sequencing of screens, the appearance and location of buttons or tiles and especially the complete and accurate representation of your drink offerings and their associated prices and recipes. This can be a monumental effort for most operators. It takes time away from the operation and requires close attention to detail and a lot of math, propositions many of us in the industry shy away from. Rest assured that the only way to effectively employ your POS System is to set it up accurately. Trust me; it is way easier to set it up correctly at the beginning than it is to try to correct errors and omissions later.
Use It Right
Once you’ve set it up you are ready to use the information the system can provide to help you to control your operation. Here’s how it works.
Set Up Your Manager Reports. Any system includes a number of manager reports that can provide a variety of useful information regarding appropriate product offerings, the product mix and proper pricing.
For our purposes, we need reports that tell us the total number of units sold, the total number of ounces of each ingredient in the unit sold, and the total dollar volume of the unit sold (hence the necessity to include every offering, recipes for those offerings where appropriate and an accurate price for each menu item). For example, you might want to run a report on the total number of drinks sold during the lunch shift that were made with Absolut Vodka.
Take Inventory. Many operations complete full inventories bi-weekly, weekly, or even at the end of each day because it is the best way to know how to control product and revenue. It works, but it is certainly not best.
The real beauty of employing the POS System to control operations in this manner is that it allows for periodic and regular audits and those are much easier and more convenient than taking full inventory all the time. Let’s follow through on the example above. At the beginning of the same lunch shift, you take an inventory of Absolut Vodka. At the end of the shift, you take another inventory of Absolut Vodka determining that you have used 4.5 ounces of Absolut. You would expect that you sold three drinks with Absolut, each drink having 1.5 ounces of Absolut. Therefore, you should have generated $27.00 in sales from those drinks. But, the POS tells you that you only sold two and generated $18.00 in sales. Now, you know you have a problem.
Based on periodic audits like this you will be able to tell, when it occurred and what member of your staff was working when it happened. This gives an excellent chance to identify the action and correct it. This saves time and money and gives you excellent control over my operation.