POS for Thought

POS systemI’ve purchased several POS systems for my restaurants over the years.  As an accountant and restaurant owner, I think I can give you a bit of practical advice when it comes to implementing a POS system in your restaurant.  I visited a few web sites to see whether this topic had been adequately covered and found that there are still a few useful things to say.  This article fills in a few of the missing details you should know about.
Most advice is written by people associated with a particular POS developer or a firm that implements such systems.  Do you think they might be biased?  I do.  Based on my experience and research, all of the leading POS systems have very similar capabilities.  Many provide the usual management capabilities in the standard package.  Others provide functions commonly employed in a basic bistro style operation, and require you to purchase additional modules, if needed, such as inventory control (ingredients), menu engineering (recipes and costing), labour scheduling and time control, reservations, delivery, pool table rentals, etc…

Redundancy & Backup
When considering a POS system, make sure you choose one that has data redundancy and allows you to remain running, even if one of the stations “goes down”.  Rest assured, this will happen in your restaurant, and it usually happens at the worst possible time, without any warning.  Being able to continue as if nothing happened is worth every penny this feature costs.
I’ve been using computers for decades and never had a problem with a hard drive until very recently.  And it happened to me twice!  One was on a laptop that was only five months old, but the other was on a desktop that had thousands of man-hours of work and dozens of customized software.  I was lucky that all information was backed up.  Even a brand new computer can run into problems.
The data contained in a POS system is part of the books and records of the restaurant.  At the very least, this information is necessary to support the sales and sales tax figures that the restaurant reports.  If this information is ever lost (or unreadable), you leave your business open to a substantial sales tax audit risk.  Therefore, you need a POS system that makes it easy to back up your data – preferably daily.  Weekly backups should be run and stored off-site, too.  There are many web-based back up services available at a reasonable cost.
No matter how highly the POS vendor touts their system’s features, if it uses a proprietary database, do not buy it.  By proprietary, I mean one that cannot be accessed by other software programs.  These days, SQL based databases are becoming the industry standard.
Another reason for a SQL type database is that you can access the information in other programs to properly analyze the data for your restaurant.  Despite their claims to the contrary, I have yet to find a POS system that provides all of the reports I like to have to manage my restaurants.  However, some of the packages allowed me to export the entire transaction database to a file, which I could import into Excel.  Using PivotTables, I was able to analyze the data in many useful ways.  Look for this capability in any package you choose.
Inventory & Costing Functions
Either as an add-on module or as part of the standard package, most POS packages allow you to maintain a perpetual inventory.  By this, we mean that you can track the individual quantities for every inventory item.  The vast majority of restaurants will have little or no use for this feature.  Quite simply, it costs far too much time to keep the data current.  However, beverage inventory and costs can be tracked quite effectively with a reasonable amount of time and effort.  But then again, this can be done just as easily in Excel.  So, don’t get talked into buying this module.  If you do have the capability and wish to make use of it, limit the scope to your alcoholic beverages, and don’t try to keep track of all of  the individual items in stock.
Scheduling & Time Reporting
This can be a great feature, allowing you to set schedules for all staff and compare actual time worked against the planned schedule.  As with any feature, you need to have procedures and controls to ensure that the data punched into the POS is correct.
All POS systems provide basic day-end reports necessary to record the day’s sales activity in the general ledger.  However, the POS should be able to do a lot more.  Some are better than others, and a few allow the POS data to be used by other programs, such as Crystal Reports, or exported to spreadsheets, such as Excel.  Make sure the POS you choose has these capabilities, because I can almost guarantee that there will come a time when you would like to have a report and the POS will not be able to produce it for you.
For example, I wanted to prepare detailed performance reports for each of my servers.  Specifically, I wanted to know the make-up of each server’s guest check average, by appetizers, mains, desserts, beverages, wine, liquor and beer.  I wanted to know how many guests ordered 1, 2 or 3 courses.  I wanted separate analyses for lunch, dinner, bar and dining room.  The high-end POS system would not provide this information.  However, I was able to do this (with a bit of work) by exporting the transaction data to Excel.  Your POS should allow you to do this, too.
Other Factors
I won’t get into everything, here, but any POS should be easy to use and fast.  It needs to be fast when trying to add or find menu items, split checks, etc…  There needs to be a flexible security system, so that only authorized transactions can be processed, such as voids and discounts.
Don’t forget the implementation process.  Now that you have the capabilities you need, they need to be properly set up and implemented, including staff training.  Make sure that every menu item has its own key – every single one.  An Absolut Martini is not the same as a Belvedere Martini.  Get rid of any Open Liquor or generic alcohol keys.  Categorize menu items for easier analysis.  Set up discount keys to tell you the reason why items were discounted.  Do the same for voids and limit them to menu items that have not been made.  Review all manual procedures and controls to ensure the POS system will be used properly.
There are many other considerations, but these are the major ones that aren’t very well detailed by most blog articles on POS systems.

One Reply to “POS for Thought”

  1. Redundancy & Backup is very important to the pos system, but however physical security is also play a big role to it. Encryption to the POS back office server could help.

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