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Restaurant Accounting Software – For Improving Inventory Management

25 Feb

Restaurant Accounting Software – For Improving Inventory Management

One of the biggest fears of the restaurant owners is to leave even one customer unsatisfied because they can easily spread bad word of mouth on social media without considering any of the given reason. Therefore, from food quality to restaurant ambiance, price, efficient service and every other small operation are required to be perfectly managed. Any Carelessness can leave a bad impression on your customers for years that make it important for you to have a POS solution for your restaurant.

Although there are many ways a restaurant accounting software can benefit you but this blog post is mainly discussing the impact of Restaurant Software on your inventory management and its related outcome. This is because it’s impossible to cover all the benefits a POS cause to the restaurant in a single blog.

As a restaurant owner, you will surely second me for stating inventory management through traditional accountancy method as one of the most frustrating things. This is because it requires the checking of every asset from A to Z again and again which costs you your precious time that should have been served in further planning and customer management of your restaurant.

However, you cannot avoid controlling the food costs while reducing the wastes it relatively difficult through manual restaurant accountancy. Not only POS resolve these issues, but it also facilitates proper scheduling and inventories on a daily basis that prevents a restaurant from over-ordering and helps in improving its overall profits. Unlike, traditional inventory management, competitive POS software connects with almost every of your restaurant operation from menu planning to daily scheduling and planning of the number of customers it can serve and also manages customer retention activities. More benefits of using restaurant software on your inventory are discussed as follows:

  • Menu Planning

Restaurant POS helps you in maintaining accurate inventory making it easy for you to check the available food items and plan your menu effectively. Moreover, the systems will also help you in determining the quantity of the available ingredients making it easy for you to set the targets of customers that can be served. Having these insights prevents a restaurant from food shortage and surplus related issues that negatively affect your profit margins. By remaining updated with the surplus ingredients, you can effectively incorporate them in next day’s menu or special deal in order to sell it before its expiry.

  • Food Tracking

The sales trend of the restaurant is not constant instead it changes on an everyday basis that is required to be tracked accordingly. How can you manage this manually while controlling other on-time restaurant operations? Using a POS solution can help you in taking the inventory of the consumables as well as supplies of your store consistently. But how is this information useful to you? These statistics will help you analyzing the daily consumption rate of each of your ingredients. After determining the time period at which a particular ingredient is consumed, you can plan your purchasing efficiently. And any ingredient that has low consumption rate can be purchased in less or required quantity. Other than this, the main benefits this tracking will give you as a restaurant owner is an ability to anticipate customer preferences. So you can easily avoid a shortage, surplus, and other inventory related issues.

  • Real-time Cost of Goods Sold Calculation

The calculation of COGS is important because it defines the amount you are spending on your inventory and gives an accurate look of your restaurant’s profit margins. However, manual restaurant management method does help you in calculating the cost of goods sold but it is time-consuming, involves high chances of errors and difficult to store as well as retrieve long term data. While it is extremely important to consider COGS as it depicts the financial health of a restaurant at the time of budgeting.

  • Food Cost Setting and Waste Controlling feature

As discussed above, you can manage all the details regarding the inventory in a restaurant POS making it easy determining the cost of the offered food. After adding the reasonable profit, you can set a competitive price unlike traditional accountancy, where it is impossible to set realistic prices of the food. A standard POS solution has the option of FIFO (First in First Out) that can help you identify the oldest inventory i.e. food ingredients that can be put in front and use first.  This will automatically reduce the wastage of your ingredients as you will be using most of your inventory.

Now the question is “how should you take inventory of your restaurant through Restaurant software?”

Just follow the below-discussed steps for effectively taking your restaurant inventory through POS.

  1. Create and label five columns in inventory sheet with items, the unit of measure, inventory amount, unit price and total cost.
  2. Enter each of your inventories under the item column including your eatable, cleaning, IT and all other inventory items.
  3. Add the unit of measurement for each of the added items in the sheet i.e. either kg, number of boxes and etc.
  4. The next step is to add the number of units for each of the items in the inventory amount column of the sheet.
  5. Add the unit price of the particular added item in the unit price column.
  6. Simply multiply your inventory amount and unit price column in order to calculate the total cost of the added individual inventory.

After taking these inventories of your restaurant, you can have an average inventory cost on daily basis by just one click in the system. Moreover, you have to add these inventories only one time, and then you can update it whenever you need without making the list from scratch of items every month. These well-managed and properly tracked inventories can help the company attaining economies of scale by reducing the cost of wastage while ensuring that the set prices are covering the cost and profit.  These are some of the standards features of restaurant accounting software but you can have desired customizations with the help of IT consultants.

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