Improve Efficiencies During COVID-19

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During these uncertain times, it’s more important than ever that businesses can operate as efficiently as possible. By analyzing and monitoring operational data, such as inventory and labor reports, businesses like restaurants can identify where or how to make changes to increase these efficiencies and save costs.

A robust POS system will include features such as inventory and labor controls to provide data on how and where individual ingredients are used, and show how much of your spending is going towards staffing needs. Knowing how to read and understand these reports will help target how and where improvements or adjustments can be made to protect your profits and allow your business to thrive.

 

“Poorly managed inventory and labor are the top two reasons restaurants go out of business.” - Don Potter, Restaurateurs - Protect Your Profits!

 

Inventory Control

Do you find your kitchen staff runs out of certain ingredients, leaving them unable to make your customers’ favorite dishes? Or maybe what you spend on ingredients doesn’t add up to what your revenue data shows? By utilizing inventory controls through your POS, you can keep tabs on how much of inventory is used over time, and gain insight if you suspect employee theft.

Invoices will only show what you’ve spent on ingredients; it won’t show where those ingredients are used. Let’s say you spent $1,000 on steak this month but last month you only spent $750. Did more of the steak go missing last month which prompted you to order more this month? Perhaps the steaks spoiled too quickly, or maybe more dishes that use the steak were lost because they were not properly prepared. Whatever the case, this can be tracked within a robust POS system. As you review the inventory reporting, you can pinpoint precisely where each ounce of steak was used, and make educated purchasing decisions in the future.

The restaurant industry is notorious for employee theft. It’s all too easy for waitstaff to help themselves to certain items which can negatively impact your bottom line. Inventory controls allow you to track more than just ingredients used by the kitchen. Items such as liquor and wine can be tracked through the same method. If a particular vodka is used to make drinks, that vodka can be tracked to understand where it is being used and lost. If the reported usage does not match what shows in beverages that were purchased, this might be a red flag that your bar staff is giving away liquor.

 

Labor Management

Is there a reason why two employees working the same shift have extremely different totals in sales? Why does only one of your bartenders always have more than 40 hours worked each week? Your labor reports can provide insight into how your employees are performing. Similar to inventory reports, labor management reports will show you where and when hours are used, and where you can cut back when necessary.

Labor reports won’t give you all the answers, but they will help you identify areas of improvement and alert you when any scheduling concerns arise. When not managed properly, labor costs can quickly spiral out of control. For instance, you might notice that a bartender always has overtime, but is only scheduled to work 40 hours each week. When you take a closer look at his time clock punches, you see that he clocked in 30 minutes before each of his five scheduled shifts – that’s an additional two and a half hours every week! If every employee does this, your labor costs will quickly go well over the amount you have allotted.

Labor reports will also give some insight into how your employees perform during each shift. Over the course of a typical month, you notice that sales have dropped on Wednesday nights, but your labor remains the same. This might be a good indication that you can reduce your waitstaff on Wednesday nights. By scheduling fewer servers, you can increase their productivity while reducing your labor costs.

 

By monitoring critical data like inventory and labor usage, business owners can re-examine their needs and make adjustments that will bring about more efficiencies across their operation. You can learn more about how inventory and labor controls can help your business by downloading excerpts from Don Potter’s book, Restaurateurs – Protect Your Profits, from the link below.

Tags: labor, management, Solutions, Inventory

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