Courtesy of PointofSale.com | By Mike Monocello

“If you can’t measure it, you can’t manage it.” The axiom has become a staple catch-phrase for many businesses because, for the most part, it’s true. Without data, it’s difficult to understand what’s happening in your company. It becomes challenging to make effective decisions, and know if those choices made a difference.

Enter your point of sale system. Your POS system should provide you with a range of reporting features that will help you make smarter, more informed business decisions.

Let’s take a look at some of the essential POS reports you’ll need to run a successful small business.

Sales Reports

Sales reports are the most common reports that contain essential details concerning sales. The sales data available to you depends on your POS provider, but you should be able to track sales by the following criteria:

• Period of time. This measurement is useful for spotting trends such as peak hours, comparing sales year-over-year, or the effectiveness of a special promotion.

• The number of guests. This assessment lets you know how many guests dine with you and their average spend amount.

• Table turn time. Measuring table turn times gives you insight into how long it takes a table of guests to dine from start to finish. This measurement can help you determine the profitability of every seat in your restaurant.

• Sales by server lets you know what employees are your top performers and which ones may need some extra training.

A reliable restaurant POS system should give you the ability to track sales metrics like these to help you better understand how sales are stacking up across your business.

Product Mix Reports

For a more in-depth view of restaurant sales, your POS system should offer product mix reports. These reports show you sales by item, category, or department. Know what dishes or drinks are your top-selling items and what ones aren’t cutting the mustard.

When you consider the cost of ingredients for menu items, this prompts you to make smarter decisions. For instance, you may decide to cut certain less popular menu items to save money and improve your bottom line.

Inventory Reports

Just as important as sales reports are inventory reports. Without stock, you have nothing to sell to customers. Telling a patron you’re out of a particular dish or ingredient to mix the perfect cocktail doesn’t make a great first impression. Nor is it a good strategy for long-term success. Inventory reports will allow you to track your use of ingredients to better plan for future sales.

Additionally, without inventory controls in place, you might not notice if an employee is helping themselves to a steak dinner and a bottle of wine on your dime.

Make sure your inventory reports give the following:

• Inventory valuation so you know how much of your cash flow you have tied up in stock and what inventory you have on-hand.
• A daily fresh sheet that includes par levels, quantities of products on-hand, and low stock items so you can easily reorder.

Labor and Employee Reports

Besides sales and inventory, employee labor costs are another top pain point for most small businesses.

Labor reports can show you several insights into how employees are performing and how much it costs you to keep them on board. Many POS systems include integrations for third-party software solutions that allow business owners to manage employee scheduling tasks and payroll programs.

While employee reports won’t give you the answer, they will get you to start asking questions. Is there a reason why two employees working the same shift have vastly different sales numbers? Is one better at up-selling drink specials and appetizers than the other? Does one employee not turn tables as fast as another?

Employees are one of your biggest assets, and that’s why it’s so important to keep tabs on this area of your operation.

Exception Reports

Exception reporting is a must-have in any restaurant POS reports suite to help you keep tabs on employees. These exception reports show you all the voids, refunds, and discounts for a given time by staff members. This information is useful in determining a few things.

1. If you have an employee inadequately trained on the point of sale software
2. If you have an employee that is not familiar with your discount policy
3. If you have a crafty employee trying to steal

All of this data helps you determine areas of your business where you need to make improvements. For instance, a more comprehensive employee training process or doing more due diligence when hiring employees to try to vet out the bad apples.

X Reports and Z Reports

Whether you own a full-service restaurant or a quick-service (fast-casual) restaurant, X’s and Z’s are a part of your day-to-day procedures. At the end of each shift, the server, bartender, or cashier will print a shift report or X report of their daily sales. These reports typically have a wealth of information such as:

• Individual total sales for food and beverage, along with a cumulative total

• The number of guests served during the shift

• Cash tips and credit card gratuities owed to the employee

• Coupons, promotions, or discounts applied

While X reports give you shift details or current, real-time register information, a Z report is the end-of-day report that you’ll use for bookkeeping purposes. If you’ve ever heard the term “Z out,” it means to print the end-of-day report from a cash register. A Z report for a POS system is the same thing, except with much more data than its predecessor.

Accounting

Not only will you be thankful for the data on your daily Z reports, but so will your accountant. Since your POS software is the backbone of your business, it’s critical that the software can generate accounting reports to pass on to your bookkeeper. When tax season comes around, having everything in one location will be a big time-saver.

Payment Reports and Gift Card Reporting

Knowing how customers pay is another crucial piece of data that not only help your accountant will appreciate, but also the manager on duty.

Your POS reports should itemize transactions by tender type such as:

• Cash
• Gift card
• Credit card (Visa, Mastercard, Discover, American Express)
• Debit card

This information gives you insight into how much cash you should have on-hand and if anyone made a purchase with a gift card, so your liabilities reports are accurate. Also, the breakdown of credit card payments by card type will tell you how much money you can expect in your bank account from your merchant processor.

CRM and Loyalty Programs

Customer relationship management (CRM) is the technology that’s used to manage your relationships with your customers and often connected to a customer loyalty program. Assuming that your POS system has a CRM system, you’ll be able to run reports that show the following:

• A customer’s average check price

• The last time they dined at your restaurant

• Their most frequently ordered items

• Special occasions like birthdays and anniversaries

These reports can help you create future marketing offers that provide additional positive returns. For example, knowing what customers are most loyal and what they like to eat can allow you to create powerfully effective offers.

Marketing reports give you a deeper understanding of customers’ purchasing behavior, so you get the most from your restaurant POS system. Take advantage of this information by engaging your customers based on their interests.

The Bottom Line

Of course, there are dozens of additional POS reports available that you could use to measure and manage your restaurant. However, it’s not the number of reports your point of sale system can produce, but rather the quality of those reports. Do they give you the information you need to run a successful business?