Point of Sale (POS) systems

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1 Point of Sale (POS) systems Taken from Before You Begin This series of articles has three primary goals: to define Point of Sale (POS) systems, discuss their benefits, and help restaurant owners and foodservice professionals choose the right POS system for their restaurant. In doing so, it will describe what a quality POS system should deliver, the short and long term benefits of installing a proper system, and why an appropriate system will pay for itself in a very short time. Choosing a POS system that is not well to a particular restaurant can be a costly mistake, so the article looks closely at the different attributes that should be considered when investing in a system. What is Point of Sale (POS)? Point of Sale is equipment (hardware) and a computer program (software) that will allow servers in your restaurant to enter food and drink orders as soon as the customer gives the order to the server. Once the item is placed in the system, any modifiers to that item (rare, medium are, welldone) can be attached to that item. These modifiers can be either required (rare, medium-rare, well-done) or optional (extra sauce, no onions). In some systems, the item can display the food components of the menu item and/or suggest a wine that would go with that dish. How does a POS system work? The customer order is sent through a cable to printers that can be located throughout the restaurant (bar, kitchen, specific prep areas). Since all the food and beverage orders must be printed before they are prepared, control over the order process is implemented. Adding manager control over voids or any deletions then assures the restaurant owner that all that food will not be prepared unless it is on a guest check. Menu items can be added to the check anytime. Checks can be transferred between bartenders and servers anytime. Different menus (lunch, dinner, happy hour) can be activated automatically at any time of the day of any day of the week. Checks can be split between customers easily and efficiently. Even menu items can be split among customers (bottles of wine, pizza). When a server has completed the ordering for a table, a guest check can be printed and presented to the customer. Guest check messages advertising specials or upcoming events can be placed on the check and customized at will. After presentation of the check to the customer, promotions, discounts or comps can be effected. A good POS system can allow certain discounts, and require manager control over others. The check can then be presented and payment collected. The server will process the payment at the terminal. Charge card, cash, and check can be processed separately and reports generated by payment type when needed. This is just a general overview of what takes place during a POS transaction. POS as we have stated, a combination of equipment and software that can automate all types of transactions in your restaurant, making it more profitable. Lets' now loom at some of the most significant benefits afforded by a POS system:

2 Speed of Service As soon as a server places an order, it is automatically routed to the proper printer, and preparation can begin immediately. No longer will the server have to wait around the bar for their drink orders. The customer gets served in half the time as with manual systems. With some systems, the drink order can be sent to the bar immediately while the server is still entering the food portion of the order. In short, servers will never have to walk into the kitchen or bar to place orders. The chefs especially love this feature. Remember, the faster your customer is served, the faster that table can be turned over to new customers. The software can even generate a table turn report by section and time of day. Not all systems provide this valuable tool, so choose carefully! Accuracy of Orders When the server places an order, it is transmitted to the kitchen or bar, and printed on a paper tape that is bold printed and easy for bartenders and food prep personnel to read. No more hard to read handwriting, no more forgotten modifiers (give away items). No more angry chefs who cannot read an order. If a mistake is made, the hard copy is available for the manager to find out when the order was sent to the kitchen, what time, and by whom. It will also define each item with modifiers in bold red print. Security of Cash handling A good POS system will never be out of balance. Any food and beverage items cannot be prepared unless it is on the guest check. Once it is on the check, the server is responsible for collecting those items. "Server banking" is a method of controlling cash so that the server is responsible for his or her own sales. This method has its own pros and cons, and should therefore be carefully discussed with a consultant prior to being adopted. The most significant pro is that your restaurant will never be short. Discount Control Promotions, complimentary items, and employee meals can all be handled with absolute accuracy, and placed under manager control. Ease of Training In the restaurant business, employee turnover is higher than in any other industry, and training new employees can be an on-going problem. A quality POS system with icons and product logos can assist in training new employees into experienced operators in as little as minutes. If they can read, and point at the appropriate item on the screen, they can run the system. Again, you must ask for a program with icons. Theft Reduction Probably the biggest problem facing restaurants today is employee theft. Controlling this problem can significantly add to the restaurant's bottom line. According to Nation's Restaurant News, Up to 30% of all restaurants fail because of employee theft". It also states "almost one out of every two employees will steal from their employer if given the chance". Server Control which of your servers is making the most money and profit for you? With your current system, do you have any way of tracking the $$? Not just as sales figures, but to assess who sells the most profitable items.who is selling the most desserts..the most appetizers? Who in your restaurant should be rewarded? With certain systems, this information can be generated in a very short period of time. Increased Sales How can POS increase your sales? By rewarding servers for good performance! A simple sales contest can increase sales over 200% on popular items or groups of items. Tracking the contest is easy and automatic with quality software. One of our customers reports a 400% increase in dessert

3 sales when a contest is run. With a great POS system, turning your servers into salespeople is easy. Point of Sale (POS) systems Part 2 Last week, we discussed some of the most important benefits of POS systems: speed of service, accuracy of orders, security of cash handling, control over discounts and promotions, ease of training new employees, theft reduction, and control over servers. Today, we will continue that discussion by discussing the following benefits: Increased sales reporting Custom reporting Tracking server sales and performance Tracking menu item performance Tracking food and beverage usage Cash back on credit card purchases Sales Reporting Extensive reporting is essential with any good POS system. The ability to customize those reports is even more important. The following sales related reports will let you make better business decisions about menu items, servers, and sales: restaurant sales reports, item sales reports, server sales reports, payments reports, void reports, time and attendance reports, profitability reports, and table turn reports. A well defined and established POS system will let you generate these reports by day, week, month and/or year in the past, or over any range you think might assist you in making better decisions. Custom Reporting A good POS system's reports can always offer you some form of customization to ensure that you generate the type of information that is particularly useful to the decision-making process of your establishment. Menu Item Performance What items on your menu are the most profitable, the biggest sellers? What is your daily profit by individual item? How much of an item are you selling in relationship to the main category, i.e., how much of your meat sales are in the form of steak in units, dollars and percentages? Food and Beverage Usage How many shots of Johnny Walker Black did I sell last week? Last Month? Last Year? How many 8 oz. Filet Mignon? How many did we buy? How many are left in the cooler? Credit Card Reporting A feature you wouldn't want to be without! A well-defined POS system can charge the server for the amount it costs you to process the tips on a credit card sale! This can add up to thousands of dollars in a year's time. All of this can go right back in your pocket! If you are like most restaurateurs, these are probably a few of the many things you would like to, but cannot accomplish because of constraints in terms of time and information. Now that we are well into our discussion of the benefits afforded by a good POS system, the time is right to help you understand what red flags are an indication of a definite need for a more

4 sophisticated control system. In a market where operators are facing the dilemma of downward pressure on margins, less than excellent service and business acumen can be very dangerous. So, be sure to check for the following, and take action today!! Wrong addition on guest checks Incorrect items being ordered Confusion in the kitchen Possible theft of money, food and/or liquor Inaccurate employee time keeping Ordering food or liquor without putting it on a guest check Not knowing sales breakdown High credit card processing charges and only one credit card device Wasted time walking to kitchen and bar to place orders Shrinkage - Use countdown on item buttons to track detail items. Be sure to continue on to the next segment to find out more about POS savings, etc. See you again soon - learn more when you read on! Point of Sale (POS) systems Part 3 Welcome back! We've discussed the extensive benefits of POS systems, so now let's see how these benefits translate into real dollar savings. According to information published by the National Restaurant Association, restaurants can expect to see the following savings per year. The figures are based on national averages, and reflect POS savings for a restaurant doing $1,000,000 in sales per year. Preset and standard pricing, coupon/discount control, and guest check-addition change calculation: 1% of sales or $10,000 per year Speed of service and increased table turns: 5% of sales or $5,000 per year Increased sales, suggestive selling, and sales contest: 1% of sales or $10,000 per year Processing fees, credit card tip reduction: Savings of $1,800 per year Total Savings: $26,800 per year The above calculation does not take theft prevention, streamlining of kitchen and bar orders, control of prepared items or increased accuracy of sales data into account, so in reality, expect to save much much more! TYPES OF SYSTEMS All POS systems belong to two distinct types: Proprietary and Non-Proprietary. The differences are

5 as follows: Proprietary Systems Generally constitute parts from a single manufacturer. Micros and Remanco are examples of proprietary systems. These systems for the most part, use only hardware (printer, touch screen, etc.) made by that company. For example, if you buy a Micros system and want to connect an additional printer to the system, the only printer that you can use is one made by Micros (with their special chip - subject to change). Typically, proprietary hardware is more expensive, limited in availability, and service on these products mostly comes from the dealer who installed the product, no matter what they charge. Non-proprietary Systems These are also known as open systems. They can be fitted with "off the shelf" hardware made by various manufacturers, with a standard PC based computer as the platform. This open architecture idea easily lends itself to the ability to customize the perfect system for each restaurant, and therefore should be a key determinant in the decision to go with a particular POS vendor. Windows or Dos? Believe it or not, there are still vendors for DOS based POS systems! Since the world has clearly chosen the path of windows, with its superior user friendliness, a DOS system is not advisable. Why? In addition to the fact that Windows is easier to use, it also allows you to perform many jobs simultaneously. While the computer is running your POS system, you can type a new menu and daily specials, pay your bills, or write a letter... all at the same time. HOW TO CHOOSE THE RIGHT ONE So far, it seems to make sense for most restaurant owners to consider a non-proprietary system with a software package specifically designed for the windows environment. When deciding on a software package, restaurant owners should be sure to get answers to the following questions regarding the company producing the software: How long has the company been in business? The answer to this can indicate a true commitment to a quality product, or indicate a new company with an untested product. Beware! How many employees work for the company? Obviously, a company with a greater number of programmers indicates not only a commitment to a quality product, but also timely and more frequent new feature releases. Does the company's focus extend to the foodservice and hospitality industry or are they grocery specialist? Does the company have any major accounts using their system? A software company with major accounts such as Dunkin Donuts, Wendy's etc., has obviously proven itself to corporate accounts. These major accounts have very specific quality standards and will usually not allow substandard software to even enter their restaurants. Is the software written in a single language? We have seen software that contains half its commands in English and half in French!! So make sure your software consistently uses the language you do, or provides bi/multi lingual capabilities. This closes our discussion for today, but stay tuned for more on POS Next week, choosing the dealer, means of payment, and more!

6 Point of Sale (POS) systems Part 4 I hope you now have all the right tools to choose a POS system that works for you! Let's continue on to discuss two more important aspects of the POS decision-making process, i.e., choosing the right dealer/distributor, and paying for your system. EVALUATING A DEALER A dealer who has extensive experience in the restaurant business would be a great resource in terms of equipping you and your employees with the knowledge and tools to resolve common issues. Most importantly, this type of professional will be always available after the sale is completed. You must ask a dealer/distributor these questions before considering giving them your business: Is the dealer local? Dealers will travel great distances to make a sale, sometimes too far to support you adequately. Imagine having to wait for a dealer based in Connecticut when your restaurant in New Jersey has a problem on Saturday night? Do they offer service 24 hours a day, 365 days a year? As we well know, break-downs do not occur conveniently between 9-5, Monday thru Friday. A dealer who offers after hours on sitesupport staff is much more valuable than those who will get back to you on Monday. Are people from the company from the restaurant industry? Do they understand your problems? Do they sell software to other industries too? Ask! Ask! Ask! What is the Guarantee? References? Ask dealer references about the software, any problems, training etc. Ask the reference if she/he knows where else the system is in use, and call them too. PAYING FOR IT ALL. You've seen what POS can do for you you agree that it is the right thing to do.you realize that the controls are necessary to maximize your profits..but,. the pressing question is: How do you pay for it all? Most dealers offer leasing programs that can be tailored to fit the individual needs of the restaurateur. There is no doubt that the right dealer will work with you to fund the system that works for you! Remember, these are the features you should not live without: Color Touch Screens On-Screen Guest Check Automatic End of Day View open checks on screen at any time Reopen closed checks Time and attendance and labor scheduling (Optional) "Fast Cash" Bar processing Tip Charge Backs Item Holding

7 Inventory Control Reporting Training Mode Use of full color menu buttons with your choice of size Table Turn Report Splitting items/checks Automatic 86ing with "Out of stock" display and printing capability Custom Reporting Guest check transfer and ability to combine checks Guest count tracking Infinite number of days of data stored for reporting Edit time and attendance for prior days Custom guest check messages Up to the second sales information House account tracking Automatic tip sharing Password protection Send & Stay feature for order processing This brings our four-part series to an end. If you want to put POS to work for you, and make more money right now, call us, and ask a hospitality consultant to answer your most pressing questions. Submitted by Sal J. Balistreri Sal J. Balistreri has been working in the computer industry for well over 25 years. His experience covers applications in the retailing industry with a focus on hospitality. He has lectured students at The New York Restaurant School covering topic such as, "Computers in the Restaurant Industry". Contact him with questions and/or comments at: Sal J. Balistreri eastcoastpos.ca

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