Make Magic With Your POS System

The customer is always right, even when they butcher an order beyond belief. Substituting chicken for beef, changing the sides, adding an extra sauce and asking for the order in a larger size all at once; it happens. Servers and chefs bend over backwards to accommodate these requests, but the restaurant may eat the cost in the end because their point of sale [POS] system can’t account for all those ad hoc changes.
 
The answer lies in gearing your POS system to account for extraneous costs, as well as detect how often customers are making menu substitutions. These patterns are tracked through monthly sales reports. These reports are usually PDF’s or excel documents that track the sales and total revenue from each menu item, grouped by category. Gearing your POS system to correctly categorize ‘special orders’ allow these sales reports to accurately monitor costs, sales and profits.
 
POS alignment can certainly seem like a complex issue on the surface, but it’s much simpler than it sounds. To demonstrate the process, I’ll go over a consulting project that I recently completed for an independent pizza restaurant, where POS alignment was a significant issue, but also easy to solve. 
 
The restaurant’s menu consisted of all the essentials you’d find in a quality pizza spot: basic and specialty pizzas, pasta, sandwiches, salads, appetizers and desserts. Their monthly sales reports reflected each item’s sales, grouped by menu category. The problem came with combos and bundled items, as well as menu additions and substitutions. Here are a few things to avoid...

• The top-selling combo, two pizza slices and a soda, did not track which kinds of pizza were sold. Customers were paying the same price ordering two expensive specialty slices as they were for ordering two cheese slices. Because this combo accounted for a significant percentage of total pizza sales, the owner could not accurately predict inventory or correctly set prices.

• Similarly, the sandwich/salad/drink combo did not account for the type of sandwich and salad ordered, leaving the owner unaware of which [more expensive] sandwiches and salads to potentially upsell on the combo menu.

• Sales reports included ambiguous terms across menu categories that did not correspond to any menu-related offerings. This ambiguity left thousands of dollars unaccounted for every month, whereby the owner could not conduct necessary analyses to determine the success of each item.

• Sides and substitutions did not accurately reflect menu prices and were scattered across categories. For example, substitutions to specialty pizzas were grouped in the toppings category for custom pizzas, making it impossible to determine how often adjustments were made to existing pizzas vs. how well toppings were selling on their own.

 
Two menu categories were sometimes grouped in the same line item. For example, the restaurant had an appetizer of three meatballs, as well as the option to add three meatballs to pasta. On the sales report, they both showed up as ‘3 meatballs’ in the pasta section, making it impossible to determine how often the appetizer was selling vs. the add-on.
 
To fix the above problems, try reformatting your POS system to accommodate the following…

• Create sub-categories for combo items. The charges can still show up in the general combo line, but you will have a breakdown of each component within the combo. The pizza restaurant could see how many slices of cheese pizza they sold as part of a combo vs. slices of Hawaiian pizza.

• Once you have these sub-categories set and a few months of data to see which items are commonly ordered, identify upsell opportunities. If customers consistently ordered meatball subs, which cost more to make, the pizza restaurant could introduce a scaffolded pricing option that charged 49 cents more for adding the meatball sub.

• Go through each POS line item and make sure it corresponds to an existing menu item and accurately reflects sales of that item.

• Create sub-categories within menu items to track adjustments made to those items. The pizza restaurant could see common changes made to their specialty pies, and either modify or create new specialties accordingly.

• Create separate names for separate items, differentiating by category if need be. The pizza restaurant could input ‘3 Meatballs Side’ and ‘3 Meatballs App.’

 
Aligning POS data allows owners to make key decisions to change ingredient mixes and prices, as well as add and remove menu items in their entirety. These decisions increase customer satisfaction, as well as front-of-house and kitchen efficiency, which all goes straight to that magical word: profit.

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