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POS Reports: Take Time to Learn How to Use Them

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October 01, 2002
Point of Sale Reports
Mike J Pappas - papcfy@aol.com

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© 2002 Hospitality Upgrade. No reproduction without written permission.

The few minutes it takes to print and quickly analyze POS reports could mean thousands of dollars in savings and profits during the year.

The first thing I read when I get my copy of Hospitalilty Upgrade are the jokes on Rich’s Junk Mail page. So when Rich and I talked about my writing an article, I thought he would want me to do a series of jokes for the magazine. But that wasn’t the case. Rich wanted me to write about something that would benefit his readers (so much for the jokes).

Rich and I go back a few years when we were both publishing technology newsletters. We both got out of the newsletter business and Rich went on to greater things. Me? I went back to managing the restaurant that my dad started in 1923, nearly 80 years ago.

With my restaurant and technology background, I thought if I couldn’t tell jokes, I would talk about one of my concerns with restaurant management. And that concern is that foodservice operators purchase fancy POS systems that give them tons of valuable information and then they don’t take time to learn how to use that information to increase profits and eliminate problem areas. Let me give you a few examples.

Sales Analysis
Every POS system that I am familiar with tracks how many menu items you sold during a specific period of time. This is a valuable report because you can pinpoint many food shortages. For example, assume you had 12 filet mignons at the beginning of the day and at the end of the day they were all gone. That means you should have sold 12 filet mignons. Yet, the report shows only 10 were sold. That means two filets disappeared somewhere. One scenario is that the dishwasher ate one medium rare with baked potato and the other one went home with a server for a midnight snack.

Another reason to use this report is to track items that sell well and items that do not sell well. Without going into detail, you need menu engineering to separate high profit, high volume items from low profit, slow selling items. The last issue of Hospitality Upgrade had a good article about menu engineering written by Dr. Michael Kasavana.

Every restaurant operator should know the importance of menu design. If they don’t, someone please help them. As an example, assume you have an excellent menu item with a high margin of profit; however, according to your product mix report that menu item is not selling well. It could be that it is buried on your menu with other low profit items. If that is the case, you should redo your menu and rearrange it so that your high profit items stand out.

The next subject of interest is voids. I recently dined at a major national family restaurant and overheard the customers at the table next to mine tell the server that their order was wrong.

“Oh, I’m sorry,” replied the server. “I’ll void the mistake from your guest check.” Later, out of curiosity, I asked the server if having to find management to void the error took very long. “No,” the server said, “We do our own voiding.” What a management error.

Employee theft is a major problem with all foodservice operators and voided menu items are a major target. For this reason management should be the only ones with the authority to void a menu item. Remember those two missing filet mignons? That server could have served her family or friends the filet mignons, voided them and reissued them a guest check with two lesser-priced items. It happens, and I’ll bet it has happened to you.

My POS system tracks voids in five categories. They are food items that are 86’d, over-rings, dissatisfied customers, customer left and server errors. These five categories probably cover most of the reasons an item is voided, although I know there are more.
86’d Items
I don’t know of any manager in the country who is good enough to predict what will sell during the day. Therefore, a restaurant will occasionally run out of a menu item. The thing to look for here is to see how often and what item is being 86’d. If there is a pattern it can be easily corrected by instructing the prep cooks to prepare more.

Over-rings happen to the best of people. An example of an over-ring might be when a server enters a menu item twice. Since POS systems are so fast it is easy for a server using a touchscreen to keep their finger on the menu item too long and order the food item more than once. Naturally, this means a food item is wasted because it is prepared twice. If the same server is responsible for many over-rings, train them to touch the screen lightly.

Dissatisfied Customers
One major concern of voids is dissatisfied customers. That’s the last thing any restaurant owner wants. And for this reason this item should be investigated on a regular basis. The important thing is to find out why the customer was dissatisfied. For example, if many customers complain about tough steaks, then you had better look at the quality of meat you’re getting. If a large number of customers complain about steaks being overcooked, then you had better get on your line cooks to do a better job. If the customer is dissatisfied because of service, then you had better find out who and why.

Customers Leaving
There is always a reason why customers get up and leave. Perhaps they did not get waited on; maybe their order was slow in getting to them; or, and I’ve seen it happen, they get in a family argument and they just pack up and leave. Whatever the reason, management needs to know why and try to solve the problem.

Server Errors
Finally, there is the problem of server error. This could be as simple as putting a menu item on the wrong guest check to a server making erroneous charges. What you will find when you track this item is that it is usually the same server who keeps making the errors. I had a situation where a server kept making errors. We eventually discovered she needed eyeglasses.

There are numerous other reports that are valuable and should be looked at and analyzed frequently. It only takes a few minutes to print these reports, yet many operators do not take the time because they are too busy, the cook did not show up, they got slammed during a rush hour, they were just too tired or they didn’t have time to get around to it. The few minutes it takes to print and quickly analyze those reports could mean thousands of dollars in savings and profits during the year.

Mike J. Pappas is the owner of Pappas Sweet Shop Restaurant. He was the founder of “Computers, Foodservice & You,” a newsletter on computer technology for the restaurant industry. He also authored the book, Eat Food, Not Profits: How Computers Can Save Your Restaurant. He can be reached at mailto:papcfy@aol.com.  

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