Are You Losing Profit without Realising?
Stock Control – we all know what it is, but we often forget it’s importance. The word ‘Stocktake’ can make even the humblest of staff cringe, a task that is more often than not pushed aside to be dealt with by your future self. But do you have any idea how much money your business could be losing through lack of stock control?
Numerous industry analysts reported that a business that did not implement stock control would lose between 10% and 30% of their purchases to theft, incorrect handling and mismanagement. This means a small restaurant purchasing $5,000 of stock per week would potentially lose up to $78,000 in profit without even realising (McClurg, 2011)
Considering just under 60% of hospitality based businesses fail within the first 3 years of opening, it’s a pretty big issue!!
The first step in minimising your losses is becoming aware of them! This is where those horrible few hours of stocktake really earn their worth. This is also when you can really use your Point of Sale system to your advantage.
Enter Your Ingredients
Your POS system has the ability to track the amount of stock sold every day when it is provided with the right information. Something as simple as a chocolate bar can easily be tracked by the number of items sold. A spaghetti bolognaise on the other hand can get a bit trickier as there are numerous stock items (spaghetti, sauce, cheese etc.) sold at once. Tracking to this level, however, is how you go about putting those profits back into the business. Although a hefty task at first, entering the ingredients of each of your menu items is the only way to truly track all of your stock.
Feel free to contact Creative Point of Sale about entering ingredients.
Enter Invoices and Transfers
Entering your invoices lets the system know what you’ve actually got, and therefore where your stock levels should be. Don’t forget to also let it know when you are transferring/removing stock items!
Complete Your Stocktake!
And I’m not talking once a year here people! The more frequently you complete a stocktake, the quicker you can pick up on variances. Small to medium size businesses should aim to complete a full stocktake weekly, while larger pubs and clubs should aim for once a month.
Work Out Where Your Variances Are
Now that you’ve completed all the hard work, you can finally see the results! From here, you can work towards discovering where the discrepancies are occurring. Do you potentially have staff with sticky hands? Is stock expiring before its being used? Are staff using more stock than the recipes (and therefore your cost prices) account for?
Come Up with a Solution Based on The Problem
Now that you’re aware of the issue, it’s your responsibility to find a solution. As each business is different, there is no one answer for bringing those lost profits back to the business. However, you can do your best to use your POS system to help you out!
- By analysing the data presented by your Point of Sale system, you can calculate optimum stock levels for all of your stock. This can free up costs usually tied up with holding too much stock and maintaining unnecessary stock holding areas, while also helping reduce loss of sales due to lack of stock.
- If staff theft is a potential issue, talk to your POS Sales Representative about improving staff tracking.
- Use the system to accurately monitor cost prices based on the amount of ingredients used to ensure all menu items are in fact making you a profit.
- Use your Wastage Feature! You may be shocked by how much food is truly being wasted once a weeks’ worth of wastage is presented in front of you. Use these figures to purchase stock more wisely and cost effectively.
If you would like to speak to us about minimizing the pain of implementing stock control, please contact us at Creative Point of Sale