March 3, 2021

Why Relying on Food Inventory in a POS Is Not Sufficient

Too many restaurants rely solely on their POS when it comes to food inventory management, but this is not enough. Learn how you can improve with these tips!
By
Ciprian Rarau
Share

Food inventory management is a central job for any restaurant or kitchen manager. It’s a constant balancing act of keeping enough ingredients to fill every order, but not so much that food spoils and you lose money on it.

Digital food inventory management, in particular, provides a host of other benefits for businesses like:

  • Tracking ingredient and food costs changes so you can keep your menu prices up-to-date
  • Preventing over- and under-buys
  • Tracking popular and unpopular ingredients to make menu updates
  • Tracking the total cost of your inventory at any given time
  • Improving your customer service by providing servers with complete transparency on sold-out menu items
  • Helping you keep accurate inventory records based on your restaurant's standards

Many restaurants track their inventory with pen and paper, as that’s the way kitchen managers were trained for eons. But the above benefits are virtually impossible to achieve manually. Just trying to get inventory counts right takes so much effort that there’s very little time left for analysis of the used or available inventory. Moreover, you’d have to be a spreadsheet wizard to gain most of the insights an inventory management solution provides automatically.

Many restaurants begin to experiment with digitally tracking stock levels by using the features built-in to their point-of-sale (POS) system

What is POS software?

A POS is the platform on which a restaurant (or retailer) runs its sales transactions. They can initiate a transaction, take payment, hold a catalog, run discounts, and more.

Restaurant POS systems specifically connect the kitchen and floor staff, so that the kitchen can see orders without waiting for the staff to run to the back. Management can keep track of KPIs like sales over time, which servers are selling the most, and which items are the most popular.

With the advent of easy-to-use, budget-friendly POS platforms, most restaurants run on a POS system, even tiny food kiosks.

Many POS systems also have inventory management features built-in. Since these features typically come with the POS subscription, it's with these stock management tools that restaurants first experiment with digital inventory keeping.

Common inventory management features in a POS

With that said, let’s take a look at the common inventory management features that a POS contains. The features are broken into three types: stock management, order management, and analytics.

Stock management features

Because the inventory management tools in a POS are developed to make selling easier for retailers, the inventory management system is usually oriented around stock management features for keeping a catalog up-to-date. Typical features include:

  • Creating products, including product variants and SKUs
  • Set up of a catalog or menu complete with specific item details and characteristics
  • Tracking inventory count and inventory records across all locations
  • Low stock notifications
  • The ability to set and change product prices
  • The ability to set discounts, promotions, and create coupons

Order management features

Typically in POS software, order management features are the least robust, although this is likely to change as POS solutions work to develop into retail suites.

  • Import products from catalogs that the software integrates with to reduce manual product entry
  • Place some products and stocks on auto-reorder, usually from vendors the software partners with

Analytics & Forecasting

Any inventory analytics features in a POS will be oriented towards managers trying to make sales decisions. As a result, these reports are most often an extension of the POS’ sales reporting features. Most modern point of sale systems also track and report on data in real time giving users up-to-the-minute information on what's going on in their businesses.

  • Track inventory usage over time
  • Track unit costs, margins, and expenses
  • Track how long certain products have been on a shelf for
  • Track inventory turnover (i.e, how fast an item is selling)

The limits of POS inventory management

While experimenting with your built-in inventory management features can be a great way to start getting comfortable with managing your inventory digitally, POS inventory management systems are very limited. As noted, the tools are usually built for retail businesses, not the restaurant industry. As such, they don’t have the complexities necessary for restaurant inventory tracking.

That's why if you use your POS’s inventory management, you’ll find that you’re completely lacking features or relying on circuitous workarounds to make a retail feature work for the realities of the kitchen. POS inventory management often lacks key features like scale integration, barcode scanning, and recipe creation.

What is restaurant inventory management software?

Restaurant inventory management software is built specifically for the unique needs of restaurants, bars, food trucks, and other food-centered businesses. Restaurant inventory management tools understand that your inventory often isn’t your end product — rather, items get put together to create a meal or menu item

As a result, there are a number of features that can only be found in restaurant inventory management software. These features are made for food inventory managers specifically and will help a kitchen achieve peak efficiency.

1. Reports made for restaurants

While POS solutions provide many important reports, restaurant inventory management reports are created to provide insight into the kitchen in a way retail inventory system reports just aren’t.

Reports unique for restaurants’ inventory control include:

  • Sales versus consumption, so you can easily compare how your recipes are selling compared to the associated food costs. This report also makes it simple to track spillage, extra portions, or theft.
  • Over-stock reports to help you get rid of dead inventory. Industry data shows that 4-10% of food in kitchens is wasted before it ever makes it onto a plate.
  • Cost differences in inventory. As the cost of ingredients change throughout the year, you can decide what to discontinue, which recipes to raise the price on, and more.
  • Sales-based stock estimation, so that you can have an idea of what inventory is left in between counts. Ingredient levels are harder to track than typical retail inventory levels due to eyeballing, spills, and other activities unique to cooking. Restaurant inventory management software is often set up with these things in mind so it keeps a more accurate estimation of available inventory, rather than tracking it exclusively based on menu items sold.
  • Smart order forecasting so you can forecast which menu items are likely to increase or decrease in popularity.

2. Unique methods of inventory control specific to restaurants

Inputting food inventory can be very different from inputting other types of inventory. For instance, weight is often how kitchens measure a unit of inventory (e.g. you don’t track your rice levels by individual grains, but rather by weight of the total amount of rice).

So food inventory management systems often have scale integrations for measurement tracking. Scale integration allows the tool to pull the weight of an item directly from the scale, no manual entry required. The best food inventory systems (like WISK) even provide Bluetooth scales that are capable of reading exactly how much liquid is left in a bottle.

A restaurant inventory management system can also scan a barcode to input a product, avoiding human error and discrepancies during entry.

Finally, some restaurant inventory management systems integrate with various food vendors and catalogs, so that you can choose from pre-uploaded items, as well. (POSs will generally promise this feature, but it's essentially useless for kitchen managers since the catalogs are rarely ingredient-oriented.)

3. Ordering features made for food items

In general, a restaurant has a higher inventory turnover than retailers. Ordering food inventory happens more frequently than other types of items, as food often quickly spoils. Food items, for instance, should be turning over 4-6 times a month.

A restaurant inventory management tool should be able to set customizable levels for when an ingredient is low. These pars can trigger orders directly to your vendors to keep your inventory full and fresh but never overstocked. The pars can also trigger notifications to you and your staff.

The inventory management tool should also integrate with food vendors so you can purchase orders directly from within the system. (This is another tool many POSs claim to offer, but they often only integrate with retail-specific vendors.)

4. An offline mode for Wi-Fi-less venues or cellars

Food service often takes place in unexpected locations. Whether you’re testing a pop-up venue or figuring out how to make pandemic restrictions work for you, your business needs to be able to track inventory anywhere. At WISK, we offer an offline mode that is fully featured, so there’s no loss of activity when you lose Wi-Fi.

5. Providing alerts to your staff about low-inventory items

Alerts for low-stock supplies or menu items will help improve your customer service. Your servers will be able to give your customers an accurate view of what menu items aren’t available without running back to the kitchen. The alerts also eliminate the friction that occurs when a server needs to cancel a placed order for an out-of-stock item and retake the customer’s order.

The solution for restaurants

Ultimately, a restaurant needs both a POS and a specialized inventory management tool to run at peak efficiency. That’s why we recommend using an inventory management tool that integrates with your POS system. (WISK integrates with more than thirty POS systems.)

With an integration, you can keep the inventory management’s sales reports up-to-date and accurate at all times. WISK’s integration can read the recipes sold in the POS and quickly break that into inventory reports for you.

WISK is the perfect tool for restaurant businesses ready to upgrade to an inventory management system built just for them. Try us free for 14 days now.

Share

Taking inventory should not take hours.