POS Systems, more commonly known as point of sale systems, are devices that track any and all transactions that are processed at the “point of sale.” Originally used as a cash register, POS systems have roots dating back as far as the late 1800's in Dayton, Ohio. Inventor James Ritty, “father” of the cash register, opened an immensely profitable saloon in 1871; however, Ritty ran into a transaction problem with a couple of corrupt employees. Cash was filling the pockets of employees rather than the saloon and a disgruntled Ritty decided to change the way money was handled. On his third attempt at a device he created Ritty's Incorruptible Cashier; a POS Systems, more commonly known as point of sale systems, are devices that track any and all transactions that are processed at the “point of sale.” Originally used as a cash register, POS systems have roots dating back as far as the late 1800's in Dayton, Ohio. Inventor James Ritty, “father” of the cash register, opened an immensely profitable saloon in 1871; however, Ritty ran into a transaction problem with a couple of corrupt employees. Cash was filling the pockets of employees rather than the saloon and a disgruntled Ritty decided to change the way money was handled. On his third attempt at a device he created Ritty's Incorruptible Cashier; a device that not only registered the transaction but also stored the total transactions for the day. Point of sales (POS) systems have taken the restaurant industry by storm and are continuously evolving since the introduction of Ritty's incorruptible Cashier (later to be called the cash register) (Revel Systems, 2014). In recent years POS systems have decreased in size and increase in portability and ease of use, and with the introduction of cloud computing and increasing importance of eCommerce information stored and shared on modern POS systems can be accessed anywhere, at anytime, by anyone (Walker, 2012). It also allows for mobile devices such as an iPad to become a portable POS. The basic purpose of a POS is create relative ease in the restaurant business. Making the processes of writing checks, taking and making orders, and inventory management easier allowing employees and management to spend more time pleasing guests (Wuorio, 2011).
In the mid to late 1970's IBM began making POS systems using computers and thus opened up an entirely new world to restaurant management. These new computerized POS systems came with basic inventory functions which allowed anyone to look up which items were selling and which were not. With these improvements restaurants and bars alike have begun to run entirely on POS systems (Revel Systems, 2014). They decrease the level of human errors, increase productivity, provides backup data for lost tickets or misplaced orders, quick and easy calculations, tip calculator, management functions, among many more. This website covers the importance of these functions to business/management decisions such as menu engineering, staffing, training, financials, inventory, and many more. This site will also provide a Strength Weakness Opportunity and Threat (SWOT) analysis of POS systems.
POS Systems: Making Better Choices and Using Information to Get Ahead Managing a restaurant is no small feat. It requires constant upkeep, control, and preventative measures. To do this a manager must be fully aware of inventory, staffing, food cost, food item popularity, and employee time management among other things. They have to keep track of all of these numbers either by hand or electronically. As trends shift towards technology integration, POS systems are becoming more and more popular because of the increasing ease of use and the management functions they provide (RestaurantNews, 2014). With a POS system a manager has better control over his inventory and can stop a "sudden shrink" from occurring. Point of Sales systems are designed to immediately record any and all sales. Not only does that mean timely and accurate sales tracking, but a POS system also lets you readily identify inventory levels, particularly when what you have on the books doesn't jibe with actual stock. This also helps management to discover theft by keeping up with inventory and seeing a sudden shrink or discrepancy with the books. They know something is a miss. Using these basic inventory functions, a manager can easily see which items are sold more often, look at past years data and help forecast for the upcoming period (Wuorio, 2011) Management can also utilize a point of sale system's ability to evaluate employee performance. Checking each workers daily average check size a manager can see what and how much an employee is selling (Wuorio, 2011). If one employee is pushing alcoholic beverages more than anyone else and successfully selling them, you want to reinforce that behavior. If an employee is not charging guests for drinks to make a little extra in tips this can be pointed out and then reprimanded easily using the POS data. This is particularly useful when management implements new strategies, training, or procedures to the restaurant. After training an employee or employees how does a manager know if the training worked? How does he know his new strategy or new procedure for something works? To answer these questions a manager must simply use the POS system. Using the average check function he can check in on any employee he may have empowered, trained, or corrected and see if their sales increase. He can also check to see the rate of use of food or food items if he decided to cut back on portions. Using POS average check data is crucial to employee empowerment and follow through (Kim, Losekoot, & Milne, 2013). Time management is crucial to any manager in the hospitality industry. Restaurant managers must balance their day and have no room nor the time to do things twice. POS systems allows your staff to tend to revenue generating tasks such as helping customers. It eliminates the need to double-check inventory disparities and cash register reconciliation. POS systems dramatically reduce the effort required to do inventory and other repetitive paperwork. Improved efficiency means higher customer satisfaction, lower costs and higher sales (Wuorio, 2011). This also gives a manager more time to do his job greeting guests, overseeing employees, and handle situations instead of double checking the revenue from last night, or the inventory.
Point of sales systems also track which specific menu items sell more than others. This is particularly useful for a process known as Menu Engineering. "Menu engineering provides the manager with information about a menu item’s profitability, as well as popularity, so that proactive planning, recipe design and customer pricing decisions can be made. Menu engineering is not a substitute for proper purchasing, food rotation, standard recipes or any of the other basic kitchen controls that can negatively impact your costs. Rather it is a method of evaluating every item on your menu relative to its present contribution to bottom line dollars, thereby allowing managers to recognize the items they want to sell!" (Nessel, 2012).
POS System in Action The food truck market has also benefited from POS systems being mixed with cloud technology. Successful food trucks and other mobile food dispensers have a lot of data to manage and control. Without using a POS system this could be costly and time consuming. However an Atlanta based food truck (Happy Belly) discovered this issue and decided it was time to use a Mobile POS. The functions that would normally be on a stationary POS is now available for download onto any mobile device. This allowed for their POS to also contact all followers on social media because of its integration with the mobile device (Hospitality Technology, 2014). The owner of the Happy Belly food Truck said "the mobile POS’ consolidated reporting features that enable users to track sales and cash for all mobile locations." The accessibility that Happy Belly has now allows them to make better purchasing decisions and plan more efficiently for events. It is one of many examples of how a POS system can greatly benefit a business See the original article here
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