The 5 Incredible Differences of IMS (Inventory management system) and POS (Point of Sales system)
After the covid season is over, Restaurants should foresee that the number of dine-ins will spike. People will start spending quality time with their friends, family, or even catch up on some alone time, and what better way to do so, than having a meal in a nice restaurant. Hence, restaurants should take this downtime, to prepare to serve the best to their customers on a large scale. And what better way to do so, than learning about the Inventory management system (IMS) and point of sales (POS) system.
Many people mistake IMS with POS systems. Aren’t they the same thing? Do I need both systems for my restaurant? Well, not really. Unless you want to speed your processes up and save cost and time on doing manual paperwork, then yes! I’d highly recommend you to implement such solutions, hand in hand.
Both systems help an F&B business in different ways. But when used side by side, it works wonders! So let’s dive deep into what roles they play in your restaurant management system.
Inventory management system (IMS)
Managing your supply chain and food inventory requires diligence, but when done correctly, you can minimize food waste, save money on food costs, save time doing paperwork and trace all information effectively! How do they do that?
1. Forecast your inventory
You make no money on inventory until it's sold. Too much inventory can result in cash flow problems. But too little inventory will not fulfil the needs of your customers. Therefore, using past data to estimate future demands can help with deciding just how many items should be needed in the future!
2. Digitized back end data entry
Bid farewell to illegible handwriting, missing purchase order, and endless hours of manual data entry. IMS transforms bundles of paperwork into easily manageable digital forms that can be stored securely on the cloud. Purchase order automation will capture POs, and retrieve purchase insights immediately. Reducing manual dependency and human errors in data entry.
Your data from procurement, to POS System’s data (Restaurants), to your accounting system can be sync immediately! Hence, the cost of hiring admins to do such work will also reduce! In fact, a salad chain restaurant actually reduced 57% cost in hiring admins after implementing IMS!
3. Improve stock replenishment process
Having multiple locations? IMS can track inventory levels for each location within your business. When stock levels get low for any outlets, your software can automatically trigger replenishment notification by reminding you to transfer stock between stores or by reordering for new stock. So you’ll replenish in time instead of replenishing them last minute. We all know how replenishing last minute can mean higher food cost for us!
4. Clear visibility of Cost of goods sold (COGS) & gross profit report
For accountants to draft your Profit and loss (P&L) statement might take months to consolidate! However, once your data starts flowing in a systematic way to all processes, you won’t have to waste time transferring data from your purchase history to accounting attributes! In other words, you’ll get to view your P&L instantly!
Moreover, you can also identify which outlets of yours consist of an unusually high amount of COGS, and you can drill down to the problems immediately. And that’s how you unravel your hidden food costs! COGS reports for monthly, weekly and daily can be generated with just a few taps on the screen!
5. Increase Profit Margins
As mentioned above, implementing an inventory management system can reduce admin hiring costs, reduce human errors in data transferring, eliminate waste and save time in the whole process. Besides that, through the data in inventory purchase price history, you’ll be able to identify when is the best time to buy certain ingredients!
Point of Sales system (POS)
1. Front end system
Compared to IMS, POS is a front end system and IMS is for backend operations. Meaning, a POS system directly impacts the customers, such as ordering and paying of their meal; whereas an IMS system is to smoothen out the process of operations happening behind the scenes, such as accounting, inventory, procurement and etc
2. Digitize ordering of food from customers to kitchen
From viewing the menu, ordering your food, to paying for your meal. A point of sales system automates the entire process! Waiters and waitresses are only human. When customers mention their order to them at high speed, they may need to write faster, affecting the readability of their handwriting, causing mistakes in serving wrong items may occur occasionally. So when a POS system digitizes this process, font sizes are also standard, so it's 100% readable!
Furthermore, POS systems will ensure the kitchen gets these orders within seconds after ordering them. So they can prepare the food and serve them as fast as possible! Wouldn’t want your hangry customers to wait too long, right?
3. Automates transaction processes
Moreover, manually calculating your customer’s bill is prone to error. Hence, this is where a POS system can be your right hand man in completing the task. Data from ordering will automatically flow to your billing system and you’ll be able to calculate the price of every bill instantly, and accurately.
4. Tracking of sales data
Digitizing your data with a tracking system to view historical data. Hence, you are able to visualize what sells good, and scale it up, and what is not making the cut, so restaurant owners will have to stop serving, or further improve their items.
5. Inventory management
POS systems are starting to realize the importance of having an inventory management system and there are solutions out there that offer basic inventory management level. However, this function differs from a fully functional inventory management system. How? They count your inventory by products, like how many nasi lemak can be produced, but not down to every clove of garlic. Hence, pilferage can still occur in the workplace, and overtime affects the food costs and profit margins.
When you implement and integrate both systems together, you’ll be able to streamline all your processes smoothly and efficiently, just like the running waters of a river! So to conclude, POS is a front end system, whereas IMS is a backend system. Both together can create endless possibilities for your restaurants!
If you’re wondering where can I find such systems, then maybe you should try Food Market Hub!
We’re a procurement and inventory management system that integrates with POS systems, and your accounting systems too. So you can truly centralize and digitize all operations in one platform. Save time in data entry, unravel hidden food costs and eliminate food wastage just by using our app today!