Why Restaurant Inventory Software and POS Systems Aren't Competitors

Why Restaurant Inventory Software and POS Systems Aren't Competitors
Restaurant Inventory - March 05, 2024 Written By: Krista Dinsmore

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Technology, technology, technology. Finding the right balance between investing in too much technology and not enough is a perpetual challenge that restaurant owners manage within their businesses. 

Invest too heavily in technology and you risk drowning in a sea of complexities and wasted money, invest too little and your business could be missing out on some key efficiencies that keep you competitive. 

One key area where technology is critical in a restaurant is inventory management. The constant balancing act of keeping enough ingredients to fill orders, without so much that you’re generating waste and losing money, is far from easy. 

Inventory management systems are key here, helping your business to:

  • Prevent overstocking and stockouts
  • Save money through efficient stock rotation and reduced waste
  • Enhance your internal efficiencies 
  • Make better decisions through data
  • Improve accuracy in your inventory financial reporting
  • Optimize supplier relationships to enhance your negotiations
  • Prevent theft and product loss
  • Enhance customer satisfaction by ensuring the availability of menu items

Yet many restaurant owners are failing to get these benefits. This is either because they are tracking their inventory with pen and paper and manual spreadsheets, or they are using their point-of-sale (POS) system in place of restaurant inventory software. 

In fact, when looking to upgrade and improve their inventory management processes, many restaurant managers ask the question “Should I invest in a POS system or restaurant inventory software?”

In this blog, we’re here to answer why these two very different pieces of technology are not competitors. 

POS Systems and Restaurant Inventory Software Have Two Distinct Purposes

What is Restaurant Inventory Software?

Restaurant inventory software is a specialized technology tailored to meet the unique demands of managing and optimizing stock levels in your restaurant. Restaurant inventory software continuously tracks and monitors the availability of ingredients and supplies - using real-time and historical data to predict future demand, prevent overstocking and reduce waste. 

Data from restaurant inventory software helps to identify hidden costs and areas of inefficiency within your company's inventory management process.

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What is a POS System?

POS software is a sophisticated digital solution crafted to streamline and automate the transactional aspects of your business. At its core, POS software efficiently manages the entire order lifecycle, seamlessly transitioning from capturing customer orders to transmitting precise instructions to the kitchen. Beyond order processing, POS software plays a pivotal role in facilitating secure and efficient payment transactions.

In addition, your POS system provides real-time insights into sales performance, empowering businesses with the ability to analyze trends and make informed, data-driven decisions.

The Limitations of POS Systems When it Comes to Inventory Management

While POS systems stand as indispensable tools for managing transactions and enhancing the overall customer experience, it's crucial to acknowledge their limitations when tasked with comprehensive inventory management.

Transactional Focus: POS systems prioritize order processing and payment transactions, lacking the nuanced capabilities required for comprehensive inventory control.

Limited Inventory Tracking: While offering basic inventory tracking features, POS systems fall short in providing the advanced functionalities that are available in dedicated inventory management solutions.

Real-Time Vs Historical Reporting: The real-time nature of POS systems - while beneficial for immediate transaction data - limits their ability to provide comprehensive historical reporting. This hinders your business from gaining insights into long-term consumption patterns, supplier trends, and seasonal fluctuations.

The Integration of Restaurant Inventory Software and POS Systems is Critical to Optimal Performance

To unlock the full potential of both inventory management and POS systems, integration is key. By fine-tuning the functionalities of these systems to cater specifically to the unique needs of your restaurant, your business can automate complex backend processes. 

This includes identifying hidden costs, pinpointing areas of waste, and enhancing overall profitability.

Imagine a scenario where the inventory management system signals the kitchen staff when stock levels of a particular ingredient are running low. Simultaneously, the POS system analyzes sales data to determine which menu items are the most popular. This synchronized integration between the two systems allows for timely restocking, preventing service disruptions, and helps restaurant managers make informed decisions about menu optimization.

Not sure where to start on your journey to successful inventory management? Download the Sculpture Hospitality Buyer’s Guide to food and beverage inventory systems below, or contact our team of experts today

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A Complete Buyer's Guide to Food & Beverage Inventory Management Systems

With around 25 to 35 percent of a restaurant’s operating budget dedicated to purchasing food (that’s not even taking into account beverage inventory costs for the bar), proper inventory management can significantly improve expected revenue.

To maximize profits you need to improve visibility and control over your restaurant or bar’s inventory. 

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