What is POS Integration? How to Effectively Use it For Your Restaurant

Most restaurateurs can answer the question, “what is a point of sale (POS) system?” because POS systems include some of the most critical components of restaurant operations. Whether small businesses or multi-location, when choosing between POS solutions, restaurateurs consider a long list of features, cost, and usability. However, as cloud-based POS systems and cloud-powered restaurant management platforms become the industry standard, are you also thinking about “what is POS integration?”

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How does POS integration work?

POS integration is a streamlined connection between your POS software and your restaurant accounting and operations platform. With integration, your operations platform can pull detailed data directly from your POS in real time. The integrated platform automatically inputs daily sales and labor accrual data entries into the accounting general ledger (GL).

Integrated point of sales systems data goes beyond the cash drawer summary level offered by simple POS reports. Detailed POS data integrated with your restaurant operations and accounting drives useful insights in sales reporting, menu engineering, recipe costing, labor details, and enhanced business analytics and reporting.

Some platforms may offer adaptable POS customizations, but these can be costly and time-consuming. True POS integration creates complete compatibility, with POS as one part of an entire cloud-based accounting and operations platform.

Why POS integration is a vital part of restaurant accounting software

POS software seamlessly integrated with your accounting platform enables you to centralize key data collection about daily sales and labor. By eliminating manual POS data entry, GL input is streamlined and errors are reduced. Automatically pulling POS data and creating sales and labor journal entries not only ensures accurate data, but it also saves time for your employees, managers, or bookkeeping team.

In addition to the short-term efficiencies, POS integration can inform your business strategy over time through customized reporting and accessibility. When your accounting system pulls detailed data directly from your sales POS system, you can see a real-time representation of your financial situation. Anomalies in your numbers can be immediately addressed through data-driven decisions.

 POS software integration drives data collection that can help you run your business. A fully integrated POS system enables insights within two main categories that can benefit your bottom line: financial and operational reporting.

What POS integration means for financial reporting

1. Daily sales summary

A POS-integrated platform creates transactions within your accounting software, labeling the “Daily Sales Summary” for each day and each restaurant location. A journal entry about revenue, tenders, and discounts is recorded from each sales ticket. This integration maps sales reporting and receipt details from your POS to your GL, creating a detailed road map for transactions. By automating this data transfer, data collection is streamlined and insights are accessible from one centralized dashboard.

1. P&L statement

An integrated POS allows you to automate financial reports, at the frequency and detail you need, to make data-driven decisions about your business. For example, with POS integration, a profit and loss (P&L) statement, one of the most important indicators of restaurant health, can be automatically scheduled to deliver via email. Or, with complete sales reporting, you can customize a recurring comparative analysis by location. Business intelligence, based on real-time POS and operations trends, provides key data that you need to know to improve operations.

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3. Labor data

POS integration allows you to transfer data between systems, tracking time entries and accruing labor expenses in your GL. By automatically keeping track of key metrics, such as labor as a percentage of sales, you are able to optimize labor spending based on business trends. POS integration enables you to make immediate staffing decisions to control labor costs by automatically recording time entry details for different job titles. Real time information about your labor benchmarks ensures you can make informed adjustments daily, instead of weekly or monthly. And with POS and payroll integration, payroll processing is efficiently streamlined, saving you the time and hassle of manually passing information to and from your payroll processor.

How POS integration improves operational reporting

1. Flash report

A restaurant flash report tracks information about several critical labor data points, using integrated POS data to automatically track employee labor data and payroll. With an automated flash report, you can control labor costs through daily insight into your sales, labor as a percentage of sales, labor goals, and comps and discounts. Flash reports can be automated through your restaurant accounting software and POS integration solution.

2. Recipe Costing

Recording recipe costs can help you track usage, yield, and waste, maximizing recipe efficiency. The sheer amount of data needed to track recipes and food costs can be very time consuming to input manually, so many restaurateurs underutilize this key operational report. But with an integrated POS system, you can automatically calculate food cost and profit for specific menu items within the integrated system. Mapping your recipes to POS menu items allows you to obtain an accurate measure of food cost efficiency, through insights like tracking your actual versus theoretical food cost variance.

3. Menu engineering

Menu engineering maximizes your bottom line by enabling smart decisions about promoting the most profitable menu items. Ensure you are making informed decisions about popularity versus profitability by instantly integrating data about how much you’ve sold compared to item margin. Menu engineering data is driven by POS integration, with both sales mix polling and recipe costing coming from POS data. Use menu engineering data to determine whether specific menu items are over- or under-priced, when to revise recipe portions or ingredients, or whether to seize a new opportunity to promote a menu item that is high margin but low sales.

4. Smart scheduling

POS integration can ensure your labor is running as efficiently as the rest of your restaurant. Historical POS data, automatically pulled through integration, can inform sales forecast numbers, allowing you to create smart employee schedules that optimize labor spend. In addition, with a daily payroll accrual, you are able to compare scheduled labor to actual numbers. With auto-created labor accrual journal entries created from the POS import each day of the pay period, you see true labor costs and the impact on your P&L. With POS integration, you can quickly spot any labor issues and address them in real time, rather than waiting until the end of the month.

Scheduling - reduce labor costs

5. Smart operations

Finally, with POS integration, you have all your financial intelligence at your fingertips to run your business smarter or more profitably. Use that information for sales and labor forecasting, as well as budgeting, and even ordering based on historical sales data.

Conclusion

Point-of-sale system integration with your restaurant accounting and operations platform can transform your POS from just a cash register to an integral part of smart, data-driven restaurant operation strategy. Knowing what POS integration is and the key benefits of integration empowers owners, employees, and managers to start automating essential pieces of running a healthy, profitable restaurant.

If you are interested in POS integration to streamline your operations, without costly customizations or multiple systems, consider a comprehensive, restaurant-specific management solution. Restaurant365 is a cloud-based, back-office solution that incorporates accounting and operations into an all-in-one platform that is fully integrated with your POS system, food and beverage vendors, payroll vendor and bank. For more information, schedule a free demo today.