More industries are becoming highly data-driven and the restaurant industry is no exception. Big data may seem like a tech-savvy buzzword, but it's a hot topic of conversation for a good reason.
Everything nowadays is trackable. For example, it's possible to track when restaurant employees clock in for their shift or which menu item performs the best. Are there other ways restaurants can use reports to succeed?
Below is more information about restaurant reporting and a list of the best reporting practices restaurants should consider following.
Overview: Reporting in the Restaurant Industry
There's no denying that manual restaurant reporting can be time-consuming. Restaurant owners or managers would rather spend time on other meaningful tasks, such as recruiting and hiring, training chefs, or updating daily specials on the menu. However, new technologies have made restaurant reporting much easier.
For example, basic point of sale (POS) systems or integrated restaurant management systems are useful digital tools that enable data reporting. Reporting is an essential part of business operations because it helps visualize the restaurant's financial health.
It also provides managers or owners a way to justify any decisions regarding staffing, menu development, or customer service operations. The ultimate goal of reporting is to cut costs, increase profitability, and remain competitive.
Six Reporting Best Practices Restaurants Should Use
Aside from gathering reports from a POS system, some restaurants will leverage other types of software that are beneficial to improving the restaurant’s performance.
While it's common for retailers to leverage an enterprise resource planning (ERP) system, it could also benefit restaurants. ERP systems streamline and automate inventory management, provide real-time low-stock notifications, allow users to download critical data, and improve overall visibility into the business.
Continue reading to learn some of the best reporting practices restaurant owners or managers should consider following.
1. Decide the "When" and "What" of Reporting
One helpful reporting practice is determining how often to pull reports and which data reports are most valuable. For example, labor, sales, inventory, and customer relationship management (CRM) reports are some of the reports restaurants should consider pulling together.
Some reports should be pulled monthly, quarterly, or annually, depending on the type of restaurant and what insights are needed at the time. Making a detailed schedule of when associates should download certain reports can keep them organized and help incorporate reporting into their work routines.
2. Research and Select the Best Reporting Solutions Available
Some POS systems are all-in-one solutions that handle all necessary business aspects. Other restaurant software is specifically designed for one purpose, whether it applies to human resources (HR), payroll, accounting, loyalty programs, or employee training.
Restaurants should consider what reports they can pull from a potential POS system and research other software prices and features. Thankfully, there are many online resources and forums that owners or managers can use to determine which reporting solutions are best suited for their restaurant.
3. Use Reports for CoGS and P&L
To stay profitable, restaurants must determine their cost of goods sold (CoGS). A profit and loss (P&L) statement will help managers or owners see exactly where their restaurant is making or losing money. CoGS and P&L documents are essential for any restaurant or business.
Product mix and menu reports can be especially useful for determining CoGS and P&L figures. These reports show users:
- Menu sales and how they affect overall profits
- Top menu groups, items, and modifiers
- How the menu is performing based on time and day of the week/weekend
Owners and managers can justify adding or dropping menu items after referring to CoGS and P&L reports. If a menu item is not generating a profit, it may be time to remove it from the menu.
4. Leverage Reports to Improve Customer Experience
A restaurant cannot be successful if it does not offer a positive customer experience (CX). If a POS system has a CRM feature, it can provide management with customer contact information, feedback, order history, and other data to help them understand customer behavior.
Leveraging a CRM report helps managers or owners learn more about the people they serve. For example, restaurants can send customers personalized marketing messages to keep them engaged and encourage them to dine again. CX is everything, so gaining customer insights through reporting is well worthwhile.
5. Examine Reports to Reduce Empty Tables
Keeping tables occupied is crucial for restaurants.
Data from reports can help restaurant managers understand off-peak times or no-show rates for reservations. Then, a manager or owner can implement a reservation deposit policy or discounted menu items if guests order during off-peak hours.
6. Assess Employee Performance With Labor Reports
The COVID-19 pandemic has caused the restaurant industry to experience massive labor shortages. It's common to see restaurants with "Help Wanted" signs plastered on their windows.
Analytical reports, such as a labor report, can show managers or owners how many team members they need to work during specific times of the day. Additionally, they help managers or owners determine whether they need to hire more or less staff to accommodate business needs.
Restaurant owners can improve their business and potentially increase profitability by using the latest digital technologies for reporting purposes. While having easy access to large amounts of data can be overwhelming, restaurants should understand the importance of reporting and how reports are assets that can guide better decision-making.