Sixty-six percent of those responding to a recent quarterly survey are using a (POS) Point of Sale system. This means that there are about 1,845 private clubs that belong to CMAA that have invested a lot of money in a computer driven ordering and accounting systems. Figure an average cost of $20,000 per system and you have approximately $37 million invested worldwide. That’s what we call a "lot of bucks!"

Are we getting the maximum "bang for our bucks?" Not according to the response to the second part of our survey. Only 19% of those systems currently operating are being utilized for their inventory and cost controls capabilities. How are they being used? According to our calls to those in the field, most executives are doing the obvious . . . . using them for ordering between the dining room and the kitchen. Also, they are being utilized for their direct billing and accounting capabilities. If the membership accepts a summary statement, rather than duplicate dining room invoices in their monthly bill, posting and duplication of work are virtually eliminated . . . . everything goes direct from the checker or wait station to the member’s bill. All other accounting procedures such as posting of sales, etc. are automatic.

Although only 19% of the clubs are utilizing the POS for inventory and cost control systems, those that are using them usually apply them to the bar operation first. They have found that it is much simpler to install and control, albeit there is no question but what there are hundreds of formulas that apply in the normal bar. Never-the- less, executives seem to be able to accept the "averaging out of portions" much quicker when it comes to the bar, than when applied to complicated food recipes.

Without a doubt, being able to perform these two primary functions warrants the cash outlay. However, maximum utilization for inventory and internal cost controls would more than pay for the time and trouble of incorporating the existing software available on most systems. Why haven’t more executives done this? According to our many phone calls, the following factors apply.

r Inertia has to be a factor. The initial reason for buying the system has been accomplished, which makes it much easier to "put off the frills." Frills that can easily be transformed into big dollar savings, via exacting controls that give you reports on portions and wastage.

r The initial establishment of a perpetual inventory and food cost control system can appear almost insurmountable. You have to have exacting recipes and portion controls for the major items on your menus. To illustrate; a boneless strip loin accepted in the back door needs to have specific wastage and portions established. An example would be: wastage of 30% for the initial preparation, regardless of the final utilization. Then you need to establish final usage portions, such as 12 oz strip, 10 oz strip, roast strip on the Sunday buffet averages 6 oz of raw product, beef stroganoff 10 oz, etc.,. etc. Still and all, once such portions and recipes are established, it is a simple matter of maintenance. Each time the POS registers the sale of any one of the items, the recipes and portions will automatically reduce the proper amount from your perpetual inventory. Obviously, you have to feed in all products received in the storeroom, but again it can be a simplified process. Milk, produce, flour, and other minor products will not fall into the system, per se,. Rather, a percentage will be applied per entree served. After a couple of months they will establish reliable patterns.

r Once established, many executive do not believe it is a simple matter to maintain the cost control formulas and the changing recipes. However, consultation with accounting firms indicates that it can easily be maintained if the original program is properly established.

r Unfortunately many executives simply don’t understand how to apply computer software to the problem . . . most know all about controls, but have problems in the translation to "computereze." It should be simple to make the person who sold you the unit to apply the appropriate software, but they too have a learning problem . . . . . they know all about computers yet can’t translated it into the necessary cost control tools. The solution lies in combining the two areas of expertise. We checked with Kevin Reilly, JP, CPA, in the Washington, DC office of Pannel, Kerr, Forster Management Group and they (and other hospitality accounting firms) have accountants well versed in the intricacies of inventories and cost controls, and also have the computer expertise to mesh the two fields.

In summary, Point of Sale systems are proving to be more and more adaptable to the private club field, i.e., they are becoming sophisticated enough to deal with the complicated menus found in private clubs. Although cash outlays can be justified for systems utilized only for ordering and direct billing/posting, the smart executive engages the proper firm to also establish a perpetual inventory and cost control system.