Getting the Most out of Your POS System

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Getting the Most out of Your POS System 2017 Craft Beer Attorney Webinar

Getting the Most out of Your POS System 2017 Craft Beer Attorney Webinar

Welcome • Every brewery who sells their own beer needs to be able to

Welcome • Every brewery who sells their own beer needs to be able to charge for it • The taproom is a separate business and needs to have special accounting • The Point of Sale system can track all the activity if setup correctly • Your system needs will grow as the company grows and matures ØYour Taproom is a separate business operating unit with a lot of moving pieces.

Agenda • How to structure your Point of Sale system – Simple versus Complex

Agenda • How to structure your Point of Sale system – Simple versus Complex • Inventory – Do you keep track of it, yes or no? • Best ways to review merchant services • Using your Point of Sale to interact with your Accounting Software

Mary Brettmann, CPA Beverage Business Builders • I always wanted to be a CFO

Mary Brettmann, CPA Beverage Business Builders • I always wanted to be a CFO • Varied career track to get exposure to all aspects of finance • Willing to step out of my comfort zone • Surly Brewing CFO 2012 2014 • Built the entire administration platform for the destination brewery • Was the CFO, Director of IT, HR and Controller prior to the buildout • Beverage Business Builders 2015 2017 • Nationwide accounting and administration practice for craft breweries • 30% of my client base won a 2016 world beer cup award • Treasurer Pink Boots Society

Surly Destination Brewery Credit: Surly Brewing Company

Surly Destination Brewery Credit: Surly Brewing Company

The Business of the Taproom How do we track the activity in the taproom?

The Business of the Taproom How do we track the activity in the taproom?

The Taproom is a Stand Alone Business There are many data streams in a

The Taproom is a Stand Alone Business There are many data streams in a taproom Ø Sell beer Ø Pay employees Ø Tip employees Ø Handle and sell merch via the web and at the taproom Ø Merchant Services! Ø And my favorite, music streaming service “At $900/bbl revenue, it should be a large profit center for the brewery. ”

Each Activity Must Be Quantified To Be Able To Track Are your revenue and

Each Activity Must Be Quantified To Be Able To Track Are your revenue and expenses easily found on the income statement? Can you point to the taproom gross margin? “Taproom Gross Margin is a very important benchmark to track”

Sample Taproom Gross Margin Tap Room Sales Merchandise Sales 2, 000 Off Site Sales

Sample Taproom Gross Margin Tap Room Sales Merchandise Sales 2, 000 Off Site Sales 8, 000 On Site Sales 60, 000 Private Events 3, 000 Snacks & Food Sales 1, 500 z. Discounts Given (3, 000) Total Tap Room Sales 71, 500 Equipment Rental 150 Merchandise COGS 4, 000 Merchant Fees COGS 3, 500 Off Site Beer COGS 1, 000 On Site Beer COGS 3, 200 Private Events COGS 1, 400 Snacks & Food COGS 1, 400 Total Tap Room Payroll 5, 000 Tap Room Software 600 Tap Room Supplies 500 Total Tap Room Cost of Goods Sold Gross Profit 100% 20, 750 29% 50, 750 71%

The Point of Sale System is the Nerve Center Breweries have an operational heartbeat

The Point of Sale System is the Nerve Center Breweries have an operational heartbeat and an accounting heartbeat ü The physical world must match the virtual world ü EVERY transaction must be reflected in the point of sale system. ü Point of Sale systems range from very simple to very complex üYour POS system will change as your needs change ü Beware of Goldilocks syndrome “Make sure that you can hear both at the same time”

Point of Sale Lifecycle The nerve center of the taproom

Point of Sale Lifecycle The nerve center of the taproom

Point of Sale Lifecycle • Pre startup “Square is free and fine with me”

Point of Sale Lifecycle • Pre startup “Square is free and fine with me” • The initial search for a POS system • There a “million” different POS systems • Don’t be swayed by free or very complex • You usually get what you pay for • That might not be too bad if you are not focused on the details • First Year “I’m starting to notice loss and my system doesn’t track it” • Just hoping to get all of the cash accounted for in a timely manner • At first, I’m just happy to be able to reconcile the bank statement • Then you start to notice timing differences (credit card deposits) • Then the lack of detail starts to bug you

Accounting Systems Lifecycle Cont. • Year Two “We need to be more efficient. ”

Accounting Systems Lifecycle Cont. • Year Two “We need to be more efficient. ” • You are a bit more established and start to ask more questions • How do we import our point of sale data? • Why is cash so tight? • Where is my inventory? • Expansion “We need a better system” • That simple Square system doesn’t cut it any more • Perpetual Inventory is a must • Leakage starts to be a bigger and bigger deal

Point of Sale Systems Lifecycle Cont. • Big Boy Systems • Legacy vs web

Point of Sale Systems Lifecycle Cont. • Big Boy Systems • Legacy vs web based • Make sure that you can ring up sales when the internet is down • What are the customer service hours? • Inventory is managed by the POS system • How is it paid for? • Time keeping is sometimes managed here • What do you do with the cellar man by day and beer tender at night? • Can handle table service • Kitchen? • Reservations?

Point of Sale Accounting There are several touch points

Point of Sale Accounting There are several touch points

Ways to Get the Systems to Communicate • Barebones necessary to reconcile the bank

Ways to Get the Systems to Communicate • Barebones necessary to reconcile the bank account • Monthly activity in one large journal entry Can be done more frequently when information needs change • PMIX reports • It is the only way to decrement inventory • Automated computer synch • • Does it bring over a summary report? How is cash handled? Tip reporting Be careful with House Accounts

Tracking Sales • Your COA should include each line of business • Sales tax

Tracking Sales • Your COA should include each line of business • Sales tax liability is not part of sales • Every sales account should have an associated COGS account • Look at your discounts. Do they tell you a story? • POS buttons can be added and changed to reflect different discounts • Employee and promo beer should be separated

Tracking Sales Tax • SALES TAX COLLECTED IS NEVER YOUR MONEY • It should

Tracking Sales Tax • SALES TAX COLLECTED IS NEVER YOUR MONEY • It should never be added to sales, but rather a current liability • Pay it on time • Pay what the state says to pay • Choose only one master (usually the POS system) • Don’t Forget Use Tax • Beer given away in the taproom is subject to use tax • Merch grabbed by salespeople is also subject to use tax

Tracking Inventory • The more that you track, the more that you will know

Tracking Inventory • The more that you track, the more that you will know • The physical world must match the virtual world • Commit to accurate inventory • Set up procedures to track and count inventory • You must live by your procedures • Inventory can live in the POS system or the accounting system • Watch the flow of dollars and goods.

Month end Close Process • All sales and cash need to be accounted for

Month end Close Process • All sales and cash need to be accounted for in the accounting system. • Inventory and cash must be counted and reconciled • Double check your liabilities with the POS system • Gift card • Sales tax • Growler deposits • Consider a 4 4 5 close calendar

Special Items to Consider • Gift certificates/cards • Merchant Services • Start with a

Special Items to Consider • Gift certificates/cards • Merchant Services • Start with a flat rate • Then find savings with a graduated rate • Interchange pricing • Growler deposits • Tips • pooling vs payout • Paid via cash or via paycheck. Must be reported on W 2

How to Get Started üDecide on what you can realistically track ü System capability

How to Get Started üDecide on what you can realistically track ü System capability ü Time required to setup process üMake a goal to advance some part of the accounting each quarter üListen to that small voice that tells you to pay better attention üEnhance your process as you have time and money “Make a road map and commit to one change per quarter”

How Can I Learn More? All of my reference tools are located in one

How Can I Learn More? All of my reference tools are located in one place. Mary’s Talks Glossary Rules for Success CFO Toolkit www. Beverage. Business. Builders. com/Reference

Questions/Frustrations? War stories?

Questions/Frustrations? War stories?

Thank You! Mary Brettmann mary@bevbizbuilders. com 714 878 8216

Thank You! Mary Brettmann mary@bevbizbuilders. com 714 878 8216