QUESTION:
How can I make sure that my POS system generates an accurate daily net sales report?
ANSWER:
We frequently come across discrepancies between tax filing records and POS reports while gathering details for an audit. Does this matter, and should you care?
Yes, you should care. The daily net sales calculations generated from your POS system should accurately reflect your restaurant’s operational activity for that day. Therefore, from open to close, all transactions entered into the POS during the day should be scrutinized and any errors or adjustments identified before the final close-out at the end of the workday.
Since the POS results are captured electronically, any possibility of corrupted files or unauthorized manipulation should be considered, and procedures should be in place to monitor and curtail such activity. Since your POS system is the source of original documentation that’s frequently requested in an IRS audit—as well as for a restaurant sale, banking analysis or any outside request for verification of net sales—it’s paramount to preserve the integrity of this data. You need to always be able to rely on it and know that the data hasn’t been altered in any way.
If discrepancies emerge due to accidental or intentional corruption of your POS data, countless hours may be consumed as you try to figure out what happened. If this happens during an audit or when a potential buyer is analyzing your financial statements, it can tarnish your credibility. In addition, since most ratios used in analyzing your business operations involve a percentage of net sales, the figure is imperative to ensure accuracy in many areas of your business.
What should you do to ensure that you’re always working with accurate data? Here are three suggestions:
1. Back up your data. Be diligent in backing up this important POS data on a regular basis so you’ll have an extra copy if something goes wrong with your POS system or if data somehow gets altered at a later date.
2. Control access to the data. Limit the ability of individuals—whether they’re owners or managers—to alter transactions after the daily close sequence has occurred. Follow this procedure consistently—it will save time and protect everyone’s credibility in the long run.
3. Generate monthly statements. Create a system that exports data electronically from your POS system so that you can access it at a later date. Use this data to create monthly financial statements and memorialize your operational statistics.
In short, this data is vital to evaluating your pizzeria’s profitability and net worth, and it also helps keep you out of trouble with the IRS. Don’t wait until tax time to determine if your POS system generates accurate results—that’s a recipe for trouble!
