Learn More About Restaurant POS Systems
What are Restaurant POS Systems?
Restaurant POS systems are crucial to keeping a restaurant running smoothly. As anyone who has worked in a restaurant knows, there are a lot of moving parts in both the front and the back of the house. Day-to-day operations are complicated and can involve everything from inventory management and purchasing, to employee management and scheduling reservations for guests. While restaurant management software is intended to be more of an end-to-end solution, restaurant point of sale software can also contain many of the same features. One of the main advantages of restaurant POS systems is the ability to integrate with important software such as accounting tools, online ordering platforms, customer management software, and much more. The inclusion of a cash drawer, barcode reader, and an android and iPad stand to be used either at the counter or tableside is an added advantage.
What Does Restaurant POS Stand For?
Restaurant POS stands for Restaurant Point Of Sale. It is a place in the restaurant where an order is taken from the customer, or a transaction is completed against an order placed. Restaurant POS software has a front end and a back end. The front end is where the transaction is processed at the point of sale. The back end gives access to the analytics, sales figures, inventory tracking, and other relevant information to be used by the management.
What Types of Restaurant POS Systems Exist?
There are mainly two types of restaurant POS systems currently in use; traditional POS systems and cloud-based POS systems. While most of the technological operations were earlier performed by traditional POS systems, more and more businesses are moving towards cloud-based systems for their restaurants.
Traditional POS system
Traditional POS systems, also known as on-premises or legacy POS systems, consisted of desktop computers and other pieces of hardware which were linked to the internet by a remote server set separately inside restaurant locations. These systems are traditional in a way that they need to be updated manually and most of their security and data storage takes place inside restaurant premises. Once an order is placed manually and an invoice is generated through a printer, the service staff has to then coordinate with the kitchen staff to fulfill the ticket.
Cloud-based POS system
Cloud-based restaurant POS or mobile POS (android/iOS) systems are all-in-one POS systems that provide enormous advantages over traditional POS systems. These user-friendly POS systems are hosted on the cloud, hence all the data entered is saved on a real-time basis. This software can be easily installed on a smartphone or an iPad and placed at the counter or tableside. Cloud-based functionality allows a convenient and efficient path of communication by automating tasks at each station; from placing a contactless order and fulfilling a ticket, to processing a payment and scheduling an update. This software also provides 24-7 customer support for any technical issue.
What are Common Features of Restaurant POS Systems?
There are several features a restaurant POS software provides. The following are some core features that can help users in multiple ways:
Online ordering: Customers love ordering food online, so it makes sense to get in on the action. A POS system with functionality to create an online ordering integrated with a third-party delivery service portal helps keep everything in one place as well as save time and money when trying to figure out how to build a website and avoid vendor fees. Also, with those orders coming directly through the POS tool, orders are less likely to be lost or pushed aside in favor of in-house diners.
Tableside ordering: Since it's important to reduce the use of paper these days, POS systems help users go paperless. POS systems with mobile capabilities allow servers to place orders directly into the system using a tablet or mobile phone. Not only does this reduce mistakes, but it also increases efficiency as orders are sent to the kitchen immediately. There is also the possibility for order kiosks, allowing customers to place their orders directly into the POS system and bypassing servers entirely. This is ideal for restaurants where customers order at the counter, freeing up cashiers to help prepare orders faster.
Inventory management: Linking back-of-house and front-of-house functions are crucial, and many restaurant POS systems include inventory management features that allow users to be on top of sourcing and purchasing. In many tools, this is automated such that every item ordered is automatically removed from the restaurant’s inventory. With accurate reporting of what’s available, users will be able to save more money ordering only what is necessary while reducing waste.
Menu building: Building a menu can be a complex endeavor, but restaurant POS systems allow users to see their inventory and build an appropriate menu. With the menu already in the POS system, servers can easily place orders, especially if that menu is intuitively organized specifically for the restaurant’s workflow.
Seating plans: The advantage of a POS system is that users can dynamically seat customers as tables become available. With the ability to track reservations and know which tables are reserved at the beginning of service, it becomes much easier to seat walk-in customers. The system may also allow users to see how close a table is to finishing, helping them avoid giving inaccurate wait times and potentially losing customers.
Quality reports: Various reports help users run their businesses more intelligently because they provide key insights into what they are doing well and what they may need to work on. Perhaps a certain menu item is ordered much less often than others. It may be time to rework it or remove it from the menu. Reports can also help with labor costs by determining which shifts have the most business and therefore need the most servers. Reports provide a large-scale view of the business and are therefore extremely helpful for creating a plan.
Loyalty programs: Marketing is important for every small business, especially when there aren’t a lot of extra funds lying around to pay for it. Loyalty programs, therefore, are an easy way to help ensure repeat business. Using a POS tool with a built-in loyalty program, users can create gift cards, punch cards, or any other loyalty programs quickly and easily to ensure customers keep coming back and spending more.
Hardware: Many POS systems come with hardware options such as cash drawers, tablets, card readers, and receipt printers. Hardware can be expensive, so any hardware must work well with the software purchased. It’s also important that the hardware is reliable and durable since it will ideally be getting a lot of use. Because hardware can be a significant expense, users may be reluctant to buy more than the bare minimum, but their restaurant will work more efficiently if they purchase enough hardware so employees aren’t doubling up.
Accounting: Keeping track of how much money is coming in and how it is being used is crucial to any business. Accounting features within a POS system make it easy to monitor every transaction, track purchasing, and keep an eye on general overhead spending. The more organized a business’s finances are, the easier it is to focus on the day-to-day restaurant operations.
What are the Benefits of Restaurant POS Systems?
Running a successful restaurant business needs a thorough understanding of the brand image, customers’ needs, and its service offerings. POS systems come with multiple benefits that can keep track of these metrics and help businesses stay ahead of the competition.
Benefits for owners: With a restaurant POS software in place, owners can monitor sales, check inventory usages, and track staff behavior without a physical presence on the site. Also, it helps in contributing to the restaurant’s marketing efforts with specific features like loyalty programs, gift cards, customer rewards, messaging tools, targeted promotions, and more. It helps in identifying and addressing all those issues that may affect the bottom line and formulating a strategy to tackle them.
Benefits for staff: POS software helps in taking orders, communicating those orders to the kitchen, and providing quick service to the customers. It helps chefs potentially build menus and indicate which menu items are no longer available as service progresses. The advantage is that servers can create, split, or refund checks quickly and easily. It also includes time clock functionality, with staff signing in and out as per their schedules on a POS terminal. As a whole, it ensures stronger financial security and streamlined time management.
Benefits for customers: The results of all the actions that a POS software takes care of lead to an increase in customer satisfaction, retention, footfall at the restaurant. Reduction in waiting time, self-ordering options, execution of correct orders, electronic bills, contactless payment processes, offers, and discounts are some of the benefits a customer gets with the joint effort of POS software and restaurants.
Who Uses Restaurant POS Systems?
Servers: Restaurant POS software is primarily used by restaurant servers and cashiers to place orders and process payments.
Managers: With additional features such as accounting or restaurant reservations, restaurant managers and owners can keep an eye on their business.
Customers: Customers may even be able to place their orders using an iPad POS system mounted at the table or POS terminals around the restaurant.
Kitchen staff: POS systems also affect the kitchen, as many POS systems either include or interface with a ticketing system to help keep orders organized and provide quick service to the customers.
What are the Alternatives to Restaurant POS Systems?
Alternatives that can replace this type of software, either partially or completely:
Restaurant management software: Restaurant management software contains POS features among other additional features to run the restaurant. These are end-to-end solutions that keep track of inventory, payroll, orders, and analytics. Restaurant management software serves the purpose of keeping track of the behind-the-scenes processes in a restaurant rather than just taking care of customer-facing tasks.
Software Related to Restaurant POS Systems
Related solutions that can be used together with this software include:
Restaurant scheduling software: Restaurant scheduling software helps organize the workforce schedule of a restaurant. It helps in creating calendars and tracking the present status of employees working in the restaurant. During last-minute shift changes, this scheduling software helps organize shifts and inform staff via texts. Scheduling software can easily be integrated with POS systems or restaurant management software to avail a pool of features.
Restaurant inventory management & purchasing software: This software helps restaurant businesses manage their food inventory which in return helps control trivial costs caused by food waste. It maintains inventory information, keeps details of suppliers, and digitizes invoices and receipts for easier bookkeeping. It also balances the incoming revenue to the cost of raw materials purchased. Additionally, restaurant inventory management software can be integrated into restaurant POS systems.
Challenges with Restaurant POS Systems
POS software comes with its own set of challenges. It could be during the implementation or operation phases. However, these challenges can be monitored and overcome by following the necessary steps.
System upgrades: POS software might require frequent updates. Transitioning to new versions from an old version not only demands time and expertise but also creates confusion in the mind of the users. Users might receive system updates in the middle of the restaurant hours which could slow down processes on POS. While these updates are necessary for smooth functioning, one needs to make sure to schedule these updates during a time that wouldn’t interfere with the restaurant hours.
Internet connectivity: Many POS systems need an internet connection. If the internet suddenly goes off, it might create issues in accepting orders, processing orders, and accepting payment, and so on. A consistent internet connection is essential for uninterrupted operation. There are also some advanced POS software that do not require an internet connection. It is always better to have something that can operate both in online and offline mode.
Fraud/security issue: Restaurant POS allows multiple payment methods for customers. With the increasing use of payments via debit/credit card, there exists a risk of online fraud. Hence, it is mandatory to have EMV-compliant POS systems and PCI-compliant payment gateways to ensure the security of transactions. Buyers must make sure that the software of the vendor qualifies for all the necessary criteria before implementing it into the restaurant.
Which Companies Should Buy Restaurant POS Systems?
Food service providers: This POS software is not only limited to restaurants but also other food service providers like fast food centers, coffee houses, food trucks and food carts, cloud kitchens, bakeries and sweet shops, pubs and bars, ice cream parlors, etc. All food service providers interested in automating their daily simple tasks like online ordering, changing orders, and releasing refunds, payment processing, inventory control, and more, can implement this software in their businesses.
How to Buy Restaurant POS Systems
Requirements Gathering (RFI/RFP) for Restaurant POS Systems
Finding the best restaurant POS software for the business is highly essential. There exists a variety of POS software for every type of restaurant. Small size restaurants, whether fixed or mobile, operating on a single location would require a very basic kind of software that would serve specific needs. Similarly, mid-sized restaurants that are on the growth track would require software that would cater to their high volume orders and provide necessary features like inventory control, online ordering, reports, and analytics, and others. Large-sized restaurants operating in multiple locations should seek POS software with lucrative features with access to multiple location management.
Buyers must do thorough research and ask vendors for all necessary information through a quotation or RFI/RFPs before purchasing any kind of software. The solution should address their business needs, hence once a quotation or RFI/RFP is received, a comparative analysis of the features offered by the vendor should be mapped against the problems that the software will be going to solve. Buyers also need to carefully examine the price offerings of the vendor. Since most of the POS software comes under a subscription package or a monthly fee instead of a one-time payment, buyers need to consider all essential attributes before making a purchase. A clear path of communication needs to be established between the buyer and vendor for a successful business agreement.
Compare POS Software Products
Create a long list
A long list can be created to select some vendors whose offerings are exactly aligned with the needs of the buyer. It eliminates software that don’t support critical functionalities. For example, a POS software that doesn’t support analytics and reports for a mid-size or a large-size restaurant business doesn’t qualify to be on the long list because it lacks such functionality that is non-negotiable. Hence it is recommended to examine and select the vendors by their product/service offerings, reviews and ratings it has received from other buyers, and the overall reputation it has in the category.
Create a short list
A short list is prepared by bringing down the number of less relevant vendors from the long list. This should be done by understanding the business requirements deeply and mapping them against software features, keeping in mind the cost associated with each of them. In cases where vendors don't respond to the RFIs, they are eliminated directly. For example, out of 10 vendors selected for the long list, buyers must make an effort to bring it to five specific vendors for the short list that would meet their business requirements at the spot with a desirable price offering. Users must not ignore the most important functionalities required while making final purchase decisions.
Conduct demos
It is essential to conduct software demos before selecting a final vendor. It ensures software compatibility and avoids unnecessary last-minute confusion. Buyers, with the help of internal IT departments or outsourced IT experts, can initiate the demo process. In most cases, vendors provide all the necessary support for a successful demo test.
Selection of Restaurant POS Systems
Choose a selection team
There is less scope of having a proper selection team in small and mid-size restaurants, hence they stay dependent on outsourced IT experts for all IT requirements. In most cases, it becomes the owner’s task to evaluate the right software for the business. Large size restaurants that are part of big hotel chains usually have management in place and have separate IT departments like any other organization. In such systems, it's easy to form a selection team consisting of employees who will use the software, an executive that handles the budget, IT personnel who evaluate technical specifications, and management who takes care of the overall process.
Negotiation
Negotiation of the right kind of POS system depends on the prices offered by the vendor to arrive at a final price. It generally happens between two selected vendors out of which one wins the deal. Final negotiation must be done by considering attributes like the quality of service and support, add-on features offered, and price ranges that suit the package.
Final decision
The final decision should be based on the analysis of all the information gathered from the vendor and looking at the right product fit in the business.
What Do Restaurant POS Systems Cost?
The cost of a POS system for restaurants may vary depending on the features it offers or functionalities it supports. It typically costs between $40-$150 per month as subscription charges per terminal. The cost of hardware integrations like tablets, cash drawers, printers, and others could go up to $1000 for one-time payment charges
Cloud-based POS software is typically charged on a subscription pricing structure per month basis. Many vendors offer discounts if the software is subscribed annually or may charge a premium for the addition of extra features. Traditional POS systems or on-premise POS systems may cost a hefty amount of money as these don't include subscription packages and are generally used for more than one terminal with restaurant businesses operating in multiple locations under one brand.
Implementation of Restaurant POS Systems
How are Restaurant POS Systems Implemented?
Restaurants can implement a POS system either at the start of their business or they can switch from one vendor to another. The POS system helps replace the traditional register method of documenting orders, checking inventory, and calculating revenue. Once a vendor is finalized for onboarding, a designated team from the vendor and buyer comes together and initiates the implementation process.
Who is Responsible for Restaurant POS Systems Implementation?
Implementation of the software is generally handled by the service engineer from the vendors’ side in the case of small and mid-size restaurants. Whereas, in the case of restaurants that are part of big hotel chains, the implementation is handled by technical experts from vendors or partners in collaboration with the in-house technical team of the hotel.
When Should You Implement Restaurant POS Systems?
POS software can be implemented either during the start of a new business or in the middle. Buyers should make sure that the implementation process doesn’t interfere with the daily operation of the restaurant. Hence, it is recommended to schedule a suitable time after business hours or on weekly off days that doesn’t hamper the regular timeline and makes the entire process seamless.
Restaurant POS Systems Trends
Online ordering
Ordering food online is a huge trend and one that is likely not going away anytime soon. If a restaurant doesn’t offer online ordering, they’re likely missing out on a huge amount of potential revenue. Luckily, restaurant POS software makes it easy to create an online ordering portal with minimal effort on the user’s part.
Table management
Cloud-based POS software simplifies syncing multiple mobile devices so servers can ditch the ticket pad and use a tablet or mobile phone to place orders. With the increased speed and accuracy, it’s understandable why more and more full-service restaurants are implementing this solution.
Tablet-based POS
Most POS systems are optimized to run on an iPad or similar tablets, saving restaurant owners money by being easily replaceable and not requiring a computer mouse or keyboard. Tablets are also portable and easy to set up, making them ideal if the user wants to try out new layouts or train new employees.
Customer self-service
With cloud-based POS systems, kiosks can easily be set up so customers can place orders at their convenience. Much like online ordering, customers are interested in on-demand services that reduce wait times.
