What is a POS?
The point-of-sale system is a combination of hardware and software that allows restaurant businesses to handle their workflows and transactions more efficiently. Modern POS systems have become much more than systems that aid in taking orders and checking out.
Form bars to fast food and fine dining restaurants, POS systems have become an integral part of most modern restaurant businesses. A POS system allows them to efficiently process payments, manage menus, routine operations and employees.
A POS system connects all parts of a restaurant business and helps streamline different tasks, including menu management, customer services, data analysis, inventory management, invoicing and payment processing.
Any restaurant, whether a bar or a pizza place can benefit from a modern POS system, which speeds up the payment process and makes it a lot easier to handle customer data. When compared to manual methods and traditional software, POS systems provide a lot more advanced functionalities and features for better management of restaurant operations.
These features include automatic tracking of stock levels, employee management, payroll reporting and customer behavior and advanced performance tracking. Simplified accounting and reporting, streamlined communications, better employee and performance management and faster billing processes are just some of the many compelling reasons for investing in a restaurant POS system.
Why Use a Restaurant POS System?
Progressive restaurant businesses strive to deliver great dining experiences to their customers from the time when they enter a venue to the moment they leave. Delivering such a level of service requires some help in the form of modern technology. POS systems designed keeping needs of restaurants in mind help keep the employees prepared and ensure smooth running of restaurant operations.
POS systems automate most of the routine tasks, allowing businesses to focus more on delivering great experiences. These systems can have a profound effect on customer satisfaction and ultimately revenue growth.
Types of Restaurant POS Solutions/Systems
POS systems can be broadly categorized into legacy POS and mobile POS systems. The hardware-based legacy POS systems involve hardware physically placed inside the restaurant and usually need to be updated and maintained manually. Legacy systems in general are not connected to the cloud as storage, processing and data transfer takes place locally.
Mobile POS systems on the other hand are more software oriented, cloud based and use multiple stations connected to a centralized place i.e. in most cases the cloud. Cloud-based functionality means that the information is updated in real time and available to all stations without any manual input. Mobile POS systems help create an efficient communication path and allow businesses to do multiple tasks at once.
Choosing between the two mainly depends on business requirements. Mobile POS and cloud-based POS systems are usually not demanding on effort and time and can be installed pretty quickly. Legacy POS systems on the other hand might require special services and hardware to properly fit into a restaurant business environment.
Continued operation and experience with the software solves most of the issues generally associated with using POS systems, including training and getting used to the new software. However, it’s still recommended to hold extensive training sessions since the POS system is at the center of all restaurant operations.
Buying and Installing a POS System
Contrary to the popular belief, modern POS systems are not that difficult to install and setup. Cloud-based restaurant POS systems are the easiest to get started with as they do not require local installation and can be accessed from almost any device.
Determining business needs and identifying priorities is a good starting point when searching for a POS system. Need identification is followed by choosing the appropriate software/hardware/bundle plan.
Most POS system providers also offer installation and maintenance services. Some charge a small fee for their services while others bundle these services with their subscription plans. Staff training is another aspect to consider and since most restaurants don’t have time and resources to offer extensive trainings, it’s better to choose an easy-to-use solution at the first place.
Benefits of Using a POS System
POS systems provide businesses a competitive advantage and carry many benefits for owners, employees and customers. Benefits for owners include automation of clerical tasks, reduced manual work, effective marketing campaigns and streamlined routine operations. Simpler tipping, better visibility into performance, clearer communication, better customer services and easier payment processing are some of the benefits for employees.
Customers also benefit from a restaurant POS system as it increases customer satisfaction and loyalty. Customers can make payment easily and even book seats from the comfort of their home. Elimination of data duplication and errors means that the customers don’t have to experience the headaches related to booking seats, placing orders and making payments.
Key Benefits of Using a Restaurant POS System
Inventory tracking is a key feature of POS systems and keeps everyone updated about stock levels. Menu items can be easily tracked and the system automatically notifies users when they start running low on top sellers. Inventory tracking ensures that the staff know what, when and how much to reorder.
Consistent and streamlined communication between the front and back end makes services faster and less prone to human errors. POS systems standardize order handling and help organize menu items on display systems, making them easier to read and understand. This also makes modifications easier so the servers don’t have to run back to the kitchen to explain kitchen employees the allergies a customer might have.
Employee Tracking and Performance Management
Makes tracking of the front-end employees easier by showing how much are they selling and the number of voids they are entering. A POS system makes it easier to track for how long the servers are taking with each table/customer. They provide an overview of staff performance, allowing managers to manage performance more effectively and identify areas that need improvement.
POS systems help optimize menu prices by breaking down contribution margins and food cost percentage according to menu item and day. This makes it easier to determine the right prices, which can be updated instantly from anywhere.
Restaurant POS systems make it a lot easier to identify top selling and most profitable menu items. Some dishes sell well, but cost more to make so might not be as profitable as other dishes that don’t sell that well. Managers can easily adjust prices from anywhere using almost any device once they figure out these details.
Better Product Knowledge
Better and more consistent product knowledge as servers can carry around all the information they need on tablets or mobile devices.
Better, Quicker Services
Faster transactions and checkouts. POS systems allow businesses to serve more customers in less time, which results in less time spent waiting in lines by eliminating some steps from the front-end workflows.
Mobile POSs work well for full-service restaurants, allowing servers to take table-side orders. Servers just have to punch-in orders right at the table, which not only speeds up the service but also minimizes chances of errors.
Mobile Payments and Alternate Payment Options
POS systems provide customers with more payment options, including mobile payments which is becoming a norm at a rapid pace. Offering customers a payment option that’s EMV-compliant helps boost revenues and offers better security and payment convenience to customers.
Highly Targeted Marketing Campaigns
The data collected through customer loyalty programs helps create highly targeted marketing campaigns and allow restaurant businesses to offer personalized experiences.
Mobile POSs simplify the transaction process; one person can take advance orders while the other can process payments at the same time, resulting is quicker services and satisfied customers.
Menu Design Optimization
POS systems allow restaurants to optimize their menu design and place menu items strategically in the Golden Triangle (the part that customers read first) according to different criteria such as profit margin. Optimized menu designs can influence customer spending and ultimately boost revenues.
POS systems make it super easy for customers to place orders online. Businesses can take orders from a variety of platforms, including their own website and other delivery apps such as Uber Eats and DoorDash. These systems can integrate with a variety of other apps, allowing businesses to grow and make more sales.
Minimize theft by ensuring that the inventory heading out has been paid by tracking all orders and restricting employees’ access based on their position.
Help increase upselling without having to totally rely on employees. The front-end staff can upsell using the POS with customizable upsell prompts.
Improved Customer Retention
Improve customer retention rate through loyalty programs that are integrated into the POS system, which tracks interactions and allows creating a database that can also be used in other ways.
Real-time Floor Management
More effective and real-time floor management to keep the service moving at a good pace. This helps in associating money and time to each section/table more effectively.
Cost Reporting and Spending Analysis
Cost reporting and breakdown enables managers to see how a business is spending on food, labor etc. Detailed cost reports based on different criteria such as gross sales, the number of items sold and gross costs allow them to cross reference this information with sales reports and make accurate forecasts, including staff scheduling and future purchasing.
Being aware of how employees are performing allows the management to reward top-performing employees and provide training to employees who need it. Performance reports cover important metrics, including how much customers of specific employees are spending and time-per-table-turn. These performance indicators result in better engagement with the staff and employee retention.
POS systems that don’t store CC information in their company systems help prevent credit card fraud. Most of these systems can also connect with other EMV-compliant payment systems such as PayPal.
Minimize order related errors, which can cost money, time and last but not the least dissatisfied customers. Mobile POS systems allow servers to take tableside orders on a tablet or other mobile device, which saves them from having to punch the order manually, minimizing chances of human error.
Automatic Promotion Scheduling
Promotion scheduling and menu specials can be run automatically until specified. This significantly reduces chances of human error associated with manual adjustments and scheduling. POS systems can be programmed to do things such as automatically subtract discounts for specified items or during specific times.
Ingredient and Stock Tracking
POS systems prevent employees from inputting menu items already out of stock, which saves time and help keep track of inventory in real-time. Inventory and ingredient tracking keeps all the employees informed, while automatic prompts notify servers when an item gets 86’d or is in low quantity. This saves customers time as servers can notify them immediately if a menu item is not available.
Separate Billing and Menu Item Splitting
Customers don’t like being asked about separate bills up front while it’s also not easy for servers to produce separate bills. A POS system makes this task a lot easier by dividing and calculating separate bills for the customers. POS systems also make it easier to split menu items between different customers.
Bar Tab Tracking
Keeping track of bar tabs can be a time consuming and tedious task when done manually. POS systems allow staff members to manage customers more efficiently and allow them to keep track of drinks. A bartender can simply use the bar tab to process payment or even transfer them to a different table with the existing information.
Tip Pool Calculation and Distribution
Tip pool calculation and management ensures that employees are getting their fair share. A POS system can automatically calculate contributions when a server cashes/clocks out, allowing the management to fairly distribute funds.
Integration with Bookkeeping and Accounting Software
Integration with accounting software such as QuickBooks, Xero and Sage eliminates data duplication and saves users from having to input data manually into different systems. This provides the management with accurate, up-to-date data in one place and makes it available for bookkeeping and accounting purposes.
Emailed guest-checks is an effective way of reducing cost related to printing and provides more convenience to customers. The option of emailing customer guest-checks saves customers from worrying about losing printed checks, which is especially useful for customers who are having meals at business expense.
Daily and Sales Reporting
Real-time view of sales and daily reports include important information such as items sold, time served, payment method used and who sold it. This information aids the management in making important business decisions and taking the necessary steps to foster business growth.
POS systems allow the management to make more informed labor related decisions and ensure that adequate staff members are available during busy times/days. Busy days and times can easily be identified through sales reports, which helps managers allocate the appropriate number of staff members at any given time.
Trend analysis is another key benefit of using a POS system, which helps spot underlying trends and make more informed business decisions based on historical data. Managers can compare performance based on different criteria such as on a month-to-month or week-to-week basis.
Cloud-based POS systems allow managers to keep track of everything while on the go and see what’s happening at the venue in real-time. Remote menu management makes it easier for them to make changes on time and manage everything even if they are far away from the venue.
Regular data backups to the cloud ensures that all the important data is safe in case a system crashes, gets stolen or if a particular technology fails. Businesses can restore their data regardless of the hardware being used when using a cloud-based POS system.
Measuring Effectiveness of Marketing Campaigns
POS systems help in measuring effectiveness of marketing campaigns by tracking promo codes and special promotions. The numbers clearly tell how many customers have responded favorably to marketing campaigns and what needs to be done to improve effectiveness of such campaigns.
Modern POS systems make staff scheduling hassle-free and allow creating schedules based on different criteria, including skill levels, target labor ratios, peak timings and employee historical data. Integration with other scheduling systems such as 7shifts allow the POS system to automatically pull scheduling information and ensure that the best servers are allocated for packed venues and sporting events.
Effectively running a restaurant can become tiring, especially when a business is not using any modern technology such as a POS system. Mobile POS systems come with advanced features and are increasingly becoming popular due to easier adoption and hassle-free setup.
Restaurant businesses often have to confront with difficult questions, including whether to buy an expensive solution that is more customizable or go for a run-of-the-mill solution that just covers the basics.
Answers to these questions depend on a variety of factors, including the business strategy, current business situation, the competition and integration support. In any case, a POS system should be easy-to-use and learn, should integrate well with existing apps and allow businesses to process payments using their/customer’s preferred payment method.
Understanding business priorities and requirements is the key here, allowing businesses to pick a solution that makes financial sense and helps streamline their restaurant operations.