Buying a restaurant POS system is an expensive affair and a long term investment. We have already covered the benefits of a POS system and why restaurant businesses should consider buying one in a separate post. This post covers some basic things businesses should consider when buying a restaurant POS system and aims to help them make a more informed buying decision.
A POS system is like the central command center that allows managing a wide range of operations, including transactions, customer services and back-end operations. That’s why it’s so important to pick a solution that matches business requirements and budget.
All POS systems are not created equal and picking the wrong one can severely affect operations in the long run. Availability of so many solutions with each provider claiming to be the best makes the situation even more complicated for business owners. Let’s get started with some key points businesses should consider before making a final decision.
Generic vs. Specialized POS Systems
There is no such thing as one-size-fits-all thing when it comes to software solutions, especially POS systems. POS systems are designed keeping needs of different industries in mind and a retail POS system might not be able to cater the needs of restaurant businesses. Sure, some features might be common and adaptable, but most other requirements will be different.
Businesses should choose a POS system that has been developed and designed specifically for their industry, not just a generic system that tries to be the jack of all trades. Although almost all modern POS systems come with a wide range of features and functionalities, they don’t work equally well for all types of businesses.
POS systems designed specifically for restaurant businesses allow handling operations more efficiently such as managing ingredients and menus, splitting bills, table-side ordering and more. A generic POS system might allow you to manage some operations, but they are not designed to help restaurant businesses succeed.
On-premises/legacy vs. Cloud-based/Mobile POS Systems
Both on-premises and cloud-based POS systems have their own pros and cons. On-premises systems are more hardware oriented and installed on a local machine. Although these systems can also be connected to the internet to share information, most of the processing is done locally. Cloud-based systems on the other hand are not restricted to any particular device and the information can be accessed from anywhere, using almost any device.
On-premises POS systems provide businesses with more control over their data and how it is processed. However, they require technical expertise and are suitable for businesses that have the resources and technical know-how about how to maintain and troubleshoot issues when they arise.
Cloud-based POS solutions are becoming popular because the data is stored in the cloud and is remotely accessible from anywhere even through mobile devices. The initial cost is also fairly low compared to legacy systems, while updates and troubleshooting is also covered by the provider. Using a cloud-based solution is the quickest way to get started and setup a POS solution, while these systems are also easier to use and learn. This is a big advantage for the restaurant business industry with a high employee turnover as it’s not practically possible for small and medium businesses to extensively train their employees.
Choosing between these two options depends on different factors, including budget, integration support, customizability and scalability. Cloud-based solutions are inherently more scalable and flexible than on-premises solutions and suitable for businesses that want an easy to use system that does not require professional IT expertise to setup and maintain. Large businesses that want complete control over their data usually prefer on-premises solutions, but they have also started moving to the cloud because of low more flexibility, low upfront costs and easier maintenance and training.
A POS system comprises of hardware and software (on-premises and cloud-based software as covered above). Hardware components include credit card reader, barcode scanner, display unit/tablet, cash drawer and receipt printer. The quality and quantity of hardware components depends on business requirements and cost, but businesses should consider EMV-compliant card readers and tablet-based display units for easier access and better mobility.
Restaurant POS Features to Consider
Choosing a POS system based on functionality and features you need is more complex that it might seem. That’s because it involves properly evaluating business requirements and choosing a system that aligns to the business growth strategy. POS systems are a lot more than just an alternative to cash registers and have evolved into complex systems designed to speed up operations, increase efficiency, customer loyalty and ultimately boost revenues.
Service/hardware providers offer different subscriptions and plans that are priced according to varying functionalities. Most modern POS systems include all the basics plus a large number of other features, including:
- Inventory management
- Customer management
- Employee management
- Sales reporting
- Integration support
- Mobile payment support
- Fingerprint login
- Customer database
- Online ordering
- Ingredient and recipe management
- Tableside ordering
- Table management
- Menu management
- Kitchen display system
- Customer facing displays
- Self-ordering kiosk
- Reporting and analysis
- Digital menu boards
- Communication and collaboration
- Profit optimization
- Marketing campaigns
- Menu designing
- Theft prevention and control
- Floor management
- Performance reporting
- Automatic promotion scheduling
- Tip pool calculation
- Check emailing
- Trend analysis
- Remote management
- Time clock
However, all restaurant businesses might not need all these features and there is no point in paying extra for the functionality you won’t be using. But this also does not mean you should skip on the essentials. Full-service restaurants have different requirements than pizzerias and mobile shops. That’s why businesses should take time and consider features that fit their current needs and can help them succeed.
Mapping business requirements and cross matching it with the feature set of different plans is a good starting point. Not only it helps in picking the right solution, but it also aids in employee training and day-to-day use. Choosing an easy-to-use system helps a lot in the development and training phase and makes it easier for employees to efficiently manage routine tasks.
Important Things to Consider in a Restaurant POS System
One of the most important components of a POS system that updates inventory automatically and makes managing stock quantity a breeze. Multi-location businesses should consider a solution that supports inventory tracking across multiple locations and consolidating inventory data with orders and purchases. Auto restock reminders, stock transfers and PO creation are some important features to consider in this category.
Reliability and Speed
Businesses need a robust, reliable and fast system to support their fast-paced operations. Unresponsive or slow restaurant POS systems not only affect revenues, but also leave the customers dissatisfied, which is the last thing any restaurant business would want. No one likes to wait in long queues so it’s better to test drive the system to make sure that a POS system:
- Has a user interface that’s easy to navigate, intuitive and customizable according to different roles.
- Supports split bills, bar-to-table bills, menu item splitting etc.
- Supports EMV-compliant payment and preferably mobile payments such as Apple Pay.
- Can work offline in case of power or internet outage.
Reliability is subjective and different people might have different opinions about how reliable a solution is. Reading online customer reviews and test-driving a solution is a great way to get a fair idea of how reliable and fast a solution is.
The Total Investment
The cost of implementing a POS system depends on different factors, including the number of terminals, store locations and handheld devices and whether you want a cloud-based or a locally installed system. On average, modern POS equipment can cost something around $1,000, while monthly subscriptions can cost something between $60-$99 per month (for single terminal setup).
The cost increases with the number of terminals and advanced features such as APIs, loyalty programs and advanced inventory management. Payment processing cost is another important overhead expenditure to consider and mainly depends on the payment processor. Some POS systems lock you in with their preferred payment processor while others allow you to choose your own.
A POS system is not just about investing money and expecting everything to get on auto-pilot straight away. Businesses also need to consider the costs associated with staff training and aligning the existing data. Choosing a POS solution with the lowest upfront cost is not always the best strategy.
Sure, it’s not easy to accurately measure the expected ROI by buying a POS system, it’s still important to estimate the impact a POS can have on overall productivity and efficiency. Different aspects of the investment include:
- The actual upfront cost of buying and deploying a restaurant POS system.
- Time and cost involved in training the staff in an industry that experiences a high employee turnover. An intuitive solution is easy to adopt and it takes less time to train new employees.
- POS systems that support loyalty programs and scheduled promotions help increase repeat visits and save a lot of time that otherwise might have been spend on manually sending targeted offers.
- Businesses that use different systems to manage different tasks such as sales, staff scheduling and inventory need a POS system that integrates well with them. Otherwise, they’d had to input data on multiple systems, which greatly increases chances of errors and data duplication.
- The inventory management system should help reduce waste and save money by helping users order just the right amount of ingredients and other items.
Trustworthiness and Reliability
All POS system providers claim to be the best, but in reality they are not equal. The reputation of a provider matters a lot when choosing a POS system. In addition to online reviews and user feedback, business owners should also meet and visit other businesses nearby to get their opinion about the solution they are using. A random POS solution form a cheap provider can cost you more in the long run with inadequate support, slow and irresponsive system and frequent downtimes.
We should not entirely dismiss new technology providers with no proven track record, but it’s better to stick with established and reputable technology partners that you think will remain in existence in the future. Ask the provider for references and talk to their existing customers about their experience with the solution, which should provide a fair idea of where the provider stands. If a provider is not willing to provide references, chances are good that their existing customers are not too happy about the services they are getting.
Scalability and Flexibility
Restaurant businesses anticipate growth when buying a POS system otherwise they might have been fine with their existing system. But each business has different growth objectives. Some might be looking to increase the number of customers while others might be planning on building a whole chain.
Scalable and flexible POS systems allow businesses to easily add new POS terminals, locations and integrate with the latest apps. Solutions with an open API make it a lot easier to integrate with third party apps and make expansion hassle-free. Rigid systems with limited integration support might be cheaper in the start, but they can become a hurdle when your business starts experiencing growth.
A POS system should be able to accommodate your expansion plans such as changing menus, expanding to different locations and hiring more employees. It’s easier to upgrade a subscription and add functionality than to move onto a new system.
Compatibility with Existing Hardware/Software
This is more relevant to restaurant businesses that are already using a POS system and want to upgrade. It’s better to choose hardware/software solution that are compatible with the current setup otherwise businesses might have to reinvest in hardware such as barcode scanners and POS terminals and compatible software.
A POS system is more than just a hardware/software package and should be treated like a long term relationship. Great customer support is equally important to build and maintain that relationship. That’s why it’s important to choose a provider that cares about its clients and is willing to contribute towards their success.
There will be times when the users will need help regardless of how easy-to-use and intuitive a solution is. Timely resolution of issues and answers to questions can make a real difference for fast paced restaurant businesses. On the other hand, slow and unresponsive customer support can cost a business a lot of money and dissatisfied customers in case of frequent issues or system glitches. The customer support should be able to resolve an issue before it starts impacting the business and revenue.
The provider should also offer plenty of learning resources on its website, allowing users to easily self-learn important information and troubleshooting guidelines. Businesses should also prefer providers that offer customer support during the working hours. Offshore solutions might be cheaper, but the provider might be operating in a different time zone and not be able to offer timely customer services.
User Reviews and Free Trials
Online forums, blogs and the social media are all great channels of gathering information and reading reviews. However, businesses should not limit themselves to the information available online and also take time to talk to other business owners who are already using a POS system.
Most solution providers offer free trials and let you test drive the solution before you commit to anything. Running a trial as if it was being used in a live environment gives businesses a fair idea of what to expect from a particular POS system and if the users will be able to operate it without extensive training. Free trials also help determine how much time employees will take to learn and master the new system.
Summary of Important Features to Look for in a Restaurant POS System
- The system should be easy-to-use and learn
- Should be connected with the kitchen in real-time
- Ensures up-to-date stock
- Effortless order management
- Table management
- Menu creation and optimization
- Integration with other systems such as accounting and bookkeeping software e.g. QuickBooks
- Ability to accept online orders if a business is planning to expand and provides more ordering options
- Ingredient-level stock management
- Check splitting
- Ability to accept mobile payments such as Apple Pay
- Makes tax and sales tracking effortless
- Ability to handle a large amount of cash and credit card transactions
- Make it easier to setup and configure menus, including pricing changes without rebooting the terminal
- User-friendly management of orders
- Provide user-level controls
- EMV and PCI compliant
- Flexible inventory control
- Fully-integrated employee management system
- Comprehensive reporting, ability to filter customer and sales and reporting data
- Inventory and employee performance reporting
- Customer loyalty programs
- Built-in marketing tools
- Table service management
- Reservation management
- Easy register layout
- Automatic reorder notifications
- Centralized control of promotions and menus
- Ensures accuracy and maximizes food quality
- Email marketing integration support
- Great customer support, preferably locally or based in the same time zone
Purchasing and deploying a POS system is costly, time consuming and a long-term commitment. The best POS system for you is the one that meets your specific needs, is reliable and robust and comes with great customer support. The benefits of using a restaurant POS are obvious, but it’s important to choose the right solution in the first place. Every restaurant business wants a robust and speedy POS, but it takes time and some homework to figure out the one that perfectly fits your budget and business requirements.