POS stands for “Point of Sale,” which refers to the system that restaurants use to conduct business transactions. These systems are the technological backbone of modern dining establishments, streamlining operations from the kitchen to the customer.
This article will delve into POS systems, explain how they work, the features they offer, and the benefits they bring to restaurant management. Whether you’re a seasoned restaurant owner or new to the industry, check out how POS systems can enhance your restaurant’s efficiency and improve its customer experience.
What Is a POS System in a Restaurant?
A restaurant POS system is a comprehensive tool designed to streamline the front and back-end processes within dining establishments. These systems go beyond processing transactions and effectively manage everything from table reservations and order tracking to inventory control and employee payroll and scheduling.
As technology advances, more restaurants are adopting cloud-based POS systems, which offer several enhancements over traditional setups.
Cloud-based POS systems are capable of providing real-time data synchronization across multiple locations, and this makes them ideal for restaurant chains or those with extensive operations. This technology enables restaurant owners and managers to access operational data from anywhere, using any device connected to the internet.
Furthermore, cloud-based systems are known for their scalability and flexibility which allows for easy updates and integration with other digital tools like reservation apps and online ordering platforms.
The shift towards cloud-based POS systems reflects a broader move in the restaurant industry towards more agile, data-driven management practices that can adapt to changing business needs and customer preferences.
How Does a POS System Work in a Restaurant?
A POS system in a restaurant acts as the central hub for all transaction and operational activities, and a critical component for the smooth management of daily functions.
Here’s a simple six-step breakdown of how a modern POS system operates:
- A customer places an order which is directly entered into the POS system by a server or through a digital interface like a kiosk or online platform.
- The order details are immediately displayed on screens in the kitchen, allowing staff to start preparing the meal without delay.
- As each dish is prepared, the POS system automatically updates the inventory by deducting the ingredients used from the stock, ensuring accurate inventory levels.
- Once the meal is ready, it’s delivered to the customer’s table or prepared for takeaway, depending on the order type.
- After enjoying their meal, the customer makes a payment through the POS system, which can accept various forms of payment securely and efficiently.
- Throughout the day, the system will collect customer data
from every transaction, which can later be analyzed to provide insights on sales trends, menu popularity, and customer preferences, helping to inform business decisions.
As you can see, the modern POS system streamlines every aspect of restaurant operations, from order entry to final payment, ensuring efficiency and providing valuable insights that help enhance the dining experience and business performance.
Features of Restaurant POS Systems
Having explained what is a POS system in a restaurant and how it works, let’s have a look at the main features that allow this technology to optimize restaurant management and enhance experience of the customers.
Inventory Management
Inventory management is a fundamental feature of modern restaurant POS systems that allows restaurant owners and managers to keep track of stock levels in real-time.
Every time an order is placed, the POS system automatically updates the inventory, and deducts the necessary ingredients from the stock. This helps maintain an accurate count of all inventory items and ensures that restaurants never run out of essential supplies.
For example, when a customer orders a dish, the POS system reduces the quantities of ingredients used in that dish from the total inventory. This automation helps prevent understocking, but also minimizes waste and ensures fresh ingredients are always available.
Kitchen staff can use the system to track inventory and receive alerts when supplies are running low, allowing them to reorder promptly.
The benefits of inventory management extend to all levels of the restaurant’s operations. Managers can analyze usage patterns to forecast future inventory needs, which helps in budgeting and reducing food costs. Chefs can ensure they have the ingredients they need for daily operations without overburdening storage spaces.
Overall, this feature contributes to a more efficient and cost-effective kitchen operation.
Customer Relationship Management
CRM is another valuable feature of restaurant POS systems. The restaurant POS software stores detailed information about customer preferences, order history, and contact details. By leveraging this data, restaurants can enhance customer service and build stronger relationships with their patrons.
With CRM capabilities, restaurant staff can provide personalized service by recalling a customer’s favorite dishes or special requests. This personal touch can significantly enhance the dining experience and foster customer loyalty.
Moreover, restaurants can use the stored data to create targeted marketing campaigns, sending out personalized offers, discounts, or event invitations to regular customers.
Developing loyalty and reward programs is another aspect of CRM that POS systems facilitate. By tracking customer visits and spending habits, restaurants can reward loyal customers with points, discounts, or exclusive offers. This not only encourages repeat business but also helps attract new customers through word-of-mouth referrals.
By utilizing CRM features in POS systems, restaurants can significantly improve the satisfaction of customers, increase their loyalty, and drive long-term success.
Staff Scheduling
Staff scheduling is another beneficial feature offered by modern restaurant POS systems which allows managers to create, manage, and adjust employee schedules with ease. The system can consider factors such as employee availability, peak hours, and labor laws to generate the optimal work schedules for the staff.
Using the POS system for staff scheduling, managers can make sure that there are always enough employees on hand to handle the expected volume of customers. They can avoid overstaffing or understaffing, which can lead to either increased labor costs or inadequate service.
What’s more, employees can also view their schedules in real-time, receive notifications about upcoming shifts, and even request shift changes using the system.
All in all, the staff scheduling feature streamlines the scheduling process and saves valuable time for managers. It also reduces the likelihood of scheduling conflicts and helps improve employee satisfaction by providing transparency and flexibility in managing their work hours.
Kiosk Ordering
Kiosk ordering is an innovative feature in modern POS systems that allows customers to place their orders directly at self-service kiosks. These kiosks are equipped with user-friendly touchscreens that display the menu as well as the promotional items and customization options.
It is a neat feature that adds extra convenience as it allows customers to browse the menu at their own pace, and place orders without needing assistance from staff.
While it is useful across various types of establishments, it is particularly advantageous for fast-casual and quick-service restaurants, where it can significantly reduce wait times and enhance order accuracy.
By allowing customers to take control of their ordering process, restaurants can enhance the overall dining experience and cater to tech-savvy patrons who prefer minimal interaction. In addition, kiosk ordering also helps free up staff and allows them to focus on other tasks such as food preparation, table service, and customer assistance.
In summary, kiosk ordering is a valuable addition to restaurant POS systems, offering convenience for customers, operational efficiency for staff, and actionable data for managers.
Order Ingest
An essential element of any restaurant POS system, order ingest is a feature that streamlines the order-taking process and allows the staff to seamlessly receive and process orders from various sources, including in-house dining, online orders, and third-party delivery services.
When an order is placed, whether from a customer dining in the restaurant, through the restaurant’s website, or using a delivery app, the POS system ingests the order and sends it directly to the kitchen. This way all orders are centralized in one system and the risk of missed or delayed orders is minimized or completely eliminated.
Particularly beneficial for managing high volumes of orders during peak times order ingest allows kitchen staff to see all incoming orders in real-time, prioritize them appropriately, and ensure timely preparation and delivery.
Additionally, this feature provides valuable data on order trends and customer preferences across different ordering channels and helps managers make informed decisions about menu management, offerings, staffing, and marketing strategies.
By integrating order ingest capabilities, restaurant POS systems enhance the restaurant’s ability to manage a multi-channel ordering process, improve operational efficiency, and provide a seamless experience for both staff and customers.
Driver Tracking
Driver tracking is a crucial POS feature for restaurants that offer delivery services. Modern POS systems equipped with driver tracking capabilities allow managers to monitor the location and status of delivery drivers in real-time. This allows them to ensure that orders are delivered promptly and accurately to customers.
When a delivery is dispatched, the POS system tracks the driver’s route and provides updates on the delivery’s progress. Managers can see estimated delivery times and address any delays or issues that may arise. This real-time visibility helps improve delivery efficiency which can increase the level of satisfaction among the customers.
The tracking feature is also useful for drivers as it optimizes routes, and guides them on the most efficient paths to deliver orders quickly. It also allows drivers to communicate with the restaurant if there are any problems or if additional instructions are needed.
Finally, from the perspective of the customer, driver tracking provides transparency and convenience. It allows them to receive updates on the status of their delivery, including estimated arrival times, which enhances their overall experience and trust in the restaurant’s service.
In conclusion, driver tracking in restaurant POS systems enhances the management of delivery operations, ensures timely deliveries, and improves the overall customer experience.
Health and Food Safety
Ensuring compliance with health regulations and maintaining high standards of food safety, health and food safety features are integral to restaurant POS systems. These features allow restaurants to easily track the expiration dates of ingredients, monitor the storage conditions, and ensure that the food handling procedures are followed correctly.
For instance, a POS system can alert staff when ingredients are nearing their expiration dates and help prevent the use of spoiled items. It can also monitor temperatures in storage areas to ensure that perishable items are kept at safe temperatures, and reduce the risk of foodborne illnesses.
Moreover, POS systems can assist in managing food recalls by identifying which batches of ingredients were used in specific dishes, allowing for quick and effective responses to safety concerns.
By integrating health and food safety features, POS systems help restaurants maintain compliance with health regulations, reduce the risk of food safety incidents, and provide a safe dining experience for customers.
Integrated Payments
Offering a seamless and secure way to handle transactions, integrated payments are a key feature of modern POS systems. Restaurant POS software can process various payment methods, including credit cards, debit cards, mobile payments, and contactless payments, all within the same platform.
By integrating payments into the POS system, restaurants can streamline their checkout process, reduce errors, and speed up the transactions. On the other hand, it allows customers to enjoy a smoother payment experience, with additional options to easily split bills, add tips, and receive digital receipts.
Moreover, integrated payments provide a centralized system for tracking all transactions for the restaurant. This makes it easier for financial managers to to reconcile accounts and manage financial records.
Additionally, integrated payment systems often come with advanced security features, such as encryption and tokenization, which protect customer data and prevent fraud.
Overall, integrated payments enhance the efficiency of the payment process, improve security, and provide a better experience for both customers and staff.
The Benefits of a Cloud-Based POS System
A cloud-based POS system offers numerous advantages over traditional, on-premise solutions. By leveraging cloud technology, restaurants can streamline their operations, enhance security, and improve accessibility.
Here are some key benefits of using a cloud-based POS system:
- Accessibility
Cloud-based POS systems can be accessed from anywhere with an internet connection. This allows restaurant managers and owners to monitor operations, view reports, and make updates remotely, providing greater flexibility and control over their business.
- Real-Time Updates
With a cloud-based system, all data is updated in real-time. This ensures that inventory levels, sales figures, and other critical information are always current, allowing for more accurate decision-making and efficient management.
- Cost-Effective
Cloud-based POS systems typically have lower upfront costs compared to traditional systems, as there is no need for extensive hardware or IT infrastructure. Additionally, software updates and maintenance are handled by the service provider, reducing ongoing operational costs.
- Scalability
As your restaurant grows, a cloud-based POS system can easily scale to accommodate additional locations, users, or features. This flexibility allows you to expand your business without the need for significant investments in new hardware or software.
- Data Security
Cloud-based POS systems often come with advanced security features, such as encryption and regular backups, to protect sensitive customer data. This reduces the risk of data breaches and ensures that your information is safe and secure.
- Integration Capabilities
These systems can easily integrate with other cloud-based applications, such as accounting software, marketing tools, and online ordering platforms. This creates a seamless workflow and enhances overall efficiency by automating various processes.
- Automatic Updates
Software updates are automatically applied in a cloud-based POS system, ensuring that you always have access to the latest features and security enhancements. This eliminates the need for manual updates and minimizes downtime.
- Disaster Recovery
In the event of a hardware failure or other disaster, a cloud-based POS system ensures that your data is safe and can be quickly restored. This provides peace of mind and helps maintain business continuity.
- Enhanced Customer Experience
With features like mobile ordering, online reservations, and personalized marketing, a cloud-based POS system can help improve the overall experience of the customers. This leads to increased customer satisfaction and loyalty.
By adopting a cloud-based POS system, restaurants can take advantage of these benefits to streamline their operations, reduce costs, and enhance the customer experience.
Restaurant POS System Hardware
A robust restaurant POS system relies on various hardware components to ensure smooth operations and efficient service. These components work together to handle transactions, manage orders, and provide essential information to both staff and customers.
Here’s a look at some key hardware elements in a restaurant POS system:
POS Payment Terminal
To ensure that the integrated payments feature we discussed earlier works seamlessly, POS systems come with specialized POS payment terminals.
These terminals include a touchscreen interface where orders are entered and payments are processed, handling various payment methods such as credit and debit cards, mobile payments, and contactless payments.
Modern POS payment terminals also integrate with the POS software, and enable real-time updates and data synchronization, ensuring secure and convenient transactions.
Kitchen Display System
A kitchen display system is a piece of hardware integral to the order ingest feature which streamlines the order-taking process and sends orders directly to the kitchen.
This digital screen replaces traditional paper tickets, and allows kitchen staff to see orders in real-time. The KDS also helps improve order accuracy, manages preparation times, and streamlines kitchen workflows, while ensuring efficient and timely meal preparation.
Different types of KDS setups can be tailored to specific kitchen layouts and operational needs to make sure the system fits seamlessly into any restaurant’s workflow.
Customer Display System
The customer display system enhances the customer relationship management feature by providing transparency at the point of sale.
This screen shows order details and prices to customers, and allows them to verify their orders before making a payment. It can also display promotional messages or advertisements, leveraging CRM data to create targeted marketing campaigns.
Customer displays come in various sizes and can be mounted on countertops or integrated into payment terminals, catering to all kinds of unique needs.
Driver Display System
The driver display system supports the driver tracking feature, and is essential for restaurants that offer delivery services.
This system provides delivery drivers with real-time updates on delivery addresses, order details, and optimal routes, ensuring timely and accurate deliveries. It helps drivers stay organized and enhances communication with the restaurant if there are any problems or additional instructions needed.
Driver display systems can be integrated with GPS navigation for improved efficiency and better route management for drivers.
Receipt Printer
A receipt printer is crucial for the integrated payments feature, as it provides customers with a physical record of their purchase.
It prints transaction receipts, and ensures transparency and accountability. Receipt printers can be thermal or impact printers, with thermal printers being more common due to their speed and quiet operation.
These printers can also be used to print kitchen orders if a KDS is not in place, which can further complement the order ingest feature.
Cash Drawer
The cash drawer is an essential component for managing cash transactions within the POS system. Connected to the POS terminal, it automatically opens when a cash transaction is processed, ensuring secure and efficient cash handling.
The cash drawer supports the integrated payments feature by providing a secure place to store cash, reducing the risk of theft and ensuring accurate cash flow management.
They come in various sizes and configurations, often with multiple compartments for different denominations and coin storage.
How Much Does a Restaurant POS System Cost?
The cost of a restaurant POS system varies widely depending on the specific needs of the restaurant, the type of hardware and software chosen, and any additional features required. On average, a complete POS system can range from $1,000 to $5,000 for hardware and setup, with ongoing monthly software costs ranging from $60 to $250.
Here’s a more detailed breakdown of average costs for different types of restaurant POS systems:
- Small Restaurants or Food Trucks:
- Hardware: $799 to $3,000
- Monthly Software: $60 to $200
- Medium-Sized Restaurants:
- Hardware: $1,200 to $6,500
- Monthly Software: $100 to $300
- Large or Multi-Location Restaurants:
- Hardware: $5,000+
- Monthly Software: $250+
Additional Costs:
- Payment Processing Fees: Typically 2.3% to 3.5% per transaction.
- Kitchen Display System (KDS): $600 to $1,500 for hardware; $50 to $200 per month for software.
- Self-Serve Kiosk Software: $29 to $90 per month.
- Online Ordering Integration: $75 to $199 per month.
- Loyalty Programs: $15 to $50 per month.
Please keep in mind that these estimates provide a general idea of the investment required for a restaurant POS system, but actual costs can vary based on your specific needs and choices.
How to Choose a Point of Sale System
Selecting the right POS system for your restaurant involves a series of steps to ensure the solution aligns with your specific needs. The process includes evaluating various factors, setting a budget, comparing features, testing systems, and considering long-term growth and support.
Here’s a concise guide to help you through each step:
- Assess Your Needs
Determine the specific requirements of your restaurant, including the size of your establishment, the type of service (e.g., quick service, full service, or food truck), and any special features you need, such as inventory management, CRM, or online ordering.
- Set a Budget
Establish a clear budget for both initial hardware costs and ongoing restaurant software subscription fees. Consider all potential expenses, including setup fees, payment processing fees, and additional features or integrations.
- Research POS Providers
Look into different POS providers and compare their offerings. Read reviews, check their reputations, and consider the features they offer. Focus on providers known for reliability, customer support, and ease of use.
- Evaluate Features
Make a list of essential features your POS system must have. Common features to consider include integrated payments, order management, inventory tracking, CRM, staff scheduling, and reporting tools.
- Consider Hardware Needs
Identify the hardware components you will need, such as POS terminals, kitchen display systems, receipt printers, cash drawers, and card readers. Ensure compatibility with the POS software and check if the provider offers hardware packages.
- Test the System
Request demos or free trials from POS providers to test the systems firsthand. Pay attention to the user interface, ease of navigation, and how well the system integrates with your existing workflows.
- Check for Scalability
Ensure the POS system can grow with your business. Whether you plan to open new locations, add more terminals, or integrate additional features, your POS system should be able to scale accordingly.
- Review Customer Support
Consider the level of customer support offered by the POS provider. Look for 24/7 support availability, training resources, and a responsive helpdesk to assist with any issues that may arise.
- Read the Fine Print
Carefully review the contract terms, including any early termination fees, hardware warranties, and service agreements. Make sure you understand all the costs and commitments before signing up.
- Integrate with Existing Systems
If you already use other software or services, such as accounting tools or online ordering platforms, ensure that the POS system can integrate seamlessly with these systems to create a cohesive workflow.
By following these steps, you can select a POS system that meets your restaurant’s needs, fits your budget, and supports your operational goals.
3 Restaurant Point of Sale Systems to Consider
Choosing the right POS system for your restaurant is essential for optimizing operations and enhancing the experience and satisfaction of your customers.
Here are three popular POS systems you can consider, each with unique strengths and features tailored to meet the diverse needs of your restaurant:
- Toast – Best for Comprehensive Features
Toast POS is designed specifically for the restaurant industry and offers a wide range of features to manage everything from inventory to customer loyalty programs. It’s known for its ease of use, comprehensive reporting tools, and integration with various third-party apps. Toast is ideal for full-service restaurants that need a robust, all-in-one solution.
- Square – Best for Small Businesses
Square POS is perfect for small to medium-sized restaurants and food trucks due to its affordable pricing and easy setup. It offers essential features like processing payments, inventory management, and online ordering. Square’s intuitive interface and flexible hardware options make it a favorite for businesses just starting out or those with simpler needs.
- TouchBistro – Best for Customization
TouchBistro stands out for its ability to tailor the POS experience to the specific needs of a restaurant. It offers detailed table and order management, real-time menu updates, and powerful reporting tools. This iPad-based POS system is particularly useful for establishments that require high customization and efficient management of complex orders.