Whether you’re a first-time restaurant owner or you’re looking for ways to improve the efficiency of an existing operation, you need a good system for processing customer payments. These days, most restaurants use digital POS (point of sale) systems. These are technology-based solutions used to not only process payments but also store data, provide customer reports, and more.
Today, restaurant POS systems are increasingly seen as basic technology for operating a restaurant.The systems are rapidly advancing in what they can do, both on their own and by being linked with other systems. This technology presents a great opportunity for restaurant owners, but it can also make choosing a POS system challenging.
To help you navigate this difficult choice, we have compiled the basics on restaurant POS systems. Read on to learn more about these versatile systems, including a look at their key components, benefits, and features.
What Is a POS system?
A POS system is a technology-based solution for managing financial transactions and other activity in your restaurant. Your POS system serves as a central hub for processing payments, recording payment data, delivering reports on customer behavior, measuring employee productivity, tracking menu item sales, and much more.
The Physical Components of a Restaurant POS System
A POS has two main elements — the hardware and the software. Let’s look at the hardware first. Most POS systems require the following physical components to function:
- Monitor/tablet: Usually located at a server station or checkout counter, the staff uses this to enter orders or payments. This screen will also provide a dashboard for navigating sales data and running reports. Another of the monitor’s important functions is as a hub where staff members can clock in and out for shifts.
- Receipt printer: Many POS systems can now send email or text receipts, but some customers will still request a hard copy of their receipt, so most POS systems include a receipt printer.
- Cash drawer: Unless your restaurant is entirely cashless, your POS system should be integrated with your restaurant’s cash register.
- Kitchen and bar printers/Kitchen Display System (KDS): Your POS must be able to send orders from the terminal to the kitchen or bar, where orders will either print out or appear on a Kitchen Display System (KDS).
- Card reader: Almost all restaurant POS systems involve a device for where the customer can swipe, insert, or tap their credit card. Many POS systems include the card reader directly as one of the hardware components, while others connect a third-party card reader through a software-based integration known as an API.
In either case, the payment card system you choose must be PCI compliant (meet Payment Card Industry Data Security Standards, which cover all credit and debit card transactions) and PA-DSS compliant (meet Payment Application Data Security Standards, which cover only payment apps).
In addition, payment devices should be able to accept two types of payment card transactions:
- Card Present transactions (magnetic swipe and EMV chip)
- Card Not Present transactions (NFC tap, ApplePay, GooglePay, etc.)
While the POS hardware components listed above are fairly standard, the POS software solutions are far more varied, with a wide range of features and functions. Choosing the right POS system for your restaurant will depend on your needs, your budget, and your existing technology system.
The Benefits of Implementing a POS System in Your Restaurant
There’s a good reason that POS systems are by far the most popular technology solution in the restaurant industry. When you use a restaurant POS system, you can:
- Consolidate sales information: Restaurant POS systems gather all your sales data in one place, reducing the possibility of error and eliminating the tedium of physical bookkeeping.
- Organize orders: Restaurant POS systems organize orders and communicate these orders to the back of house without the chaos and clutter of physical ticketing.
- Track inventory: Restaurant POS systems can be integrated with inventory management systems, allowing for real-time visibility into available ingredients, menu items, and specials.
- Improve staff management: Leading restaurant POS systems will include or integrate with employee management systems, allowing you to use sales data to identify peak and off-peak hours and to staff your restaurant accordingly.
Key Features of Restaurant POS Systems
As noted above, restaurant POS systems come with all kinds of bells and whistles that you’ll need to consider when choosing the system that’s right for your operation. However, there are also several standard features that should be included in any POS solution. Below are several must-have features that you should look for.
- Payment processing: At the very least, your POS should be able to process credit cards, mobile payments, and cash.
- Reporting: Since your POS keeps track of all your data, it should also have robust reporting capabilities. These reports will give you a deeper understanding of your business by providing daily sales numbers, highlighting the popularity of select menu items, measuring your sales volume for given periods of time, and more.
- Inventory management: Your POS system will provide valuable sales mix and product mix information. Both data points are central to your inventory calculations. Your POS system may also integrate with your inventory tracking software, which can help automate re-ordering. Effective restaurant POS systems will use sales data and inventory tracking to automate ordering as needed.
- Customer engagement: Many POS systems integrate with customer relationship management (CRM) software, which can help you capture customer contact info and order history in order to create personalized messaging, rewards, and loyalty programs.
- Labor management: Most systems include solutions for staff management, which may be used to coordinate shift scheduling with sales trends as well as provide insight into sales metrics for individual staff members.
Tips for Choosing a POS System for Your Restaurant
Now that you understand the basics, how do you choose the right POS vendor for your restaurant? There are a lot of options out there, but ultimately the best POS vendor is the one that meets the unique needs of your business.
So the best way to choose a POS system is to shop around and ask the right questions. Here are some of the key questions you’ll want to ask when choosing a POS system for your restaurant:
- Does this POS include all the hardware I need? Ensure that the POS is compatible with your existing setup and includes the physical equipment required for implementation and day-to-day operations.
- Does this POS come with sales, labor, menu, and product reports? Your POS should be able to run detailed reports. When vetting prospective vendors, look for deeper insight into reporting capabilities.
- What restaurant-specific features does this POS offer? Some POS platforms are designed for general business purposes, and may not be specifically tailored for the restaurant industry. Inquire about the features of your POS as they pertain to the restaurant business. Be sure that any solution you’re considering covers your full range of needs.
- Is the POS user-friendly? Your staff will need to use any POS system you implement. Choose a solution that requires minimal training, that can be implemented with minimal disruption, and that does not create additional work for your team.
- Does the POS come with strong customer support? Make sure that your POS vendor is prepared to be an active partner, ideally one that offers reliable 24/7 customer support services.
- How much does the POS cost? Know the full price of a POS platform upfront. Inquire about hidden fees, ask about different service packages, and determine whether or not the total investment is compatible with your budget.