POS Systems for Restaurants: A Complete Guide

Posted by Tanuj Rastogi on 20th Mar 2021

The Definitive Guide to Restaurant POS Systems

Dining Out & Take-aways have become an important part of the social fabric. They range from speciality foods and cuisines to fast food, cafes, bars, home delivery and street stalls. The global restaurant and food service industry has a market value measuring in trillions of US dollars, with the Australia market valued in billions. The concept of food service businesses may be simple, to offer food and beverages to customers, but management can be complex. Restaurateurs need to oversee multiple aspects of the business such as food preparation, staff, customers, inventory, décor, seating, and transactions.

A useful tool to streamline restaurant operations is a point of sale (POS) system, and over the years, it has become an important asset for food businesses. The primary goal of a  POS system is to conduct transactions, accept payments and produce bills, however, they support a much wider range of features. While your waitstaff may be noting down orders, accepting payment from customers, processing it in the backend, and giving customers receipts, some type of transaction processing is involved. This can be as simple as a cash register with an attached receipt printer, or a restaurant specific POS system.

A dedicated POS system tailor-made for restaurants can be an investment, especially as multiple hardware components are involved. Nevertheless, they offer substantial benefits over other alternatives, cash registers and manual transaction processing. Here is a complete guide to POS systems for restaurants so that you can find the best match for you.

What is a POS System?

A point of sale (POS) system, as the name suggests, is located at the point of sale or purchase point of a business where a transaction is completed. Although POS systems were earlier more commonly associated with retail businesses, their applications are diversifying into food service, hospitality, logistics and more. POS systems are an important part of restaurants, cafes, and the overall food service industry.

In the past, transactions were completed manually with business employees accepting cash or payment in exchange for sold goods. This evolved into cash registers, and then the use of desktop computers, and finally to modern POS systems. An adequately functioning POS system requires POS hardware components and POS software. While the initial installation process may seem complicated, it is a one-time effort to setup the POS system and can easily be maintained.

The basic hardware components include POS terminals,  barcode scanners, monitors, cash drawers, payment processors, receipt printers and any desired additional component. The hardware components do involve an investment, but buying good quality POS components gives you better performance and reliability.

The POS software is instrumental in integrating the POS components and influences the final features the POS system will be able to offer. Common POS features apart from conducting transactions include inventory management, customer relationship management, reporting, employee management and promotional tools. There are also industry specific POS software options, for example for restaurants or retail, with dedicated niche features.

Types of POS Systems

Over the years, POS systems have evolved and there are different types of POS systems available to suit unique business needs. Immensely flexible, POS systems can be customised and adapted to any environment and requirement. The types of POS systems are classified on the basis of the POS software and the POS hardware setup.

  • On-Premise POS Systems

An on-premise POS system refers to POS setup that uses on-premise POS software, also known as local, legacy or traditional POS software. With on-premise POS software, the hosting takes place on local servers on a closed internal network, and software is installed locally. The installation costs of on-premise POS software tend to be higher, but there are no monthly fees, except for paid updates and maintenance costs. Adequate local servers are need to support on-premise POS systems, and backups have to be taken manually. While a wide range of features are supported, adding features after the initial installation can involve extra costs. The biggest benefits of an on-premise POS system are its reliability and that it can be used without internet access.

  • Cloud-Based POS Systems

Cloud-based POS systems are POS setups that use cloud-based POS software and are a great option for businesses with steady internet access. Available in the form of Software as a Service (SaaS), all the POS software and data are hosted remotely on cloud servers and can be accessed from anywhere. Installation costs for cloud-based POS software are low and there is typically a recurring subscription cost either monthly or annually with update costs included. Since the hosting is on a remote server, you don’t need advanced local infrastructure and any device with an operating system can be used. Backups are taken automatically and new features and integrations can easily be added as per requirement. A drawback is that you will need an active internet connection for operation.

  • Stationary POS Systems

A stationary POS system involves a traditional setup where the POS hardware components are located in a fixed location. This can be the main counter for a restaurant or checkouts for retail, or any other desired location. The hardware components are typically connected using wires and are also plugged in for power.

With a stationary POS system, as the location is fixed the setup can be as elaborate as desired with multiple POS hardware components. For example, additional payment processors or receipt printers. Extra monitors can also be used for greater transparency and customer convenience. Based on the available space you have a wider option of POS hardware components. Stationary POS systems can be used with on-premise and cloud-based POS software.

  • Mobile POS Systems

Mobile POS systems, also known as mPOS are rapidly gaining popularity due to the flexibility they offer, and involve having mobile POS hardware components. An mPOS system requires a mobile POS terminal such as a tablet, iPad, smartphone, or other wireless device that is used to conduct a majority of POS functions. Additional equipment can be included like barcode scanners, EFTPOS or receipt printers. Mobile POS systems can be taken anywhere the need arises and directly to the customers.

A mobile POS terminal is often used along with stationary POS systems to get the benefit of a stable and comprehensive setup along with the mobility of an mPOS. The POS hardware components used in mPOS systems are generally wireless and have battery support to reduce the need for wires. Cloud-based POS software is recommended to maintain real-time updates and connectivity between various  POS terminals.

Restaurant POS Systems

A restaurant POS system is designed for restaurant use, and includes all the top features of POS systems along with restaurant specific features. The operations of a restaurant are significantly different from those of a retail business or other store, and accordingly the needs from a POS system vary. Restaurants, cafes, bars and other food service businesses will typically have a separate front-end to deal with customers, and an active backend where the food and drinks are prepared. Orders are placed, conveyed to the kitchen, prepared, served to customers and then payment is completed.

Apart from basic operations, restaurants have a unique employee set up and different inventory needs. The waitstaff and kitchen staff are generally separate and work in cohesion to provide customers with timely service. Inventory of a restaurant is much more time sensitive than with any other type of business as food ingredients are perishable. The inventory is also not directly sold but used as ingredients in cooking, complicating the inventory management process. The environment of the restaurant may require specialised POS hardware components, for example, in the kitchens an impact receipt printer would be advisable for the warmer surroundings.

The goal of a restaurant is to offer customers fast and efficient service, while minimising their own costs and operational overheads. A restaurant POS system is a great way to do so, helping enable efficient front end and back end coordination and with overall management. Restaurant POS software included special features for table management, order management, tableside ordering/payments, inventory management and tracking, employee management, advanced reporting and support for online/telephone orders. Regardless of the type of restaurant or the food/drinks served, a restaurant POS system is a great asset.

Advantages of Using Restaurant POS Systems

A restaurant POS system can be an investment, especially the initial setting up process, depending on the number of terminals you wish to support. It also involves a learning curve for employees and can take some time to gain familiarity with. While it may seem tempting to go with a more old-fashioned system of recording orders and processing payments, a restaurant POS system offers significant benefits. There are advantages not only for the restaurant overall, but also particularly for the owners, staff, and customers.

  • Advantages for Owners

For restaurant owners, management and overall business success and growth are important. A restaurant POS system increases transparency and simplifies the management process. It helps keep track of everything from sales to employees, customers and inventory. At any moment, owners and managers can find out exactly what the current state of the business is.

Apart from monitoring business progress, a restaurant POS system is a powerful way to increase sales and profits. The advanced reports a restaurant POS system provides are data-based and can help identify sales trends and customer preferences. This data can be used to revise and adapt restaurant offerings, seating, loyalty programs, and promotions. POS systems can also keep accurate track of customer feedback and use it to further improve and meet the needs of customers.

A POS system can help you build a better menu supported by data directly from customer preferences. For example, if a particular item is selling well, similar items can be considered and adequate inventory can be arranged, and unpopular items can be removed from the menu. If customers are frequently requesting take away or delivery, you can consider opening a separate counter or taking online orders.

  • Advantages for Staff

A successful restaurant is a group effort and needs hardworking staff. Giving your staff the tools to succeed helps them do their best for the restaurant and customers so that the restaurant can thrive. It may take some time for staff to become familiar with a restaurant POS system, but it will help them improve efficiency, save time and reduce errors.

Most restaurants have some type of shift system for employees, and a restaurant POS system can easily keep track of shifts, attendance and also record requests for shift changes. A unified shift calendar will make sure every employee knows when a shift is. Each employee can use a unique passcode to login to the restaurant POS system, thereby recording all the transactions and orders that took place. Tipping is a common part of restaurant culture and a POS system can help you keep track of tips for employee disbursement and to identify top performers.

Setting up a restaurant POS system where orders are placed helps in accuracy and also gives staff access to data for recommendations. For example, if a particular item is available in excess or if it pairs well with what the customer is already ordering. With a POS system, employees don’t need to rely on memory for suggestions. In dine-in restaurants, where orders are placed at the table, mobile POS devices can be used for taking orders and payments. A restaurant POS system organises orders placed, and can conveys them directly to the kitchen, improving speed and efficiency. Happier employees result in an overall lower turnover rate.

  • Advantages for Customers

Happy customers result in repeat customers, greater sales and a more successful restaurant. It is also important for a restaurant to have a regular flow of daily customers so that perishable ingredients can be utilised in time with minimal wastage. A restaurant POS system offers multiple advantages for customer, giving them a personalised experience and increasing their chances of returning and recommending your business to others.

A restaurant POS system can help with table and floor management, so that customers have minimal waiting time. Orders can be placed faster and with greater accuracy, and if any item is unavailable, your staff will know and can suggest a suitable alternative. Dietary preferences and restrictions can be catered to and orders will reach the kitchen in a quicker manner. Multiple payment options can be supported, giving customers flexibility in payments.

Restaurateurs can launch customer loyalty programmes with the help of POS systems and implement promotions and deals. A customer loyalty programme encourages engagement and customers are likely to visit frequently. Past purchase details can help restaurants offer customers personalised deals that they are more likely to respond to, for example, discounts on their favourite dishes. POS systems also give customers an outlet for feedback, helping them build a positive association with your restaurant.

Components of a POS System for Restaurants

POS hardware components are the foundation of an effective restaurant POS system. There are a wide range of POS hardware components available in various price points to suit all budget sizes. The actual number of POS hardware components you need will depend upon the number of terminals you want to set up, stationary and mobile. If you already have POS hardware components, then verify that all the individual components are compatible. While the features of a POS system will depend upon the POS software, the capabilities of your POS system will depend upon the hardware components.

There are significant differences between a retail and restaurant POS system, and that is reflected in the POS hardware components required. While a retail POS system involves direct purchase of a product, in a restaurant, the order is placed, items are prepared and then payments are made. A restaurant also requires coordination between the front end, where the customers place orders, and the backend, where the orders are prepared. The format of your restaurant, average duration of preparing orders and the location where the customers place the orders will influence your POS system needs. For example, in sit-down restaurants mobile POS systems would be ideal while self-service restaurants can benefit from traditional stationary POS systems.

Always remember to buy only from reputed sellers to get good quality and long-lasting equipment. Here are the top POS hardware components you will need for a restaurant POS system:

  • POS Terminal

The most important hardware component of the restaurant POS system is the POS terminal, where all the individual components are integrated and the POS software is installed. It acts as the primary interface for the entire restaurant POS system and as an input source to record customer orders. Any smart device capable of supporting your desired POS software can be used as a POS terminal. For example, desktops, laptops, tablets, iPads, smartphones and dedicated POS terminal devices.

Consider how much space you have available, where you want to store the POS terminal, and whether you want the POS terminal to be mobile. For greater flexibility, it is advisable to use a mobile POS terminal as it can be taken to the tables, to the manager, and to the kitchen as needed. Make sure the POS terminal is durable and can withstand long use.

  • Kitchen Display

Kitchen displays are a common component of restaurant POS systems. When any order is placed, it needs to be quickly and accurately conveyed to the kitchen so that preparation can begin. There are multiple ways that orders can be passed back, including the old-style verbal communication, order tickets and kitchen displays. Although many restaurants continue to use order tickets, using a kitchen display is an excellent option and can be integrated with your POS system. A kitchen display monitor can be mounted on a counter or wall surface and display every order placed at the restaurant front-end.

Depending upon the size of the kitchen and the number of active orders at any given time, you can experiment with the number of kitchen displays and their size. Using a touchscreen monitor as a kitchen display is a great way to easily update orders directly. The interface of the kitchen display can be customised as needed, for example, showing different components in separate columns. In comparison to a physical order ticket, kitchen displays give more information and can support two-way communication. The kitchen display can also track statistics of orders placed, time taken for completing the orders and even personnel involved in the preparation.

  • Cash Drawer

Cash transactions are reducing in popularity but are still one of the basic payment formats, making cash drawers a necessary part of a restaurant POS system. Cash drawers come in different sizes and configurations with varying numbers of slots. Used for securely storing cash currency notes and coins, there are often additional media slots that can be used to store cheques and receipts.

The number of cash drawers you require and their size will depend upon your POS setup and frequency of cash transactions expected. Cash drawers are built to be sturdy, to safely keep all cash until needed. The cash drawer is connected with the POS terminal and is opened by selecting the cash option on the POS system.

  • Payment Processors

There are multiple payment methods available apart from standard cash transactions, such as debit/credit cards, digital wallets, apps and contactless payment modes. Based on the preferences of target customers in your region, it is advisable to have support for all popular payment modes. Accordingly, you may need additional POS hardware to process payments, for example, an Electronic Funds Transfer at Point of Sale (EFTPOS) device for card payments. POS software can be integrated with the EFTPOS to process card payments.

For other payment methods, consider the hardware requirements to support payments. POS software and smart devices can often directly accept digital payment wallets. EFTPOS devices can often be used to accept contactless payment formats and Tap and Go payments. In general, having a single device that can accept multiple payment formats is easier to manage than multiple separate devices. Choose a versatile EFTPOS device that is fast and can process multiple payment types to reduce the number of individual payment processors while offering plenty of options for customers.

  • Receipt Printer

A receipt printer is an integral part of any POS system as it provides customer and the business with details of the transaction that took place. In a self-service restaurant setting, the receipt may also be used to collect ordered food. Receipt printers are designed to be fast, reliable, accurate and efficient, while the printing quality is typically average and durability of the receipts is limited.

In a restaurant setting, receipt printers can also be used as order or ticket printers to convey orders to the kitchen due to their fast speed of printing. An order ticketing system can be used in place of kitchen display monitors, or in combination with them for larger kitchens and more complex orders. Receipt printers can be installed directly in the kitchen and orders printed from the POS system when they are placed. In contrast to kitchen displays, the order tickets can be taken around the kitchen as needed.

The two most commonly used types of receipt printers are thermal and impact receipt printers. Thermal receipt printers produce better quality receipts but are not suitable for warm environments. Impact or dot matrix receipt printers can produce multiple identical receipts at the same time and are great for restaurant use. They can be used internally for order ticketing or for receipt and order ticketing purposes. However, the printing quality of impact/dot matrix receipt printers is average.

  • Optional: Self Service Kiosk

Self service is a common model that helps reduce dependence on employees, and is gaining popularity in the food service industry as well. Apart from your standard counters or seated service you can also set up a self-service kiosk with a mobile POS system, payment support and a receipt printer. Customers can use the device screen to view the menu, place orders, make payments and use the receipt to collect their order from the counter. A self-service kiosk is not a necessity for a restaurant POS system and its usefulness will depend upon how tech-friendly your target customers are. However, for the right audiences, it can be an easy way to support extra orders, reduce pressure on employees, and reduce lines during peak hours.

Features of a Restaurant POS System

Identifying required POS hardware components is half the battle; it is even more important to find the right POS software. It is advisable to use dedicated restaurant POS software that comes with restaurant-specific features and can be adapted to suit your business. Here are some of the top features of restaurant POS system software:

  • Table Management

For a sit-down restaurant, table management is important, especially when there are large numbers of customers to avoid long lines and mismanagement of available space. POS systems offer table management and reservation features where you can map out your table layout and keep track of customers and reservations. This will help tell you instantly which tables are free, how many people can be seated, nearby free tables and even how long customers have been at a table.

With the reservation tools, you can offer advanced bookings and customers can make reservations for tables online or on phone call. The reservations are integrated with the table management and tables will automatically depict the current booking status. The restaurant POS system table management feature takes off the pressure from your employees and simplifies the seating process, allowing you to maximise space. Optimised table management enables you to give accurate estimates to customers, resulting in a more positive dining experience.

  • Order Management

At restaurants, orders have the potential of becoming complex when customers add changes to original menu items or if the menu supports a great deal of customisation. It can be a simple combination of different items but can also include substitutions and dietary requirement or preference-based changes. Restaurant orders need to be fast and accurate, and restaurant POS systems are a great way to ensure efficiency and provide customers with exactly what they want. A mobile POS system can replace traditional paper and pen and allow your employees to take orders directly from the customers’ tables with the mobile POS terminal.

Individual items can be stored as SKUs and changes can be incorporated wherever needed and confirmed with customers before final order is placed. In case any item is unavailable, you can inform the customers directly when they place the order. From the front end where the orders are placed, the POS system can directly transfer the orders to the kitchen for preparation. With a restaurant POS system, you don’t have to worry about losing track or falling behind on any order. Restaurant POS systems also support splitting payments and issuing separate bills for individual items in a single order.

  • Inventory Management and Tracking

Adequate management inventory is vital for the success of any business but the stakes are higher for restaurants as inventory is highly perishable. Raw materials and ingredients for food service businesses need to be accurately tracked, properly stored, and regularly ordered. A restaurant POS system is a brilliant tool for inventory management with features to monitor stocks, sales, raw materials and for setting up low stock notifications and placing orders. Proper inventory management will help you provide your customers with better items made from freshest ingredients, increase your reputation and prevent food poisoning.

The POS system can keep track of existing stock, expiration dates and sales, and you can setup benchmarks when the POS system should notify you that supplies are running low. Accurate and real-time tracking of inventory, particularly at the end of each day, helps you minimise wastage and shortages. A restaurant POS system can help you identify sales trends so that you can order stocks accordingly and prevent spoilage of perishable items. If there are any problems with the storage process or with a prepared item, you can trace the source supplier and fix any problems in the storage facility.

  • Employee Management

Employee management is common feature supported by POS systems and using a restaurant POS system for employee management is efficient and cost-effective. The restaurant POS system can keep track of all the employees, shifts, schedules, payroll calculation and give data-based details on individual employee performance. Whether it is the output of kitchen staff, waitstaff, cashiers, delivery persons or any type of employee, a well-integrated restaurant POS system can track the performance of all. For example, chefs who create memorable dishes, waitstaff that are great at selling specials, cashiers that can speedily handle lines of customers. Based on the employee performance, you can arrange further scheduling according to your peak hours.

By using your POS system for employee management, you can reduce pressure on human resources, reduce errors and avoid the need for manually entering daily details, such as attendance. A POS system also gives great protection against tampering with the employee records and access can be granted as desired. It can help you maintain a suitable schedule with full transparency so every employee knows their timings. Any requests for schedule changes can be submitted and approved through the POS system. If you have a unified tipping system in place, the POS system can help you keep track of tips for later disbursement.

  • Reporting & Analytics

Reporting and analytics are a standard feature and benefit of POS systems, as they provide a variety of reports with data on your business performance. This data can then be used to revise and improve business performance in a more effective manner. A restaurant POS system can provide reports on daily sales, hourly sales, best selling items, low demand items, top categories, requests made by customers and more. Sales reports can be used to adapt the menu, adjust inventory, re-schedule staff and plan new items to offer. For example, if a particular cuisine is doing well, you can add new items from that cuisine to the menu.

Analyses of past performance can be used to identify trends and forecast future sales. Based on sales patterns you can find out what your strengths and weaknesses are as a business and work to improve them. For example, maybe your restaurant is highly in demand amongst families and you want to increase your customer base amongst office-goers. A restaurant POS system can consolidate data from multiple sources and for multiple locations, helping you manage more than one sales channel and restaurant location. The reports can be customised as needed, and are useful to find out the response to any new item on the menu. With a centralised dashboard, you can easily view, access and utilise countless reports and metrics.

  • Customer Relationship Management

Maintaining and encouraging a positive relationship with customers is the secret to success for any restaurant. A restaurant POS system supports fast and accurate ordering with convenient payment methods, and also offers dedicated customer relationship management features. A regular customer base is a good source of steady revenue and happy customers are more likely to recommend your establishment to others. If you want to experiment with new items or deals, then trying out loyal customers is a great option for genuine feedback without risk of discouraging customers.

Similar to other businesses, restaurants can also support loyalty programs for frequent customers. At the competition of the order, a POS system can quickly create customer accounts and promote customer engagement. Loyalty levels can be setup based on different parameters such as frequency of visits, amount spent or items purchased. A variety of formats of loyalty programs can be used, for example point-based or with rewards, exclusive deals or other benefits. As restaurants tend to have repeat orders, make ordering faster for your regular customers by saving their favourite orders and payment methods.

  • Marketing Tools

Marketing is essential for any business to increase brand awareness, new customers, repeat customers and overall sales. A restaurant POS system can be immensely useful for marketing purposes in an easy and efficient manner. With the restaurant POS system marketing tools, you can manage online marketing through local SEO and reviews management. Many customers often look online first to search for restaurants to visit and SEO and online reviews improve your restaurant’s online visibility.

The sales and customer data collected from a restaurant POS system are a great foundation for overall marketing efforts. It can help you identify your best-selling items and key customer demographic for targeted marketing campaigns. Once you have launched a marketing campaign or promotions, the POS system can track its performance and results. Accordingly, future marketing campaigns can be adjusted for better results. For example, maybe buy one get one offers are more popular, or maybe a percentage discount has greater success in your region. With a restaurant POS system, you can significantly improve the success of marketing and also measure it accurately for future reference.

  • Support for Online/Telephone Orders

Over the years, the food service industry has evolved and so have the ways that customers interact with it. While customers directly visiting restaurants is still the standard, many customers prefer placing orders or booking reservations online or on call. Supporting online and telephonic orders and bookings is a great way to increase customer orders and also offer convenience and flexibility to customers. Online/telephonic bookings and orders give restaurants adequate time to prepare the order or reserve tables, making crowd management easier.

If you support online and phone orders, then a restaurant POS system is an excellent way to collate all the orders and bookings. Multiple sales channels can result in overbooking, long waiting periods and inefficient service. However, a unified and integrated restaurant POS system can keep track of every order, ensuring that there is inventory availability and preparations are not delayed. A restaurant POS system can also be integrated with food delivery apps, seamlessly incorporating delivery orders with the general restaurant operations. All the orders are tallied against the inventory so you can clearly mark any unavailable items, avoiding confusion or disappointment.

Conclusion

A POS system offers amazing potential for restaurants, cafes, bars, bakeries and other food service businesses, with dedicated restaurant-specific POS software available. In addition to completing transactions, restaurant POS software helps in table management, order management, tableside ordering/payments, inventory management, employee management, advanced reporting and more.

When choosing a restaurant POS system, consider your type of restaurant, business needs, budget and expected features. Although the POS software will influence the feature capabilities of a restaurant POS system, having the right POS hardware components is vital. Good quality POS hardware components will be long lasting and easy to use, giving you a better return for your investment.

At POS Sales, you can find an all-inclusive range of quality POS hardware, accessories and consumables to setup an ideal restaurant POS system. Whether you are setting up a new restaurant POS system, or are looking for additional components for an existing setup, you can find compatible POS hardware. Reach out to POS Sales today to find  POS solutions that are right for your business and suit your budget.