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What Is a POS System in a Restaurant? (How to Choose One)


Once a humble cash register, the POS system has transformed into a multifaceted digital strategy at the heart of modern restaurant operations. It is not merely a transactional tool anymore but a critical component in the orchestration of seamless dining experiences. But what exactly is a restaurant POS system? And with the myriad options available today, how can a restaurant owner or manager choose the right one?

In this article, we delve deep into the world of POS systems, demystifying its role in the restaurant business and offering a guide to selecting the one that aligns perfectly with your establishment’s unique needs and goals. Whether you’re launching your first café or seeking to upgrade your chain of restaurants, understanding the POS system will prove invaluable. So, sit back, and let’s embark on this illuminating journey.

What is a POS System in a Restaurant?

An example of a restaurant POS system

A restaurant Point Of Sale (POS) system is a crucial tool used in the hospitality industry to manage the sale of goods and services. Most restaurant POS systems combine software and hardware to facilitate transactions and simplify operational processes.

Key functionalities of a restaurant POS system often include:

  1. Inventory Management: It can track ingredients and other inventory to prevent shortages and ensure the restaurant is stocked with everything it needs.
  2. Order Management: It can handle customer orders, process payments, and print receipts. In some cases, it also facilitates online orders or orders made through apps.
  3. Employee Management: It can track employee hours, manage shift changes, and in some cases, even handle payroll.
  4. Customer Management: Most POS systems have a restaurant CRM (Customer Relationship Management system) component to track customer preferences, purchase history, and personal information.
  5. Reporting: It generates restaurant analytics from sales, revenue, employee performance, popular items, etc., helping the management make data-driven decisions.
  6. Reservation Management: Some systems also manage table reservations and restaurant operations.
  7. Integration: Many restaurant POS systems have integrations with other software used in the restaurant, such as accounting systems, marketing tools, or online delivery platforms. Make sure to integrate your POS system with online ordering. That way you can have everything well-organized and in one place.
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How Does a POS System in a Restaurant Work?

Modern restaurant POS systems can also include built-in sale systems to track sales

Restaurant Point Of Sale (POS) systems work by centralizing restaurant operations into one platform. Here is a general step-by-step process to understand how they work:

  • Order Taking: When a customer places an order, a staff member inputs the order into the POS system. This could be done on a touchscreen display, a computer, or a handheld device. Many POS systems can split orders, add special instructions, or customize the order based on the customer’s request.
  • Order Transmission: The POS system then sends the order to the appropriate station (like the kitchen or the bar) for preparation. The order might be displayed on a screen or printed on a ticket.
  • Sales Tracking: Every order entered into the system is recorded. This allows for real-time tracking of what has been sold, how much revenue has been generated, and what ingredients have been used. This is crucial for inventory management and financial analysis.
  • Payment Processing: The POS system can process the payment once the customer is ready to pay. This usually involves calculating the total cost, including tax and tip, and then accepting payment in various forms (cash, credit card, mobile fees, etc.). It will then print or email a receipt to the customer.
  • Reporting: The system can generate a wide range of reports based on the data it collects. This might include sales, inventory, and employee performance reports. This is crucial for making informed business decisions.

What Restaurants Need a POS System?

Modern pos systems are ideal for almost any restaurant business

Regardless of size or service style, most restaurants can significantly benefit from a Point Of Sale (POS) system. However, the particular features that will be most beneficial can vary depending on the type and size of the restaurant.

Fast Food Restaurants

 An example of restaurant POS stands in a fast food restaurant

These establishments need to process orders and accept payments quickly, manage drive-through services, and keep up with high volumes of customers. A POS system can also significantly streamline these processes:

  • Speeding up Transactions: Fast food restaurants are high-volume businesses that need to serve customers quickly. A POS system can speed up order-taking and payment processing, which increases efficiency and customer satisfaction.
  • Streamlining Kitchen Operations: With a POS system, when an order is entered, it’s immediately sent to the kitchen. This eliminates the need for servers to deliver orders to the kitchen physically, speeding up the cooking process and reducing errors.
  • Managing Inventory: Fast food restaurants need to track a lot of ingredients to ensure they stay supplied during busy periods. A POS system can automatically track inventory levels and even place orders when stocks are low.
  • Drive-thru Management: POS systems can help manage drive-thru orders, keeping them separate from in-restaurant charges and ensuring they’re fulfilled efficiently.
  • Online and Mobile Ordering Integration: Many people prefer ordering fast food online or through a mobile app. A POS system can integrate these orders into the workflow, making it easier to manage them.

Fine Dining Restaurants

Finding the right PSO system is essential to properly run a restaurant

In fine dining restaurants, modern POS systems can help manage complex orders, keep track of tables, process payments, and manage reservations. More advanced POS systems can show which tables are occupied, which are reserved, and how long guests have been dining. Additionally, POS software can help with:

  • Wine and Pairing Management: Some advanced POS systems allow you to keep a digital wine list and can suggest pairings with certain dishes. This can enhance the guest experience and drive up average check size.
  • Splitting Checks: In fine dining scenarios, guests often want to split the bill in different ways. A good POS system can easily manage this, ensuring a smooth payment process that doesn’t disrupt the dining experience.
  • Improved Customer Service: A modern restaurant POS system can enhance the personalized service that defines fine dining by remembering customer preferences. For example, you can note a customer’s favorite table or dish, or any allergies they have.
  • Inventory Management: Fine dining restaurants often stock high-end, expensive ingredients. A POS system can track these accurately, helping to minimize food waste and manage costs.
  • Reporting and Analytics: A POS system can provide insights into sales and pos data, popular dishes, peak hours, and more. This data can help inform menu development, pricing strategies, staffing decisions, and other key aspects of running a fine dining restaurant.

Casual Dining and Family Restaurants

 Restaurant software can help to significantly streamline daily operations in a restaurant

Casual dining and family restaurants can use POS systems to manage orders, track inventory, process payments, and even provide entertainment options at the tables through customer-facing interfaces. Additionally, restaurant POS software can help with tasks such as:

  • Split Bills: A common requirement in casual dining and family restaurants is splitting bills among patrons. POS systems can handle this easily, dividing the bill as guests request.
  • Inventory Management: POS systems with a built-in inventory management system can track the stock levels of ingredients in real-time, helping to prevent running out of necessary items during service and enabling more accurate forecasting and ordering.
  • Loyalty Program and Promotions: POS systems often have built-in capabilities for managing customer loyalty programs and promotions, helping to encourage repeat business and drive revenue.
  • Menu Management: With a restaurant POS provider, changing and updating the menu becomes much more straightforward. It can also help track the popularity of different items, informing decisions about what to keep, what to change, and what to promote.
  • Reporting and Analytics: POS systems can track and analyze a wealth of data, providing insights into sales trends, busy periods, customer behavior, and more. This data can inform various business decisions, from staffing levels to menu design.

Cafés and Bakeries

:Choosing the right pos system for cafes and bakeries can help collect customer data, generate sales reports, and process payments with ease

Cafés and bakeries can use a point of sale system to handle take-out and sit-down orders, manage inventory (especially important due to the short shelf-life of their products), and handle customer loyalty programs. A modern POS system can also help with other day-to-day tasks, such as:

  • Fast and Efficient Transactions: Cafés and bakeries often have a high turnover rate, and a POS system can ensure transactions are conducted quickly and accurately. This helps reduce long lines and improves customer satisfaction.
  • Inventory Management: Cafés and bakeries deal with perishable goods and must closely monitor their stock levels. A POS system can track inventory in real-time, allowing for better control over waste and ensuring popular items are always available.
  • Product Variants and Modifiers: Many cafés and bakeries offer a wide variety of options for their products (different types of milk, added flavors, etc.). A POS system can easily handle these variants and modifiers, ensuring the order is accurate, and the customer gets exactly what they want.
  • Loyalty Programs: POS systems often include functionality for restaurant loyalty programs, which can encourage repeat business. For example, a customer could earn points for every purchase, which they could redeem for a free coffee or pastry.

Bars and Pubs

Advanced pos features can improve customer experience at bars and pubs

Although bars and pubs are on the fringe of the restaurant industry, they still rely on a restaurant POS to help manage several tasks, including customer tabs, control inventory (especially important with alcohol), and handle complex orders. 

Bars and pubs are not considered full-service restaurants, but many of their inner workings are the same. And here’s how a restaurant POS can help these businesses run more smoothly:

  • Reporting and Analytics: By analyzing sales data, you can determine which drinks are most popular, which times are busiest, and more. This information can help with staffing decisions, inventory management, and promotional strategies.
  • Inventory Management: Bars and pubs must track their inventory, especially for their most popular drinks. A POS system can monitor stock levels in real-time, alerting when it’s time to reorder and helping to avoid running out of critical supplies.
  • Menu Management: A POS system makes it easy to update menus and prices. This is particularly beneficial if you have daily specials or rotating craft beers.
  • Age Verification: Some POS systems can prompt staff to check ID before processing certain sales, ensuring compliance with legal age restrictions for alcohol sales.

Food Trucks

 Instead of POS terminals, food trucks often utilize mobile pos solutions instead

Although food trucks don’t often have dining areas or large kitchens, they still utilize tools such as restaurant management software or a kitchen display system. They can even benefit from a cloud-based POS system to take orders, process payments, and manage inventory. Most food truck owners have a pos software provider for: 

  • Inventory Management: Food trucks have limited storage space, making efficient inventory management crucial. A POS system can track what’s in stock in real-time, helping to prevent shortages or overstocking.
  • Card and Mobile Payments: Carrying cash is becoming less common, so accepting card and mobile payments is essential for maximizing sales. A POS system can get various payment methods, making customer transactions convenient.
  • Sales Reporting and Analytics: A POS system can track sales data, providing insights into peak hours, popular menu items, and overall business performance. This information can help food truck owners decide when and where to operate, what to serve, and how to price their items.
  • Online and Mobile Ordering: Some POS systems can integrate with online ordering platforms or even allow customers to order directly from their smartphones. This can be a significant advantage at busy events where customers may want to arrive quickly.

How to Choose the Right Restaurant POS System

Choosing the right restaurant Point of Sale (POS) system is crucial for the smooth operation of your business. Here are some key factors to consider:

  1. Your Business Needs: The type of restaurant you run will largely dictate what features you need in a POS system. For instance, a food truck or a small café might require a mobile pos. In contrast, a hefty fine dining restaurant might need a robust system with table management and reservation capabilities.
  2. Ease of Use: The POS system should be user-friendly and intuitive. Your staff should be able to learn how to use it quickly to prevent any disruption to your business operations.
  3. Functionality: Essential functions include order management, payment processing, inventory management capabilities, and sales tracking. Additional tools, such as a customer relationship management system, employee management, and integration with other software (like accounting or delivery platforms) or hardware (self service kiosks, pos terminal).
  4. Reliability and Support: Your POS system will be central to your operations, so it needs to be reliable. Check out reviews and ask for references to understand the system’s reliability. Additionally, find out what kind of customer support is available. You should have access to 24/7 support.
  5. Price: Pricing for POS systems can vary significantly. Be sure to understand exactly what you’re paying for. Consider both the upfront and ongoing costs like monthly fees, transaction fees, and the cost of hardware or updates.
  6. Integration: Your POS system should be able to integrate with other software that you use in your restaurant, like accounting software, email marketing tools, or online ordering platforms. This will allow for smoother operations and more comprehensive data

Key Takeaways

  • Key functionalities often include sales recording, order management, inventory management, restaurant management system, employee management, customer database, and generating various reports.
  • A POS system streamlines the operation of a restaurant by taking orders, transmitting them to the kitchen, tracking sales, processing payments, and generating reports for better decision-making. 
  • Most restaurants, from fast food joints to fine dining establishments and even food trucks and catering services, can benefit from a POS system. 
  • Important considerations when choosing a POS system include understanding your business needs, checking the ease of use, ensuring necessary functionality, evaluating reliability and support, considering the price, checking compatibility with existing hardware, and thinking about scalability for future growth.

Frequently Asked Questions (FAQ)

Each of these systems has different strengths and weaknesses, and the best choice for a specific restaurant will depend on the particular needs and circumstances of that restaurant. 

  1. Square for Restaurants: Square for Restaurants is a POS solution that offers order management, payment processing, and a suite of other features designed to streamline restaurant operations. It is known for its user-friendly interface and flexibility.
  2. TouchBistro: TouchBistro is an iPad-based POS system designed for restaurants, cafes, bars, and more. It offers tableside ordering, menu management, reporting and analytics, employee management, and inventory tracking.
  3. Clover: Clover is a customizable POS system that restaurants can tailor to their needs. It offers payment processing, inventory management, and employee management.
  4. Upserve: Upserve (formerly known as Breadcrumb) is a POS system offering an impressive range of features like table management, menu customization, online ordering, inventory management, and employee management. It also provides comprehensive analytics to help restaurant owners make data-driven decisions.

A Point of Sale (POS) system is crucial for restaurant operations for several reasons:

  • Efficiency: A POS system improves the speed and efficiency of restaurant operations. It streamlines order processing, inventory management, and financial transactions, reducing the time required for these tasks and minimizing the risk of errors.
  • Data Analysis and Reporting: POS systems can track and analyze a wide range of data, from sales figures and inventory levels to employee performance. This can provide valuable insights that help make data-driven business decisions.
  • Inventory Management: POS systems help track the use of ingredients in real-time, allowing restaurants to manage their inventory better. This reduces waste, saves money, and ensures the restaurant is always stocked with the necessary ingredients.
  • Improved Customer Service: With features like faster checkout, order accuracy, and the ability to recall past orders, a POS system can significantly enhance the dining experience for customers.
  • Order Accuracy: With a POS system, orders are directly sent to the kitchen from the server’s device, reducing communication errors and increasing order accuracy.

While POS systems can significantly enhance the efficiency and management of a business, they are with potential drawbacks. Here are a few possible disadvantages:

  • Cost: POS systems can be expensive. There’s the initial investment in hardware and software, plus ongoing expenses for software licenses, updates, and technical support. For small businesses with limited budgets, these costs can be prohibitive.
  • Technical Issues: Like all technology, POS systems can experience glitches, crashes, or other technical problems. If the system goes down, it can cause severe disruption to your business. Ensuring you have reliable technical support and a backup plan is crucial.
  • Training: Staff needs to be trained to use a POS system effectively. This can require time and resources, particularly if you have a high employee turnover rate.
  • Data Security: POS systems often store sensitive data, including credit card information and other customer details. This makes them a potential target for hackers. It’s crucial to ensure your POS system has robust security measures to protect this data.
  • Integration: If you’re already using other software for accounting, inventory management, or employee scheduling, you’ll want a POS system that integrates smoothly with these. If it doesn’t, you could have to manually transfer data between systems, which is time-consuming and increases the risk of errors.

A typical Point of Sale (POS) system consists of hardware and software components, each playing a crucial role in the system’s overall functioning. The six central components are:

  1. Terminal: This is often a desktop computer, tablet, or other mobile device where the POS software runs. It’s the primary device to input orders, process payments, and interact with the system.
  2. Cash Drawer: A secure place to store cash is needed for businesses accepting cash payments. The cash drawer is electronically connected to the POS system and automatically opens when a cash transaction occurs.
  3. Receipt Printer: Many businesses are moving towards electronic receipts, but many customers still expect a physical receipt. Receipt printers are connected to the POS system to print customer receipts after a transaction.
  4. Barcode Scanner: A barcode scanner is a crucial part of the POS system for retail businesses or restaurants with barcoded items. It allows for quick and accurate product identification and price lookup.
  5. Card Reader: Also known as a credit card terminal, this device allows businesses to accept debit and credit card payments. Many modern card readers also accept mobile payments.
  6. POS Software: This is the heart of a POS system. The software allows for managing transactions, inventory, reports, and customer data. It can be cloud-based or locally installed, typically designed for specific business types like retail or restaurants.
Juliusz Dzierlatka

Juliusz Dzierlatka

Digital content creator with +7 years experience in marketing, helping restaurants streamline daily operations.

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