the history of the pos system in better business management

Last Updated On July 03, 2019 / Written By Ian Heinig

The History of the POS System in Better Business Management

Learn how the point-of-sale, or POS, system got its start and became the future of restaurant management software, and business management software in general. This article will provide background on POS technology and the benefits of implementation!

The History Behind the Use of the Modern POS System

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Hospitality moves at the pace of technology.

Created over 20 years ago, the first point of sale (POS) system allowed restaurants to process and record orders with incredible efficiency. As the technology evolved, the POS became the control center for every restaurant, an essential database of transactional data that we know today.

Today’s consumers expect their favorite restaurants to keep pace with their smartphones, affording them an immediate and engaging dining experience. Confirming this, 73% of people say that technology improves the dining experience.

To better satisfy and retain customers, restaurateurs are reaching for the next wave of innovation - restaurant management software.

The best restaurant POS software allows operators to tailor the dining experience, track key data, and optimize their operations to profit in the modern age.

This article outlines the history of the POS system, recent innovations to the POS system, and how a POS helps restaurants to succeed.

The History of the POS System From the 19th to the 20th Century

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The first POS system was the cash register, invented in 1879 by saloon-owner James Ritty of Ohio.

The cash register enabled users to record transactions without error, allowing for better bookkeeping and management of capital. Ultimately, Ritty sold his invention to the National Cash Register Corporation (NCR) in 1884.

At the start of the 20th century, the NRC added a cash drawer and a paper roll for receipts. By the mid-1900s, the cash register was a digital machine, equipped with an LCD screen, credit card magnetic strips, and thermal printing.

IBM introduced the first POS system for restaurants in 1973. As the first computer-based POS system, the electronic cash register (ECR) revolutionized the service industry. Waitstaff could now relay orders to the kitchen instantly via remote printing.

Meanwhile, diners received a clean and error-free receipt for their meal that included tax; this simplified the checkout process, but also helped operators to calculate how much money to keep in the register and how much to deposit in the bank after service.

Credit card processing, as we know it today, would come later. During the ECR era, it took at least 30 seconds to process a credit card, which caused delays at the counter, and so many restaurateurs hesitated to offer this service.

In 1986, Gene Mosher created the first graphic touchscreen interface for his deli in New York. Utilizing another recent invention - the internet - Mosher’s touchscreen POS system allowed him to fire and customize orders with just a few taps of his fingers. The speed and efficiency of service were greatly accelerated.

Microsoft capitalized on Mosher’s innovation in 1990 by releasing the first commercial POS client for restaurants. This software became the new standard for restaurateurs, functioning as both a financial database but also the driver of customer interactions.

The advent of the internet also enabled restaurants to process credit cards at a tolerable speed. Credit processing was an integrated feature of the POS system, as businesses could now create a comprehensive report of all transactions, whether check, cash, or credit.

POS systems now exist in various forms, through adoption is universal among restaurants.

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The Modern POS System Allows for Better Business Management

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Technology allows for increasingly expedient and rewarding dining experiences, leading customers to ask ever more from restaurants. To answer these demands, operators are reaching for cloud-based restaurant solutions to help them to enhance both the customer experience and their operational efficiencies.

According to SmallBizTrends, nearly every restaurant operator (95%) says that technology helps them to improve to increase efficiency. At the most basic level, this means that waitstaff can modify orders with ease, redeem loyalty points from a business’ loyalty program, and sell gift certificates.

Cloud-based restaurant software is most beneficial for managers, however, allowing total visibility and control of operators from any device. These systems provide a suite of features as well as actionable insights, helping to keep operations nimble, lean, and profitable.

Restaurant management software can be integrated with existing systems to deliver a variety of functionalities.

For example, these cloud-based business management apps can help you with-

  • Employee scheduling
  • Shift tracking and time enforcement
  • Team management checklists and task checklists
  • Food temperature and food safety monitoring
  • Inventory management
  • Automatic food ordering
  • Sales reporting and forecasting

The best restaurant POS systems allow savvy restaurant owners to monitor every aspect of their operation, tracking employee activity, driving revenue, and cutting costs in every area.

Unlike past POS systems, cloud-based POS solutions are easy to update and upgrade, requiring only a quick download to get up to speed.

The cloud has revamped the POS system, giving restaurants a toolbox for building and maintaining the best of restaurants.



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