pos system | 19 mins read

7 Essential Features a Great Restaurant POS System Must Possess

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Debdutta Bhattacharjee

By Debdutta Bhattacharjee

What is a POS System?

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Here's a familiar scenario . . . The cashier at a checkout counter scans the barcodes of the products you've selected. As the items are scanned, their prices are recorded in the computer system. At the same time, the inventory count for those product is automatically adjusted. The cashier checks for discounts you can avail, and calculates the final price on the computer. You proceed to pay in cash or with your debit/credit card. A card swiping machine processes your card, telling you the payment has been successful. A receipt is printed out. You walk out, the transaction complete.

This entire business management architecture you just witnessed makes up what is called the point of sale or POS system. POS systems also include QR codes displayed at the checkout counter. These can be scanned by customers themselves with their mobile phones, with payments made through mobile wallets like Google Pay or Apple Pay.

A POS system, broadly speaking, is a place where the sale and purchase of products and services take place. It may be located in a physical store, where terminals are used for payment processing, or it could be a virtual sales point like a computer or a tablet.

However, modern POS systems are much more than payment processors. These systems are the quintessential jack of all trades that also facilitate inventory management, sales monitoring, vendor ordering, reporting, analytics, employee management, customer relationship management, customer data management, customer support, customer service, purchase orders, stock transferring, quotation issuing, accounting, and so on. In short, POS systems help operators run the A-Z of a business.

POS systems emerged as part of retail, wholesale, and hospitality industries. Over time, their scope and applicability has expanded manifold. Today, they are ubiquitous across business types and sizes.

The POS system has become a mainstay of the restaurant sector too. And because the requirements of every restaurant type is differentthe needs and functions of a quick-service restaurant different from those of a full-servicePOS systems have come to be tailored to meet specific restaurant needs.

Parts of a POS System- Hardware and Software

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Every POS system is made up of hardware and software components. The hardware comprises physical assets like-

1. Interface- This may include a simple cash register for calculating and processing customer transactions. It could alternatively be an iPad POS system or a POS that works on an Android mobile device. The system could also be set up on a desktop, laptop, or touchscreen.

2. Card reader- This equipment allows customers to pay securely with the help of credit cards, debit cards, microchip cards (such as those from Europay, Mastercard, and Visa), magstripe cards, or mobile wallets like Apple Pay or Google Pay.

Card payments dispense with the need for customers to carry liquid cash, and make transactions convenient and quick.

The COVID pandemic has made contactless payments all the more important, with people fearing cross-contamination. Businesses, especially in the post-pandemic world, have no choice but to adjust to the demands of tech-savvy, cashless customers.

Mobile card readers are especially useful for small businesses. This is a POS that simply involves the coupling of a smartphone or tablet with an add-on card-reading device. These portable equipment let businesses process payments from anywhere. This would not have been possible were they forced to carry bulky machines to a client. Mobile card readers, therefore, help small businesses stay one step ahead of the competition.

3. Cash drawer- This is a crucial part of the POS architecture, even for businesses that largely deal in contactless payments. It helps in safely storing cash, cheques, coupons, receipts, slips, and so on. A software system linked to the cash drawer can track when the drawer is opened so that fraud can be easily detected.

4. Barcode scanner- It reads the details of a productlike name, category, manufacturer, price, and so onso that it can be recorded in the POS system. Barcode scans also automatically update a store's inventory list.

5. Receipt printer- It provides the customers with their payment details and is also used for end-of-the-day reports.

6. Network devices- These come in the form of modems, Wifi hubs, and so on, that provide internet connectivity to the devices on the premise.

POS hardware runs on software programs that allow sellers to input orders, calculate the price of products and services, and accept payments. POS software stores information within a broad database, processes it, and lets merchants, whether they are running a brick and mortar shop or an online store, manage the brass tacks of their business.

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Traditional Vs. Cloud-based POS Systems

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The software component essentially does the heavy lifting for POS systems, especially web-based ones. The smarter a software solution, the more efficient the POS system. The evolution of POS systems can be gauged by the extent to which they operate in the virtual space.

So while old school POS systems are maintained on-site, involve bulky machines, and run on a closed network that is accessed only by a limited number of connected devices, web-based systems have migrated to the cloud and offer a lot more advanced POS features. These cloud based POS systems can do without elaborate hardware support.

The cloud server syncs in real time with the main device and lets a user access information, and make product and pricing changes on the fly from anywhere in the world, using any device. Traditional POS systems, on the other hand, store data on local servers. This means managers have to physically access the dedicated POS equipment to make changes or review data.

Data in a web-based system stays secure in the cloud and can be easily retrieved even if a file is lost, damaged, accidentally deleted, or if the system crashes. This is a big advantage cloud based POS systems have over traditional ones. Cloud systems can process any amount of information without data distortion or loss.

A cloud-based system allows merchants to sync information between offline and online stores and allows seamless integration with new modules and third-party apps.

While gas stations and retail stores tend to use on-premise POS solutions, restaurants prefer cloud systems.

One needs to look no further than kitchen display systems (KDS) to see the benefits derived by foodservice businesses from web-based platforms. Cloud-based POS technology ensures that a KDS works remotely. A food order is no sooner fed into the system than it is displayed to the kitchen staff in the back office. They, on their part, can quickly start to prepare the order.

A KDS replaces the old paper tickets and kitchen printers, stamps out the chances of manual error, and saves staff considerable amount of time and energy. It's a real boon for businesses like quick-service restaurants, where time is at a premium.

Furthermore, a POS's menu management software helps restaurants create and manage menus. Simple POS terminals with QR codes or self-service menu interfaces may be used by diners to view menu items and place orders digitally, pushing paper menu cards towards extinction. QR codes can then be scanned from POS terminals placed on the dining table to pay for food.

Cloud-based POS solutions also tend to bring down upfront costs for businesses and help in tracking and processing bulky purchases.

The compactness and portability of web-based POS solutions have led to the integration of POS technology with mobile devices like smartphones and tablets, and mobile POS or EPOS systems have emerged.

7 Features Every Great POS System Must Have

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The best POS systems the foodservice industry uses possess the seven following features-

1. Speedy payments- After the customer selects a product, a sales representative scans it to record its price, taking into account taxes and discounts. This also updates the store's inventory count.

The customer then exercises one of the available optionsdebit/credit card, gift card, or cashto make the payment. The customer's bank authorizes the transaction, which seals the deal, and a receipt is printed as proof of the transaction. The entire process markedly reduces customers' wait time and makes their shopping experience hassle-free and satisfying.

Also, by quickly processing and accepting payments, with the help of mobile POS solutions for instance, merchants can woo fickle-minded customers and sell a product before they changes their mind.

So a robust POS system is a win-win for both, the buyer and seller. (Payment Card Industry Agreement make sure that the debit/credit card details of the customers are protected.)

2. Solid inventory management- Manual inventory tracking methods may often end up overestimating or underestimating stocks. However, POS systems allow merchants to manage inventory levels more efficiently and in an error-free way.

When stocks are received, they are simply scanned and their quantities recorded in the POS system. As stocks start getting sold, the POS system keeps updating the inventory list. Merchants are alerted when stocks begin to deplete. A POS solution may also be integrated with security systems to catch potential theft.

3. Advanced reporting and analytics- POS systems doesn't just facilitate payments, they provide detailed and automatic reports on a range of issues related to the business. It tells them for example, which items are selling well and which are sitting unsold on the shelves; customer contacts; purchase trends; and prices.

These AI-generated reports are accurate, concise, and easy to decipher. Moreover, being cloud-based, they can be accessed 24X7 from anywhere in the world, on any device with an internet connection. These reports give management the confidence to make better forecasts and take stronger decisions for the business.

4. Strong customer management- 80% of the revenue of a business is driven by 20% of its customers.

A POS system records customer information and helps business owners clearly identify their most loyal customers. These customers can then be incentivized in the form of loyalty programs. This can also build repeat orders from one-off customers.

Effective customer management also involves targeted promotions through email marketing, phone messages, and social media marketing. Customers are keener to publicize and build the brand value of businesses on social media or through word-of-mouth channels, that have personalized communication with them.

Customer loyalty can also be built by notifying customers when an item is back in stock, by providing the option of online ordering, o by cross-selling related products. The best POS systems can be easily integrated with third-party apps.

5. Complete employee management- POS systems provide a wealth of data related to employees. This includes sales per employee, hours worked, sales per time slot, the best and worst performers, peak hours in the store, and so on.

A POS may also function as an employee time clock. Employee data available on a POS system allows managers to prepare better schedules, optimize employee time on the floor and provide more effective training.

6. Organized and simplified operation- A top-notch POS system can scale down the number of operations and make functioning of a business easier, more manageable, and with little expense of time and effort. The way kitchen display systems accomplish this has been discussed earlier.

Moreover, since all elements of the business, like revenue, stocks, customers, suppliers, and so on, are maintained within the same software, operations are better organized.

Furthermore, stores/franchises spread across multiple locations can be managed from a single command center. With different stores receiving the same information, chances of miscommunication are greatly reduced. Consequently, productivity and hence, profits increase.

7. Reduced operating costs- A Intuit Market Research finding says that retail stores reporting revenues of $300,000 can reduce operating costs by 10%, by using a POS system. The business, therefore, can save $30,000 a year. This naturally means more income in the pocket, which can then be redistributed to other pressing needs of the business.

5 Great POS Systems for the Modern Restaurant

There are a plethora of restaurant pos systems in the market. However, those in the top bracket possess most, if not all, of the features outlined in the preceding section. Here's a list of the top 5 restaurant pos systems-

1. Plum POS- This offering from Hubworks is one of the best restaurant POS software solutions in the market.
Plum POS offers solutions for small and mid-sized restaurants, food trucks, kiosks, ghost kitchens, and can also be custom configured to suit large restaurants.

The bouquet of features offered by the Hubworks POS system includes easy inventory management, real time reporting, and analytics. It also helps create effective loyalty programs and manages online purchase orders and delivery. The system offers a POS app, mobile POS, KDS, self service kiosk, digital signage, and other key equipment.

The Plum POS solution provided by Hubworks can be set up in minutes and easily operated. What's more, it dispenses with multiple systems and logins.

2. Square POS- This iPad POS is used mainly for small operations. Square POS stands apart from the competition because of its cost and the fact that it involves no long-term contracts. It is very easy to install, requiring nothing but an iPad and a card reader. One just needs to create a Square account, link a bank account to it, and download the POS app from the Apple App Store to get going.

Square POS can be operated from an unlimited number of devices and can communicate through a Wifi network that has a speed of 25 megabytes per second. Mobile hot spots or LTE-enabled mobile routers can help to access fast internet connections as well.

A pocket-sized device called Square Terminal allows a small business owner to process payments and print receipts from the palm of their hands. It can also process simple orders. The integrated Square Invoices tool, the free Square Online Store, and the Email Marketing and Text Marketing tools can beef up a business considerably.

3. Shopify POS- It is a POS system that runs on the iPhone and iPad, and is offered by the e-commerce platform Shopify. Shopify allows an entrepreneur to manage their entire online and physical business from a single, unified platform. This POS system comes with a receipt printer, cash drawers, barcode scanner, and Shopify's proprietary card reader, powered by Swipe. The Shopify solution allows the use of external hardware systems as long as they are Shopify-compatible.

4. Toast POS- Toast provides a hybrid POS solution devised exclusively for the restaurant industry. Toast restaurant pos software uses industry-grade touchscreen tablets and handheld devices. Its hardware is Ingress Protection (IP)-rated to survive drops, heat, and water penetration. These features make Toast POS best suited for eateries that witness hectic action, where equipment runs the risk of damage.

Toast supports businesses of all sizes. Smaller ones can make use of its Pay-as-You-Go subscription that charges no software fees and provides up to two terminals at no upfront cost. As the business grows, tools can be added and the business can transition to a higher subscription tier. Pay-as-You-Go users can add marketing and loyalty tools for a fee.

5. TouchBistro POS- It is well-suited to the demands of restaurants and needs only an iPad to function. The features of TouchBistro include table and menu management, integrated payment processing, cloud-based reporting, and analytics, inventory management, and unlimited logins for restaurant management and staff. Add-ons include self-serve kiosks, KDS, customer-facing displays, and digital menu boards. It has a strong customer support center.

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How Much do POS Systems Cost?

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POS systems have a huge potential to propel a business forward, but one should be mindful of their cost. A small business, especially, cannot afford to overpay or pay for features it does not use or hardly uses.

The best thing to do, therefore, before going POS-shopping is to consider what is 'essential', 'nice-to-have' and 'unnecessary'.

The costs of on-site and cloud based POS systems are distinctly different. The former may cost as much as $3,000-$50,000 annually, while the latter is much cheaper, and may cost $600-1,200 annually. Cloud systems may require a one-time installation fee of $1,000-1,500, but their total costs would still be far less than traditional POS systems.

In some cases, POS hardware is proprietary. This means it is licensed from the same software company and a user has to buy the hardware from the same POS software vendor.

One also has to factor in maintenance fees for bulky on-site machines, and the cost of software updates. The minimal hardware required by cloud based systems, however, are usually generic, cheaper and be easily purchased on Amazon or Best Buy.

The price of POS systems may vary depending on the size of the business and the quality and number of features selected. Add-ons and third party integrations, like accounting software, loyalty programs, premium customer support, eCommerce shopping cart, and so on, would push the final cost up.

Pos software may involve subscription fees ranging from $50-$150 per month for single register locations, and $150-$300 per month for larger businesses.

Upfront payments can run a minimum of $1,000 a year. Some vendors levy a charge every time an item is sold using its software. This can range from 0.5% to 3% per transaction. An individual software license may cost an organization $1,200 to $2,500.

Apart from these, card readers can cost anything between $25-1,000, barcode scanners between $200-$2,500, and receipt printers between $20 and a few hundred dollars.

A business also has to factor in 2-3% payment processing fees every time a customer uses a credit card to make a payment.

Now, it is possible for a small business to get going with a payment of just $50-250 a month. It can do this by addressing only its most vital needs and keeping its POS system lean. But bigger enterprises that opt for a 'premium' experience may have to shell out more than $10,000 a year.

Better the POS system, Higher the Profits

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Quality POS systems may be costly, but they go a long way in delivering profits. The right POS systems enable entrepreneurs to keep track of pricing, sales patterns and buying trends, inventory changes, and revenue.

This way businesses can identify possible discrepancies in pricing or cash flow that could dent profits. It also helps businesses adapt their marketing strategies to suit consumer behavior and avoid customer service issues like products going out of stock. An efficient inventory management software comes in handy here.

A strong POS system ensures that payments can be processed easily, and customers do not have to wait too long. Online ordering is even more convenient. A satisfied customer is a regular customer, and targeting such a customer would help a business earn more. The best POS system, therefore, is one that supports the creation of a solid loyalty program and other aspects of customer relationship management. The portability of POS devices and the speed of payment processing enable businesses to capitalize on every opportunity to make money.

The top POS systems also boost worker efficiency by automating several processes, junking unnecessary processes, and by generally making business operations leaner. Therefore, employees who do not have to spend time and effort on manually counting, matching, and recording stocks can devote their attention to more important tasks, like addressing customer issues.

A POS system eases schedule-making by providing data on employee performance, and serving as employee time clocks. Data generated by POS systems can help businesses plan ways to reduce labor costs, which make up a substantial part of their expenses.

POS features like a shopper-friendly return and refund system, digital signage, bulk upload of stocks, and so on, enable businesses to stay competitive and profitable. With detailed reports that can be accessed in real time, a manager knows exactly how the business is faring and what changes need to be made to hold on to profits, and possibly even better them.

Therefore, businesses that can afford to pay would do well to adopt full-fledged POS systems and unlock the immense potential of these platforms. Those that do not use POS systems, on the other hand, are guaranteed to lose out on sales. A POS system helps an organization grow, and this would eventually compensate for the cost of the system itself.

POS System FAQs

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1. Are POS systems just useful for a few kinds of restaurants?

No. A modern POS system can benefit all kinds of restaurants. Whether you run a food truck, a coffee shop, or a fine dining establishment, a POS system that is connected with software solutions that provide employee management, inventory management, online ordering and delivery, and so on can help you serve your customers better.

2. Is it necessary to have an industry-specific POS system?

No. Many industry-specific software packages don't possess all the features of a general retail software package. So a POS system has to be chosen by factoring in the requirements of the business.

3. Would the POS terminal be able to process a sale if the server stops running?

POS software with a built-in offline mode will continue to function even if there is a server interruption. When the connection is re-established, offline transaction data can be uploaded to the system, so that it can be used to create reports later.

4. Can data on a current pos be shifted to a new pos software system?

It is possible to shift the data to the new POS system if the current software allows the export of customer and inventory details. However, each case has to be analyzed individually.

5. Can pos software be operated from a home computer?

Yes it can.

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