Small Business Guide to a Restaurant Management System

What is a restaurant management system?

A restaurant management system is a type of point-of-sale (POS) software specifically designed for restaurants, bars, food trucks, and other businesses in the food-service industry. Beyond what the best POS systems offer, RMS encompasses all back-end needs, such as inventory and staff management. The systems also handle payment processing (including restaurant mobile payments), order management, and other tasks that staff would typically perform.

“An RMS is like the digital backbone of restaurant operations,” said Jayanti Katariya, CEO of Moon Technolabs. “It consolidates tasks like order tracking, inventory control, and even analytics into one system, which saves time and reduces errors.”

What is the difference between an RMS and a standard POS system?

Both systems are classified as POS, but an RMS offers features unique to the food-service industry, such as ingredient-level inventory updates, the ability for waitstaff to send orders directly from the table to the kitchen, split billing, and kitchen displays. 

Spencer Michiel, a restaurant technology advisor at Back of House, pointed out that RMS is a group of services, whereas a POS system is one discrete business service. 

“A restaurant management system is an integrated group of software and hardware solutions, often referred to as a tech stack, that helps manage and optimize a restaurant’s operations,” Michiel said. “These systems bring together tools for managing essential functions, such as sales, inventory, staffing, and food costs, creating a seamless flow of information.”

What are the benefits of an RMS?

An RMS offers more features than a standard POS system. Restaurants can perform these tasks with an RMS:

• Track sales and orders
• View accurate, real-time financial statements
• Manage staff scheduling
• Access data through the cloud
• Utilize a built-in customer relationship management (CRM) tool to build mailing lists or start a rewards program

“An RMS is much more than just digital ordering,” said Deepak Shukla, CEO of Pearl Lemon Group. “It’s a comprehensive tool designed to streamline every aspect of restaurant operations. … This versatility allows restaurant owners to enhance service quality, minimize waste, and make data-driven decisions to optimize daily operations.”

What types of RMS are available?

Because every restaurant has unique needs, there are different RMS types from which to choose. To determine which type best suits your restaurant or bar, think of the features your restaurant could use and how important each of those features is to you.

1. End-to-end

This is the most robust and comprehensive type of RMS. The main features include core POS; inventory control; CRM; staff, menu, order, and payment management; technical support; and reporting and analytics. Depending on the RMS vendor, you may be able to mix and match features.

2. POS

The POS is the core of the system and allows you to integrate it with third-party systems for inventory, accounting, marketing, and other key functions.

3. iPad or Android only

Most systems are designed to run on only one device type to maintain the integrity of the system. Determine which operating system you will use in your restaurant before choosing a system.

4. General POS

This system is designed for businesses that have both retail and food service available. It offers seamless crossover with add-on modules.

What can I manage with an RMS?

You can manage almost every pertinent aspect of your restaurant, depending on which type of RMS you choose. With an end-to-end system, you will have complete access to these functions and features: 

• Employee schedules, including daily, vacation, and sick time
• Payroll
• Financial statements
• Inventory
• Accounting
• Reporting and analytics
• Core POS
• CRM
• Menu
• Reservations

“An RMS is designed to work cooperatively across multiple functions to manage all the key aspects of restaurant operations,” Michiel said.

What should I consider before getting an RMS?

Because your RMS will be responsible for many of your day-to-day processes, it’s important to find one that works well for you and gives you exactly what your restaurant needs. Start by determining a clear purpose you need the system to serve and a list of necessary features. Next, give serious consideration to the following aspects.

Type

Determine what type of system you need. If you’re going to run your business on Android devices, do not get an iPad system. If you want a one-stop shop, an end-to-end system will likely be the most cost-effective option. 

Scaling

If you have plans to grow or franchise your restaurant, buy a system that can grow with it. Make sure your system can handle an increase in the number of terminals and handheld devices. Confirm that it provides advanced large-scale analytics, offers multibranch add-ons, and supports a large number of employees (and their schedules).

Integration

No system is perfect, so you will most likely have to integrate your RMS with other software apps to achieve everything you need. You should make sure your RMS integrates easily with other systems, such as OpenTable or Resy for reservations, so you don’t waste time repetitively entering data into separate programs.

Katariya recommended checking for integrations with other types of software as well. “Ensure the RMS integrates well with any existing tools, like POS or payroll software, so it can grow as your restaurant expands,” he said.

Ease of use

Running a restaurant is tough as it is, so you don’t want to waste time troubleshooting your RMS in the middle of a dinner rush. Spend a good deal of time testing the RMS, ensuring that it is intuitive and problems are easy to fix.

Restaurant management system pricing

The price of your restaurant management system will depend on how complex it is, as well as how many locations you’ll be managing with it. 

Shukla said RMS systems range from $50 to $500 per month “depending on the system’s capabilities and the level of customization needed.” Michiel said RMS systems cost at least $1,000 per month for high-end enterprise solutions and noted that “the cost of a restaurant management system can vary widely depending on the size, complexity, and needs of the business.” 

In many cases, integrated hardware, such as registers or tablets, will also increase your upfront costs. Your payment schedule may also depend on whether your RMS software offers perpetual or subscription licensing. Perpetual licensing requires you to pay a large sum upfront to own the license indefinitely. Your monthly or yearly costs will be lower, but your initial investment will be much higher. In contrast, subscription licensing requires a smaller monthly or annual fee. Upfront payments are lower, but you’ll pay more in recurring fees. 

Over time, both perpetual and subscription pricing options typically even out. Discuss vendors’ pricing structures with them, keeping in mind your bar or restaurant’s budget and needs.

Features to look for in restaurant management systems

When determining which restaurant management system to use, look for these five useful features. 

1. Sales and tax tracking

Your RMS should track all sales data, such as your top menu items, busiest selling times, best-performing team members, and profits, to help you make important business decisions. Your software should also provide detailed records for tax reporting purposes.

>> Learn More: How to Increase Your Restaurant’s Profits

2. Order management

Your restaurant staff should be able to manage tables, reservations, checks, and menu items easily through your RMS. You and your managers should also be able to control refunds, voids, and comps, and view order statuses. If you operate a bar, your RMS should allow you to preauthorize credit cards to open tabs. 

Order management provides a seamless experience for both customers and staff, eliminating the risk of human error and ensuring all information is in one place.

3. Inventory management

Knowing exactly how much product you have on hand will help you determine when and how much to reorder from your vendors. Some RMS software offers inventory management options, while others may require integration with third-party software to help you with this.

4. Reporting and customer data

If your chosen RMS tracks and filters your sales and customer data, you’ll have access to a wealth of information to help you grow your business and make better marketing decisions. Understanding your customers will help you better target them through advertising and personalizing their dining experiences. For instance, you can send gift cards or credits for free meals on their birthdays or other special occasions. 

5. Marketing, gift cards, and rewards programs

Consider a system that offers marketing tools, such as promotions and loyalty or rewards programs. Your RMS may have native marketing tools or require third-party software integration for this. If you’re interested in offering gift cards for your restaurant, make sure your RMS can help you manage that. 

From the front doors to the back of the house

A good restaurant management system makes all the difference in how well your restaurant runs. There are many factors to consider, but it is worth taking the time to determine exactly how the system must serve your business and what you want to gain from it. When you have a clear goal in mind and a list of non-negotiable features, you’re well on your way to getting up and running with a restaurant management system. 

Max Freedman and Sean Peek contributed to the reporting and writing in this article.