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10 Reasons Your Restaurant Needs Modern POS Software

Donna Fuscaldo
Donna Fuscaldo
Senior Finance Writer

Learn how a new POS system can help your restaurant manage orders, inventory, staff and a host of other back-office tasks.

The secret to making any restaurant operation successful is active management. Monitoring employee performance, offering top-notch customer service and keeping an accurate inventory are all vital steps toward ensuring that your restaurant runs smoothly and turns a profit. However, it's challenging to keep track of all this information on your own, in addition to establishing a protocol for ringing up customers, tracking sales and inventory, and so on. This is where the benefits of POS systems come into play.


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With most things you purchase in life, you have various options in color, shape, model and features. A point-of-sale (POS) system is no different. There is an extensive range of point-of-sale providers in the market all with different offerings aimed at different ends of the market, from large restaurants to small cafes. There are various types of POS systems and restaurant POS software to consider, from cloud-based to hybrid systems, depending on the needs of your business.

Whatever system you desire, an excellent point-of-sale system will provide the ability to monitor and control most functions of your business, either in-house or remotely. Sales reporting allows you to access better data on your market, which will enable you to spend more time on other areas like growing your customers. Understanding your customers' buying trends and monitoring sales performance data is crucial to continuous business growth.

Even owners of small restaurants find the needs of their store quickly surpass what they can handle on their own. That's why it's so crucial to invest in a POS system that can provide you and your employees with the technical support needed to keep daily operations running smoothly. A manual cash register just isn't going to get the job done for a busy restaurant.

How a POS system works

A POS system has two components: hardware and software. The hardware includes all the devices necessary to ring up a sale and capture payment information. It can include a cash drawer, credit card reader, receipt printer and barcode scanner. With a mobile POS system, the tablet or mobile device is all the hardware you need.

The POS software works behind the scenes to capture and process payments, track inventory, collect customer data, and send reordering alerts. These systems can integrate with third-party apps or your existing back-office systems, giving you the ability to run your commerce operations from one dashboard.

Top 10 benefits of POS systems for restaurants

For restaurant owners, a POS system can be particularly helpful. It can manage everything from inventory to wait staff, taking a lot of the complexity out of running a restaurant. Tools available through POS systems enable restaurant owners to track ingredients as dishes are prepared and beverages as they are consumed. The systems also let you run reports in real time – that way, you'll know if an item is doing well or if it should be removed from the menu. Here are the main benefits of modern POS software. 

1. Cloud-based operations

Internet-based systems let you check in with your store (or stores) from virtually anywhere in the world; all you need is an internet connection. Thus, a well-equipped POS system can give you the freedom to manage your store remotely, whether you're sick at home, on vacation or have multiple stores to operate.

The back-of-house software that runs on the POS hardware is equally important as your POS solution. A powerful cloud-based, back-of-house system makes it easy for you to update your product list, change prices, set up new staff clerks, set system security and more within a few touches.

2. Reduction in errors and theft

Since everything is stored on the computer or in the cloud, with every sale, refund and an incoming piece of merchandise automatically recorded, your inventory is far more accurate. No more fixing human errors when it comes to counting and math.

The National Restaurant Association reports that 75% of all shrinkage in inventory happens as a result of stealing – with a majority of the theft by the restaurant's employees.

A modern point-of-sale system helps you track the various transactions that occur on your POS – this helps to minimize theft in your business. You can monitor every time the No Sale button is pressed to pop the cash drawer open, when discounts are given, and how refunds are processed.

3. Identification of hot-selling items

You can monitor the popularity (or lack thereof) of each piece of merchandise or menu item in your restaurant. This allows you to place orders far in advance to avoid running out of "hot items," as well as give you the opportunity to jettison any goods that are merely languishing on the shelves.

4. Ordering at the ingredient level

Restaurant owners have more complex inventory tracking needs then retailers. They don't have to only worry about a popular dish selling, out but the ingredients that go into it. As a result, they need robust and detailed inventory management and tracking, and that is where a POS system comes in. These systems let restaurant owners track menu items at the ingredients level to ensure the chef has enough supplies to make everything on the menu.

5. Better customer service

A well-designed point-of-sale system saves your staff time, which translates into better customer service and better profit margins. Importantly, POS software that is intuitive ensures your staff can quickly and accurately process orders, which helps with guest management. For instance, it is far quicker for a staff member to punch an order into an iPad than it is to write one down and peck it into a cash register. For a busy restaurant or bar as an example, you can print tickets directly to the kitchen or bar printer, which can speed up the order delivery.

6. Time savings

Since daily operations run like clockwork when your restaurant uses a POS system, you'll have more time for brainstorming or strategizing. You'll be able to catapult your restaurant to the next level when you take advantage of the built-in features and functions. With everything from employee time management to real-time reporting data, you'll have more freedom in your business. These types of elements aren't available in a simple cash register.

7. Better business insights

Many POS systems have built in reporting capabilities that restaurant owners can use daily to get a snapshot of sales and how the restaurant is performing. A POS system also collects a lot of data about patrons, which can be used to inform future business decisions.

Owners can run reports on sales, credit card or digital payment transactions, sales for individual employees, and inventory. Reports can be run in real time and because the data resides in the cloud with most modern POS systems, you can access the data whenever, wherever.

8. Kitchen staff kept in the loop

A surefire way to have a backup in the kitchen and angry customers in the dining room is to not have clear communication between the chef and the wait staff. If things are lost in translation it can create serious headaches.

A POS system takes the guesswork out of the communications. Instead of having servers run to the kitchen or bar to place and orders, they do it on the POS. The tickets are then sent directly to the kitchen, eliminating any confusion or miscommunications.

9. Built-in loyalty programs

Restaurant owners want customers to come back often, but rewarding customers through a loyalty program can be cumbersome and time-consuming if they DIY it. POS systems make it easier with built-in customer relationship management and loyalty software.

Many POS systems give you tools to track information about customer preferences, such as the time they eat and any allergies they may have, and design promotions around that information. Let's say you have several customers who like to eat at 5 p.m. You may want to run an early bird special to reward those customers.

Also, POS systems with event tools allow you to program your promotions into the POS, which then easily handles the deals and discounts.

10. Staff schedule management

High turnover is a fact when running a restaurant, particularly during the COVID-19 pandemic. The last thing you want to do is overstaff or understaff the dining room floor on any given day. A POS system can automate scheduling to make sure there aren't any imbalances. It can also track days off and can act as a time clock, automating many of the business's labor management processes.

Choosing the best POS solution for your restaurant is a tough decision. Be careful when selecting software and hardware, and make sure it's right for your business objectives. Also, be cautious of POS companies who try to upsell you features that you will never use. [Read related article: Pricing: How Much Does a New POS System Cost?]

With the aid of a modern POS system, you can streamline multiple restaurant processes – from order entry to staffing to ingredient inventory – and view real-time sales reports that quickly give you insight into where your business stands each day, giving you more control over your company while allowing your business to grow and thrive.

Image Credit: Credit:Wave Break Media/Shutterstock
Donna Fuscaldo
Donna Fuscaldo
business.com Staff
Donna Fuscaldo is a senior finance writer at business.com and has more than two decades of experience writing about business borrowing, funding, and investing for publications including the Wall Street Journal, Dow Jones Newswires, Bankrate, Investopedia, Motley Fool, and Foxbusiness.com. Most recently she was a senior contributor at Forbes covering the intersection of money and technology before joining business.com. Donna has carved out a name for herself in the finance and small business markets, writing hundreds of business articles offering advice, insightful analysis, and groundbreaking coverage. Her areas of focus at business.com include business loans, accounting, and retirement benefits.