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What is a POS System in a Restaurant and How to Choose the Best One

October 30, 2024

Written by: The POS Exchange Team

It's a busy Saturday night at your restaurant. Guests are waiting for a table, servers are hustling to take orders, and the kitchen is firing out dishes like crazy. Suddenly, your POS system freezes. You restart the system, but it takes forever to reboot. In the meantime, you’ve lost valuable time and data, including open checks, and frustrated guests are starting to get up and leave.  A reliable POS system is essential for smooth restaurant operations, helping to both enhance customer satisfaction and improve staff productivity and morale.  In this article, we’ll discuss the Best POS System for Restaurant, how it works, and the key features to consider when choosing the best POS system for your restaurant.  The more you know about the features and benefits of this technology, the more confident you’ll feel in picking the solution that will help your restaurant thrive.

If you're looking for a quick way to enhance your restaurant's efficiency and customer experience, check out The POS Exchange's POS Systems.

What is a POS System in a Restaurant?

man in a restaunant - What Is a POS System in a Restaurant

A restaurant POS system is the software and hardware that restaurant operators use to run their entire business: 

  • From taking orders to managing the floor plan, 
  • Reservations
  • Reporting on sales
  • Doing inventory counts
  • Scheduling staff
  • Pricing their menu

More often than not, a restaurant’s point of sale system is a complete restaurant management system. 

Most of the top restaurant POS systems on the market are cloud-based, meaning that the data it stores your:

  • Sales data
  • Menu prices
  • Inventory levels
  • Reservations, etc.

They are all stored on a secure internet server. What does that mean? It means you can access and manage your restaurant using any device with an internet connection, whether a computer, tablet or smartphone. For example, a fast food POS system could run on tablets in-store but you can check your analytics at home on your smartphone. If your internet goes down, most restaurant POS systems have an offline mode, which allows you to keep working even when your internet is down. And when your internet is back online, your data is pushed and saved to the cloud. A mobile, cloud-based POS system lets you work from anywhere, whether or not you have an internet connection. 

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Why Do You Need a Restaurant POS Software?

man using a pos - What Is a POS System in a Restaurant

The restaurant POS system will act as a virtual assistant for your restaurant. Highlight some core significance of a restaurant POS system and how you will benefit from restaurant POS software. Let's look at the most significant reason for integrating a POS system and how the POS system can assist you in solving the daily challenges in your restaurant.   

Restaurant POS Ensures Real-time Menu Management 

The restaurant POS system can help you display a real-time menu and maintain dynamic menu. Customers who order food items through the website will get a dynamic menu. So, the restaurant POS system helps manage and track food orders and stocks. It allows the operators to make any:

  • Changes
  • Modifications
  • Replications  

Reduce Customer’s Waiting Time by Using POS System 

By integrating automation in your restaurant, you can enhance the experience of your customers and employees. The restaurant POS software can assist you in building an automatic framework to conduct your restaurant's overall activities. Using the restaurant POS system, you can quickly serve food items and manage the other aspects of your restaurant.   

Restaurant POS Allows Effective Monitoring & Tracking 

If you want to track and monitor every aspect of your restaurant, you need to adopt restaurant POS software. A restaurant POS system can allow the operators to get real-time reports, which will help them observe your restaurant's total inflow and outflow. 

By using this restaurant POS system, you can become aware of your stock, and according to this, you can design the service plan. So, the POS system can improve the service and reach the desired growth of your restaurant business.  

POS Software Minimizes Maintenance Cost & Errors 

Integrating a restaurant POS system will give you a complete restaurant management solution. All essential features and modules are incorporated in a single package, so you need not purchase any required module separately. Most significantly, it will assist in providing automatic management of your restaurant; You need not handle any aspect manually. So, the restaurant POS software can reduce maintenance cost and human errors by ensuring the automation of your restaurant.     

POS System Ensures a Tight Control Over Accuracy & Satisfaction 

Since the restaurant POS system provides automatic management and seamless operations, it will ensure the satisfaction and accuracy of your restaurant business. Moreover, the POS system can allow the operators to maintain discount and loyalty programs to enhance customer satisfaction. Using restaurant POS software, Loyalty programs can ensure customer satisfaction and retention.

How Does a Restaurant POS System Work?

man using a pos machine - What Is a POS System in a Restaurant

POS systems vary in how they work. Your POS will have several parts. The basic hardware needed for a POS to function is: 

  • A main server 
  • One or more POS terminals 
  • A credit card machine 
  • A cash drawer 
  • A receipt printer 
  • Depending on your hardware setup

Your POS terminals will be connected to a main server that houses all sales data for your restaurant. Your system will also be connected to “peripheral machines” via USB ports and cables, including a cash register, credit card machine, and receipt printer. The connections will allow you to control all pieces of hardware through the POS terminal. Some systems use Bluetooth technology to connect peripheral machines wirelessly. 

Process of a Restaurant POS System in Action

When you decide on a POS system, your POS company will help you set it up and teach you how to use it. You will have an account with your POS provider, who will work with you to set up your menu so that items are ready for staff to select when taking orders. 

Your POS provider will also set up any required staff permissions and accounts on the system, and they will train you how to use the POS so you can then train your staff. Some POS providers offer more extensive staff training than others. Here's a sample sequential process of how a restaurant POS system works. 

How Restaurant POS Systems Work 

Receive Order through POS Monitor 

You can receive both online and offline orders through a touch-screen POS monitor. The POS system allows the operator to receive all orders easily and spontaneously. You just need to select the food items and provide some required information, such as:

  • Customer Name
  • Customer Type
  • Waiter Name
  • Table Number

You can add new customers by filling in some required information. You can quickly receive any orders by selecting the food items. The restaurant POS system can allow users to check all ongoing orders, kitchen status, and online orders. You can receive all orders using Mobile POS or the Tabtel POS system. The restaurant POS system allows customers to give orders through the Kiosk POS system

Generate POS Invoice 

After receiving the orders, the restaurant POS system can generate a complete POS invoice automatically and accurately. To print the POS Invoice, go to the On-Going Order option. You will get two options to print the Invoice: 

  • POS Invoice
  • Due Invoice

You can print the entire invoice without completing the payment, and then we need to click on the Due Invoice option. If the customers complete the overall payment, we must click the POS Invoice option. When we click the POS Invoice option, the restaurant POS system can convert the entire mechanism to complete the billing process. 

Conduct Billing Process 

The restaurant POS system helps to complete the transaction. After receiving the orders, you need to perform the billing operation. The restaurant POS software can assist in completing the entire operation automatically. The POS system can calculate the total payment smoothly and accurately. To do this, you need to go to the POS Invoice option. You can see the total amount, but click the Pay Now & Print Invoice option. The restaurant POS system provides a split billing system if your customer wants. 

Display Order Details on KDS 

After completing the order-taking and billing process, the POS system allows you to connect a kitchen display in your restaurant. This kitchen display shows the order details to help prepare the food according to the customer’s requirements. Moreover, the POS system allows the operator to create a smooth and virtual connection between the POS counter and your restaurant's kitchen. Also, the kitchen display system (KDS) can save your employees time and ensure effective maintenance. 

Check Inventory to Prepare Food 

This automated POS system can record your stock or inventory. You need not manually monitor or track your stock; instead, this system can keep the entire system always up-to-date. When any orders have been displayed, you will be automatically informed whether the required ingredients are available. 

The POS system can check your stock or inventory and give you automatic feedback about the available ingredients. Also, the restaurant POS system can allow users to purchase all necessary items and suppliers. So, you can conduct your restaurant's overall purchase and inventory management using restaurant POS software.

Notify Customer by Counter Dashboard 

If all of the previous stages are performed, you can serve the desired food to your customers. In this regard, the POS system can notify the customers by integrating the counter dashboard. When an order is placed, the POS system can automatically send a message and notify the customers through this counter dashboard. 

The counter dashboard can assist both the waiters and customers in observing:

  • Table No
  • Order Number
  • Order Time
  • Remaining Time
  • Status

The restaurant POS system allows the operator to set up the sound system and see the overall Counter List.   

Provide Overall Reports

After completing all the previous steps, the restaurant POS Software can generate all the reports for your restaurant. If you do not have a POS or restaurant automation system, you need to create reports of every aspect of your restaurant manually. 

The POS system can provide purchase reports, stock reports based on food items and kitchens, sales reports, cash register reports, etc. The restaurant POS software can also assist in generating individual item sales reports, waiter sales reports, delivery-type sales reports, and so on.

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How to Choose the Best POS for Your Restaurant

woman using a pos system - What Is a POS System in a Restaurant

Selecting a new POS system for your restaurant can feel overwhelming. After all, you aren’t just shopping for new equipment. You’re choosing a partner to help you run and manage your business. Take the time to research your options carefully and consider involving your staff in the decision-making process. 

1. Buying Considerations

Buying considerations for restaurant POS systems vary greatly based on your venue type, size, and unique strategic priorities. A full-service restaurant may be most concerned with increasing staff efficiency and boosting average check size. A fast-casual restaurant may prioritize maximizing the number of guests served during peak hours.

Ultimately, all types of restaurants have common requirements, including the need for secure payment processing and real-time financial assessments. We unpack some of the key considerations to keep in mind when evaluating your options. 

2. Performance Reporting Capabilities

Every restaurant generates a mountain of data with every transaction. This information covers various areas, from inventory and menus to guests, employees, and overall business operations. Using this data for accurate restaurant reporting will help you run your business more efficiently and make more money.

But to generate these insights, you need the right tool. Your POS should be this tool. 

Modern POS systems are becoming increasingly flexible and sophisticated, making tracking and monitoring key performance indicators (KPIs) easier. Whether you’re examining menu item profitability, average customer spending, or server productivity, you’ll need to know how your POS system will help you generate reports that are friendly to look at and easy to analyze. Data is useless if you don’t know how to read it or what to do with it. 

3. Usability

Your new restaurant POS system should be easy to use. The interface should be attractive and intuitive. It should be easy to place orders, process payments, or execute any back-office function, such as accounting, reporting, and employee management. For the sake of your staff, who will need to learn the system, the quality of the user experience should be kept at the top of your mind throughout the purchasing process. 

4. Customization and Flexibility

As a restaurant owner, you’ll have your own set of needs, wants, and preferences. You may want a certain degree of customization to reflect your venue’s unique personality. You may want to configure my menus a certain way or generate non-standard reports. You may want to integrate with third-party software and/or hardware components.

You’ll need to determine the extent to which a POS system allows for customization and integrations and its relative limitations so you can make critical buying considerations. 

5 Ordering

Your POS should allow you to process orders directly at the table. When you eliminate the need for servers to travel back and forth between tables and a stationary terminal to place orders and process payments, you’ll dramatically boost staff efficiency and table turnover.

Mobile POS systems also have features that improve customer experience, like splitting bills without inconvenience. Your servers should also be encouraged to upsell with your POS system, and many systems prompt servers to sell menu modifications with pop-ups on the screen. These features all contribute to increasing the average check size. 

6. Payment

We know you know your restaurant needs to be able to accept major credit cards and cash. You’ll need a payment processor separate from your POS provider for this. Your payment processor may be integrated with your POS technology, and you’ll want to ask potential POS providers what this integration looks like on their end.

Depending on your POS provider, you’ll either be able to choose your payment processor or be obligated to integrate with the payment processor partnered with your POS provider. Do your research on payment processors and POS systems simultaneously so you know whether choosing your payment processor is an option. 

7. Data Security

Data security is crucial for restaurants. Your system must be equipped to safeguard against risks of data breaches by complying with:

  • Payment Application Data Security Standards (PA-DSS)
  • Payment Card Industry Data Security Standards (PCI-DSS)

Some POS systems monitor transmittal activity and send an alert if there’s even suspicion of rogue access points.

Your POS system will also need to protect against employee theft. One way to do this is by automatically tracking all the cash that servers collect. Some systems offer “blind closeout” capabilities, which require servers to reconcile all cash across all drawers at the end of each shift without knowing the precise amount they are expected to turn over collectively. 

8 Setup, Support, and Training

Purchasing a new restaurant POS system means entering into a potentially long-term relationship with a solution provider. This means you’ll want to buy from a company that offers high customer support. Most reputable POS providers will help you set up and oversee any required customization.

For example, they’ll help you optimize your system according to your restaurant’s physical floor plan. Remember that self-support will be key to your success. While phone, chat, and email are obviously important, self-help videos and articles are available at any hour, no waiting necessary. A great POS provider will have these resources available to you. 

Questions to Ask

Once you’ve chosen your shortlist of POS providers, it’s time to book demos with sales reps to chat about your needs. Here’s a list of questions to ask your sales rep to ensure you have all the information you need to decide. 

  • What is your track record for stability and reliability? 
  • Do I need an internet connection to run the software? 
  • How can I customize the software for my restaurant? 
  • Are your payment processors EMV compliant? 
  • Can I choose my own payment processor, or do I need to go with your partner(s)? 
  • What kind of staff training do you offer? 
  • How do I access my restaurant data from offsite? 
  • Do your customer support staff have restaurant experience? 
  • Do you sell my restaurant’s data to third parties? 
  • What’s your customer support like? Can I call you 24 hours a day? 
  • What is the total cost, for hardware and software? 

Evaluation Checklist

You’ll want to ensure everything you need is covered during your POS demo. Here’s a quick checklist to refer to as you chat with sales representatives. 

  • Performance reporting capabilities 
  • Usability 
  • Customization and flexibility 
  • Ordering and payment capabilities 
  • Data security 
  • Setup, training, and support 
  • Costs and expected ROI 
  • Marketing and loyalty features 
  • Inventory management 
  • Staff management 
  • Cash drawer management 
  • Table management 

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Book a Free Demo With POS Exchange To Learn About Our Customized POS System Solutions Today!

The POS Exchange brings over 20 years of restaurant expertise, serving 200,000+ merchants and processing billions annually. Our tailored POS system solutions help businesses speed up checkouts by 30%, implement dynamic pricing, and manage customer reviews while reducing overhead. Perfect for:

  • Full-service restaurants
  • Pizza shops
  • Coffee houses
  • Multi-location enterprises

We offer end-to-end service, from smart consultation and interactive demos to local installation and 24/7 support. 

Our mobile iPad POS systems streamline operations with features like order management, bill splitting, and inventory control. With integrations for business management tools and advanced security measures, we ensure your POS system grows with your business. 

Trust our expertise to help you avoid the common pitfall that affects 38% of new business owners who choose the wrong POS system. Whether managing a busy restaurant, a local café, or operating a multi-location business, The POS Exchange delivers customized POS system solutions that tell your unique business story. 

Book your free demo with Pos Exchange 

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