point of sale software | 10 mins read

Breaking Down Point of Sale Software

By Lauren Christiansen
Breaking Down Point of Sale Software

What is Point of Sale Software?

Point of sale (POS) software, broadly speaking, is software designed to manage the sale of goods. More specifically, point of sale software can be broken down into two subcategories, retail POS and restaurant POS. Retail POS is typically used for managing inventory, cash registers, gift cards, and other related tasks. Restaurant POS, on the other hand, is used for managing things like inventory, cash registers, gift cards, table service, and reservations.

What is Point of Sale Software?

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To understand point of sale software, it first helps to know what point of sale means. POS is simply the location in which restaurant customers check out at. Traditionally, customers paid with cash or a credit card up at the front register. Or, they gave their credit card or cash to waitstaff, who would then process the transaction.

Advances in technology have led to new developments and features in point of sale systems. Now there are more high-tech software solutions to facilitate transaction processes in a much faster, efficient way. It's not just about how small businesses can process payments. A fully optimized POS solution handles inventory, gift cards, loyalty programs, and table turnover. It includes the hardware and software required to facilitate quick transactions and streamline restaurant processes.

Modern POS software is entirely digital. This ensures patrons can check out from multiple locations, whether it be on a phone, a kiosk, or through waitstaff. Point sale software can integrate with other restaurant management solutions. This allows managers to accurately track inventory, optimize online ordering, and view data reports.

Restaurants can also streamline the reservation process and use collected data to grow business profits. Whether you are a small coffee shop or a fine dining establishment, it's time to trash the cash register. Read ahead to learn more about a point sale system and why they are great for business operations.

Importance of Using Point of Sale Software

Maybe your restaurant has been using a cash register for 20 years. Why change? Profits are good, employees are happy, and customers don't seem to mind. While traditional payment processing methods may work for you now, it isn't a fail-safe solution.

Customers now expect digital experiences. They want multiple methods of checking out. They need to order online. They want to be served through a kiosk. A loyal customer base will only last so long. This generation demands something different.

Furthermore, every type of small business can benefit from a cloud-based POS. When all restaurant processes are integrated, everything runs more efficiently. Management can view reports and analyze data to generate actionable insights. In a competitive landscape, this is critical. It can help save money, pinpoint bottlenecks, and achieve higher profits.

Common Point of Sale Software Features

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Point of sale software programs is the backbone of many successful businesses. They allow you to track your inventory, monitor your service, and make your business more efficient and profitable.
But how do you know which point of sale software is right for you and your restaurant business? First, you need to know what a POS system is supposed to do. Here are the main POS features to look out for in hospitality.

  1. Intuitive Interface and Easy Checkout- It should be simple for employees and customers to use a point of sale solution. This will ensure restaurant processes are streamlined and customers remain satisfied.

  2. Quick and Simple Updates- An optimized POS system should be easy to update, and accessible off-site. This is critical for large fast-food chains that must regularly update menu items and prices.

  3. Easy to Manage- An expensive POS isn't always better. The pricier the system, the harder it is to install and update. Research vendors wisely before you make a final decision.

  4. Inventory Control- While this is not a must-have feature, it is more common than not. Inventory control integrations will ensure that with each sale, stock counts are also updated. Management will know exactly what and when to order, which saves a lot of money.

  5. Quality Reporting- Reporting features are a must for any small business. Management can use reports to drill down into sales data, identify problem areas, and optimize decision-making. This helps to save a lot of money and increase profit margins.

  6. Tabletop and Reservation Management- More point sale systems now streamline the reservation process and optimize tabletop management. This will lower wait times, improve customer satisfaction, and minimize complaints.

  7. Marketing Tools- Features should include and be able to manage loyalty programs, gift cards, customer rewards, and other marketing tools. This will increase revenue and encourage patrons to come back.

  8. Kitchen Display System- A POS system should integrate with a kitchen display solution. A KDS is in the back of the house. It allows kitchen staff to view customer transactions so they can fulfill them in the proper order.

How to Use Point of Sale Software

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It's difficult to outline exactly how a POS solution works as they all have various features and functionality. However, there are a few standard ways for customers and employees to operate a restaurant POS. Remember, a POS can be used for quick ordering, data security, inventory management, reporting, menu enhancement, and marketing purposes. Here are a few ways to use a POS solution.

  • Handles Communication Between FOH and BOH- POS systems simplify restaurant processes by ensuring the front of house and back of the house can easily communicate. Waitstaff enters orders in the solution, which immediately goes to the kitchen display system in the back. Kitchen staff can then fulfill orders to ensure customers receive their food on time.
  • Optimizes Food Prep and Inventory Control- An optimized POS can help lower food costs and waste when integrated with an inventory management system. When a server takes an order, inventory numbers are immediately updated to reflect the new ingredient amount. This also helps kitchen staff and management know how much food to prepare and when to reorder items.

  • Enables Menu Enhancement- Management can view reports that show which items sell well or are most profitable. Owners can then make better menu-related decisions to increase profit and eliminate waste.

  • Monitors Employee Performance- Managers can also view reports that show who is upselling, who is doing the bare minimum, and who needs further assistance. This will help improve training processes and cut back on labor costs.

  • Inputs and Processes Orders- The most obvious way to use a POS system is to input an order, pay for it, and wait for it to be fulfilled. Customers sometimes use POS solutions on a kiosk. Or, servers take orders with handheld POS devices.

Top Benefits of Point of Sale Software

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If restaurant processes are slow and outdated, it's time to invest in a new point of sale system. While initial costs are sometimes high, the benefits outweigh any expenses. Traditional methods such as cash registers are not feasible in this digitized economy. Without the capacity to drill into data and analyze performance, the competition remains a huge threat. Still not sure? Here are some of the top benefits of point of sale software that may help to change your mind.

  • Cloud-Based Operations- Having a cloud-based solution is always a plus for any small business. The cloud can store more data, is highly secure, and is simple for anyone to access. Management can view data at any branch, from any location. They can also make updates off-site, which is great for on-the-go, busy owners.

  • Minimizes Errors and Theft- Errors always frustrate customers, increase expenses, and hurt a restaurant's brand. A POS solution eliminates human error and ensures data reports are accurate. It also minimizes shrinkage, which constitutes the majority of restaurant theft.

  • Optimizes Service Speed- Because communication is better between the FOH and BOH, customers receive their orders must faster. A good POS solution will also lower wait times and streamline table turnover. This makes customers much happier and ensures their return.

  • Automatic Alerts- You can customize a POS system to send automatic alerts when inventory levels are at a certain level, or if sales are low. This will help improve management processes and keep customers satisfied.

  • Saves Time and Resources- Any computerized solution will always be much faster than manual processes. Time saved means more time to focus on critical tasks that help grow the business. Because point of sale solutions also integrates with inventory management software, you can also cut back on waste. This helps save a lot of resources and ensures customers have access to the menu items they love.

  • Better Data Insights- Reporting features allow managers to drill down into data and assess what needs to be fixed and what works. Traditional cash registers will always lead to less accurate data insights, which increases waste and expenses.

When to Purchase New Point of Sale Software

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Point of sale software is the lifeblood of most brick-and-mortar businesses. It's also one of the most expensive investments you'll make in your company. So, when is the right time to purchase it? Should you upgrade when you purchase a new computer? Upgrade when you hire a new employee? Upgrade when you start a new store? The answer is it depends on the type of POS software you're using, your current needs, your long-term goals, and your budget.

If existing software is slow and buggy, it's time to get a new POS. A complicated and meticulous system is a recipe for disaster. It is also difficult to update, which is not feasible when you run several different restaurants. If you find yourself constantly restarting and rebooting a system, it's a problem.

If you're had your current system for more than 4-7 years, the hardware is probably outdated. Older terminals can't accommodate the type of features and functionality that are available on new hardware. Sleek and sophisticated hardware looks much better, is more functional, and is less likely to break down.

It's also time for a new system if you can't access kitchen screens, see digital receipts, generate reports, or offer loyalty programs. Limited integration capabilities are another reason to invest in a new point of sale system. Integrations ensure all restaurant processes are streamlined and data insights are more accurate. Finally, payment processing should align with societal expectations. There should be several ways for customers to pay in case they forget a card or cash.

Tips for Purchasing the Best Point of Sale Software

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Buying point-of-sale software can be a daunting process. The right POS software will make managing your business easier. But the wrong POS software can be frustrating. Here are some tips to help you find the right POS for your business.

  • Consider Preferred Platform- Though some point sale solutions run on both Android and iPads, most are more particular. Consider which platform the restaurant wants to use before choosing a system. Ensure the system is industry compatible or aligns with what the competition uses.

  • Capacity to Change One Component- Ideally, you need a POS system that enables you to change either the software, hardware, or transaction processing feature. Outdated models force you to change all three at once rather than change one at a time.

  • Research Vendors- You need a vendor that doesn't require you to sign a lengthy, complicated contract. Make sure the provider doesn't force you to purchase certain equipment or use the POS as a payment processor. You should be able to customize the POS to meet business needs.

  • Transparent Pricing and Month-to-Month Options- Pricing should be obvious and upfront from the beginning. Ideally, month-to-month payment options are better as they allow you to switch providers if something goes wrong. Be wary of any vendor who requires you to use the service for long periods. There is typically a reason for that, and it isn't good.

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