How to choose a POS system for a restaurant and bar

Let’s be honest. You probably didn’t get into the restaurant and bar industry because you wanted to spend time trying to figure out technology. You much prefer good people, good food, and good drinks, and wanted to bring them all together.

That being said, spending a bit of time sorting out the tech side of things — particularly when it comes to your point of sale — is must.

Around 95 percent of restaurateurs reported that restaurant technology improves their business efficiency, and 73 percent of diners said that restaurant technology improves their guest experience.

Simply put, the right system makes it easy for you to stay on top of your restaurant’s sales and operations, so you can devote more energy to growing your business.

Choosing your POS system can seem like a daunting task — but it doesn’t have to be. Whether you operate a neighborhood watering hole or a fine dining establishment, the tips below will help you narrow down your choices and select the best system for the job.

• The best POS systems for restaurants, retail, and small business

Determine your needs and your budget 

Before you can make an educated decision about a restaurant POS system, you have to define your needs and your budget. A full-service restaurant is going to have different requirements than a quick-service restaurant, the latter of which may require the ability to quickly process orders and payments in order to keep the lines moving.

Take into consideration the features below and what your business will require, then create a list of “must-haves” and “nice to haves”.

Then, create a budget ahead of time, taking into consideration that prices greatly depend on the features that you require. Whereas more traditional systems can run you several thousand dollars for the licensing fees and equipment, modern cloud-based solutions are available for $70/month to $250. A good rule of thumb is to reserve 3-4 percent of your annual revenue for POS expenses.

Key features for your restaurant POS 

Restaurant POS systems are essential to food and beverage operators, and the right platform should deliver the following:

Inventory management 

Food costs are estimated to be 28-35 percent of restaurant sales, but yet restaurants leave around $2 billion in food waste each year. In other words, inventory is critical, and managing that inventory is something that can be efficiently done with a good POS system.

Look for a platform that tracks inventory based on orders, that will notify your wait staff when an item runs out, and that will generate purchase orders when stock of an item gets low. 

In addition, raw ingredient tracking is something specific to restaurant POS systems that can’t be overstated. Because you’re working with “raw” ingredients — those eventually assembled into a final product — having an inventory system that keeps track of both raw ingredients and complete products gives you an accurate look at what you need and what gets wasted.

When it comes to bars, choose a platform that tracks the alcohol poured in every drink and alerts you when you get low on any ingredients. There are even systems that store drink recipes, allow you to see stock in real-time, and report on the best-selling drink orders.

Menu management

There are drink specials, dining specials, seasonal items — and you need a POS platform that can keep up with all of those situations, plus all of the inventory changes you have every day and every week. Being able to program your POS to automatically accommodate these changes means servers won’t have to remember all the specials, or that someone won’t get charged the happy hour price instead of the regular price.

Tab management

Whether you’re a restaurant that serves liquor or a straight-up bar, the ability to efficiently manage tabs is critical to your success. A POS makes splitting a tab among multiple people and transferring tabs between servers and dining areas as simple as a tap on the screen.  

Pre-authorization of payments

Speaking of tabs, closing them out used to be time-consuming, and you ran the risk of getting stuck with the “insufficient funds” or stolen card situation. A good POS makes that a thing of the past by implementing pre-authorization of payments, meaning it saves your customer’s card as soon as their tab is started. With a swipe of their card, it automatically checks that it’s valid, that there’s a bank account with sufficient funds tied to the card, and that the card isn’t fake, lost, or stolen.

This streamlines the process and speeds up the workflow, all while incentivizing the guest to stay longer and reducing the risk of the bill not getting paid. 

Employee management 

Modern POS systems can double as employee management tools, allowing you to manage both front-of-house and back-of-house employees through hours tracking, sales, and shift performance. Staff can clock in and out using their IDs on POS terminals, and you can receive alerts about everything from overtime to employee performance and their individual impact on revenue.

In addition, you can set individual user permissions, track cash and credit card tips, pool tips, and split tips among servers, and implement payroll automation. 

Comprehensive reporting 

Do you know which servers are performing the best? Are you aware of your top-selling items? Sales (by item, hour, department, etc.), food costs, and labor expenses are just a few of the metrics that a good restaurant POS should be able to track. 

For example, POS reports can show you when you’re busiest and what the most popular drinks are so you know how to stock and staff accordingly. 

A good POS system generates those reports so you can accurately view your operation’s performance, take note of areas of improvement, and make educated business decisions as a result. 

Table management

An effective POS system gives you the functionality to design a restaurant floor plan, take orders by table, move parties around freely, and manage multiple sections of the restaurant from one central space. 

In addition, they can allow you to assign servers to new tables based on each server’s capability and current workload, calculate estimated wait times, assign properties to tables, and set table alarms that alert staff to help reduce slow and poor table service.

Technical support

Whether you run a bar or a restaurant, you know the panic that ensues when your system goes down — and that could be at 12 am. The system you choose should provide customer support (hopefully) 24 hours a day so you can get your system up and running again in no time flat. 

Good support should also be there when you’re not in a panic situation, including during the initial setup, and with ensuing credit card help, software upgrades, and ongoing training. Technical support is often overlooked, but reliable help from your POS provider will go a long way towards your establishment’s success.

Moving forward with your POS system 

Buying a POS system for your restaurant or bar is a big commitment of both time and money, so it’s important that you do your research before making the purchase. One thing to also keep in mind is the ease of use for your employees. In an industry with a turnover rate of 75 percent, it’s critical that the POS software you implement is user-friendly and intuitive so staff doesn’t leave out of frustration. 

When everything runs smoothly, a good POS system provides them with the right tools to do their jobs as efficiently as possible — reducing stress and turnover, and increasing productivity and profits. 

Read these next

• How a POS system can help you manage your inventory
• How to manage your payments and financials with a POS system
• The best POS systems for restaurants, retail, and small business