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    How to use a POS system in a restaurant

    `Stephen Elliott` : Posted on September 23, 2020

    Restaurants have come a long way from the days of service bells and waitresses on roller skates, so why does your cash register look like it was built by Ben Franklin? 

    Restaurant Point of Sale (POS) systems are changing the way restaurants operate, bringing data from the back of the house to the servers, cashiers, and greeters at the front. They can enable you to take payments from just about anywhere in your restaurant – at the front, at the exit, or even online. Unifying these payment streams is critical, especially when you consider online ordering has grown by up to 3,868% in some places since February.

    In this article, we’ll cover how to use a POS system in a restaurant, how they improve your restaurant’s efficiency, and how to evaluate which one works best for your needs.

    5 Ways to Recession - Proof Your Restaurant Business
    Optimizing restaurant operations in 2023 and beyond

    What is a restaurant POS system?

    A restaurant POS system is a fancy name for the system that accepts debit or credit card payments. Your POS is, in other words, where your customers pay for your services. It can be at the counter, at the table, or even online. Modern POS systems track payments, receipts, inventory, customer and sales data, and can even help you manage your employees.

    Otherwise known as the point of purchase, the cash register was traditionally located near the exit so customers could pay on their way out. As restaurants, and moreover the idea of dining, have changed, the concept of the point of sale has changed with it, allowing for more freedom and flexibility in terms of where customers can pay – and where restaurants can receive their money.

    In most restaurants nowadays, POS systems are the central processing unit for pretty much all information going into and out of the business. Every financial transaction is recorded at the point of sale, and your POS system can connect that information with your inventory, cross-reference it with your menu items, and produce detailed financial reports cut up in just about any way you can imagine.

    How do you use a POS system in a restaurant?

    You can use a POS system for a variety of functions beyond taking your customer’s money. POS systems can be used for:

    • Fast ordering
    • Data security
    • Inventory management
    • Financial reporting
    • Menu optimization
    • Staff scheduling and control

    And so much more. To take full advantage of your POS system, you should integrate it with as many operations as you can, including your inventory management platform, your staff management solutions, and your financial management system. Integrations are really where POS systems shine the brightest, and where they can do the most for your business. MarketMan, for example, can integrate with your POS to help unify your inventory supply chain and food operations with your sales and finances. To find out which POS systems we integrate with, check out our page on integrations.

    How does a restaurant POS system help your business?

    POS systems can help streamline your restaurant’s operations, and unify your restaurants front of house and back of house tasks in one easy-to-use system. POS systems can help with reservations, front of house and back of house communication, food preparation, waste and theft reduction,  menu optimization, and performance reporting.

    Reservations and seating in your POS system

    Taking reservations is one of the trickier parts of the customer experience: plans change, accidents happen, and sometimes your 6pm party of four is actually a party of seven. 

    In the old days, restaurants would keep a paper book with reservations alongside a laminated floor plan to manage seating. By the end of your average Friday night, the book would be scribbled over and rewritten, and the floor plan would be so smudged with felt marker you could barely make out what was a name and what was a table.

    Modern POS systems can integrate your reservations from phone and online bookings, enabling you to swap tables, names, and times with ease. This takes the burden off your serving and waiting staff when reservations cancel or change. 

    You’ll be able to make universal changes on one tablet or computer, so everyone can stay in the loop as to who’s sitting at a high top, what family is sharing the mozzarella sticks, and who no-showed their anniversary dinner.

    Front of house and back of house communication through a POS system

    Every restaurant needs a system to take orders for the kitchen and bar, and share those orders with chefs, servers, and bussers. Traditionally, front of house and back of house restaurant ops run very differently, given the nature of their jobs. Because of that, it’s easy for breakdowns in communications to occur, as the workflows have different things happening at different times.

    POS systems can help simplify this process  – having waiters writing down orders, walking them to the kitchen, and answering questions from the chef leaves a lot of room for error and miscommunication. 

    Serves and waiters can enter orders directly into your POS system with notes and comments, so chefs can receive them the moment the order is placed. Some restaurants have tablets or other devices to allow staff to input orders as they wait on customers, while others give customers the tablets to let them order themselves. 

    POS systems and food preparation

    Calculating food costs is one of the best ways you can keep tabs on your restaurant’s health, but have you ever tried doing it by hand? Luckily for you, we left that behind with rotary phones and floppy disks.

    Most POS systems are designed to track your inventory, as well as ingredients used for each menu item. So when your server types in “1 burger with no cheese, double pickles” your inventory will reflect those changes. 

    To stay on top of your food costs, you need accurate data that POS systems can provide, so nothing can slip through the cracks. If you’re not making enough money on an expensive menu item, you’ll be able to see it through real-time reports from your POS.

    Additionally, many POS systems integrate with your inventory management system so you can streamline the process even further – that means when that double pickle burger empties your last jar of Vlasic, you can schedule an order immediately. In addition, data collected by your POS will help you evaluate discrepancies between your recipes, orders, and actual inventory, so you can identify areas of waste, theft, or where you can just get a little more efficient. 

    Minimizing food waste and theft

    You’ve probably heard the saying: “What gets measured, gets managed,” and that couldn’t be truer for the restaurant business. A POS system, integrated with a restaurant inventory management platform, can allow you to track food costs and food waste throughout the normal course of business.

    You’ll be able to compare inventory received from your suppliers, as well as invoices, with actual usage and ordering to find any discrepancies and areas for improvement. By tracking your inventory in tandem with sales, you can gain valuable insight into where your operations can be improved. 

    After all, food waste doesn’t just hurt the environment, it’s one of the biggest reasons restaurants fail. Small, individual costs from food waste can add up very quickly, siphoning away money needlessly. Whether it’s because your portions are too large or your prep cooks aren’t using ingredients effectively, food waste is an unnecessary expense that can get out of hand just as easily it can be managed.

    On another note, employee theft is an unfortunate reality for many restaurants. Since things are so hectic in the kitchen, it can sometimes be hard to tell when someone’s skimming off the top. A few bites here and an extra steak there can add up to serious losses over time, especially when you consider the profit margins of most restaurants. Paring POS data with inventory management data can help you nail down thieves before they can rob you blind.

    Therefore, a POS system, integrated with your inventory management platform, is crucial to running a restaurant in 2020.

    Menu optimization

    If you can’t tell by now, a POS system can seriously improve your inventory management game. One of the most powerful ways it can do that is by giving you data to optimize your menu. Traditionally, you’d have to keep an eye on how much people are eating, and alter prices incrementally to optimize your prices, menu options, and serving sizes.

    With a POS system, you can whittle down weeks worth of work into a few minutes. You’ll be able to see preferred dishes, identify weak spots in your menu, and cross-reference it with sales data and food costs. You’ll remove all the guesswork and adjust pricing and menu order on the fly, making menu setting less of an experiment and more of a science. 

    In addition, by pairing sales information with inventory and food waste costs, you’ll be able to see what menu items aren’t worth the money, and which recipes can be altered without rocking the boat.

    Staff and restaurant performance reporting

    Your POS system can help you track key employee metrics like sales per employee, average tips, attendance, and more. You can also track things like the number of customers served, table turnover, and number of new customers seated on any temporal basis. 

    Comparing employee and restaurant-related statistics weekly, monthly, and annually through your POS can help you stay on top of your restaurant’s financial health, manage staff performance, and take action to improve performance across the board. Getting this data is critical to being able to manage your front of house and back of house employees, arming you with relevant, timely, and accurate reporting data to make decisions about staffing and more. 

    In addition, your POS system will allow you to make your restaurant more efficient in every area. For example, if you know your average time to seating is over 20 minutes, your average time to serving is over an hour, and your average customer visit is an hour and a half, you can deduce that you need some serious efficiency changes. 

    Without a POS system, you’d have to keep tabs on this yourself, recording this data by hand or having your managers keep an eye out. Through a POS system, you can manage all of this instantly, and adjust your plans, seating, and staffing in a fraction of the time.

    How to pick a POS system

    There are many different POS systems, with tons of features, add-ons, and integrations – but not all are equal. To find the one that works best for your restaurant, focus on the essential criteria. Ask yourself these questions: 

    • Does it accept credit and debit transactions in my location?
    • Can it integrate with my other software?
    • Does it have the reporting metrics I need?

    Integrations and reporting are clear differentiators for your POS system. Part of what makes them so powerful is that the data can be used across your restaurant’s operations to power up your decision making. POS systems that can integrate with inventory management platforms,for example, can take out the guesswork in inventory management, menu optimization, and so much more. You’ll have all the data at your fingertips for calculating food costs, adjusting menu prices, and addressing food waste. 

    You can also track inventory across the board, from the moment someone orders a burger to the moment a prep cook opens up another package of ground beef. An integrated POS system can give you complete control over your food production and sales process. MarketMan offers an industry-leading inventory management system that seamlessly integrates with almost any POS system to help you make the most of your restaurant, and spend less time worrying about the numbers and more time doing what you love. To learn more about what MarketMan can do for you, request a demo or contact us today.

    5 Ways to Recession - Proof Your Restaurant Business
    Optimizing restaurant operations in 2023 and beyond

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