How To Choose A Restaurant POS System
It seems like there’s an endless number of POS systems on the market. The numbers continue to grow as more and more iPad-based solutions enter the market, too. All of this makes finding the right POS system for a restaurant a daunting task. You want one that is easy to use, matches your budget, has good customer support, and offers features you need for your specific business. Knowing exactly what you need in a system is a great start. It helps you to narrow down the field a bit. Once you’ve narrowed down the options, all that’s left is to test out each restaurant POS system. Think of the process as akin to buying a new car. Select a make, model, and feature packages before you start going on test drives.
This guide will help you thin out the options and find the best choice for your restaurant.
Table of Contents
Budget For Your Restaurant POS
Before you get into the research and fall in love with the Lamborghini of restaurant POS systems, it’s best to know what you can afford to spend. Creating a budget ahead of time does a couple of things. First, it helps to narrow the selection pool, and second, it keeps you from becoming hypnotized by the shiniest new toy.
The good news when it comes to cost is that restaurant POS systems have increasingly moved into the cloud in recent years, adopting a monthly subscription-based pricing model. Cloud-based POS setups, which typically use a lightweight iPad or tablet register, have a smaller upfront cost compared to the clunky Windows-based POS systems of yore. The older systems could cost several thousand dollars for the licensing fees and equipment, plus ongoing service and support fees. By contrast, you can get started with one of the popular cloud-based POS systems for $1,500 or less.
Of course, there’s also the monthly subscription cost to consider; most of the popular web-based POS systems start at $60–$99/month for single-terminal setups, with additional terminals costing $40–$50/month/terminal. If you want more advanced features on your restaurant POS system (such as a loyalty program, online ordering, employee management, advanced inventory management, etc.), you might pay as much as $250/month for your restaurant POS.
The cost of the POS equipment itself will likely be somewhere around $1,000, or more if you have multiple terminals or want to spring for cutting-edge hardware add-ons like a digital menu board, digital kitchen board, self-ordering kiosks, handheld devices for servers, etc.
The total cost of a restaurant POS system depends on a few main factors:
- How many terminals/stations you have
- Number of store locations
- Whether servers use handheld devices for tableside ordering/payments
- Whether you use a locally installed or web-based POS
Restaurant POS Payment Processing Costs
Payment processing costs can represent a big overhead expenditure for any business, including restaurants. While a POS system’s payment processing costs actually depends on the merchant account/payment processor, it’s important to know some POS systems let you choose your payment processor, and others do not. Some systems require users to go with the company’s in-house payment processing, while others let you integrate with an outside merchant account. There’s nothing inherently wrong with using a POS system’s in-house payment processing, but you’ll want to make sure the service is reviewed well and doesn’t charge too much. Some POS systems charge a flat rate for in-house credit card processing, while others charge different rates for different subscription levels.
Cost Of Locally-Installed VS Web-Based Restaurant POS
Are you the old-school type who prefers your data and updates to be housed on a computer on the premises of your restaurant? If you’ve considered the pros and cons of cloud POS systems and decided you’d rather go with a locally-installed system, you’ll need to keep the following costs in mind: license fees, monthly support fees, and the cost of any hardware bundles you may need to purchase. Below is a breakdown of the average costs.
- Locally-installed restaurant POS software generally has a one-time license fee that ranges between $1,000 and $2,500. Web-based systems, by contrast, don’t usually charge a licensing fee.
- Monthly support fees for locally-installed systems run from about $25 to $100 per month. For comparison, web-based restaurant POS systems run anywhere from $60 to $300 per month but do not charge extra for support.
- Locally-installed POS system hardware ranges from $2,000 to $4,000 per terminal. Hardware bundles for web-based systems, on the other hand, cost between $450 and $1,500. Whether you buy a locally installed or web-based system, you should also consider if your POS hardware is compatible with other POS systems if you decide to switch. Most cloud-based restaurant POS hardware is compatible with other systems (Clover Station is an exception).
- Do your best to avoid long-term contracts and cancellation fees, as these can add to your overall cost and convenience (or lack thereof) when dealing with a locally-installed system. It’s good to keep your options as open as possible to avoid cancellation penalties in case you don’t like the system. Most web-based systems use a month-to-month contract, which gives you the flexibility to choose another system if the first one doesn’t work out.
Look At Available Restaurant POS Features
You’ve narrowed your options by budgetary requirements and by whether the system server is in the cloud or installed on-premise. Now it’s time to narrow your choices based on the features each system has to offer. It might help to rank the features on a continuum of “must-have” to “nice but not necessary” to help you determine the best overall system for your needs. The goal is to find a system that includes all of your restaurant POS must-haves.
Consider if you want/need inventory-related features like low-stock alerts, purchase order management, and the ability to track vendors. Restaurant inventory can be more complex than retail, and doing it manually leaves room for lots of errors. If your current system works, that’s great, but if you need better inventory management and you want a good POS, you might as well look for both!
Online Ordering & Delivery
Being able to take orders online (for delivery/pickup) is important for many restaurants, especially in the fast-casual space. If your system doesn’t offer online ordering natively, then it should ideally integrate with an outside online ordering and delivery service such as GrubHub, DoorDash, or UberEats.
Being able to split bills or even split the cost of appetizers/entrees, etc., is crucial for sit-down restaurants. Consider how a POS system handles order management and how your servers will be able to perform the order management functions that your customers demand. Another (more advanced) aspect of order management is the ability for servers to send orders to the kitchen directly from the floor using an iPad or another mobile device.
Most POS systems offer at least some basic table management functions, but the more robust systems can have advanced floor plans and even seat management. Consider how granular you need your table management functionality to be.
Menu management/creation is especially handy for restaurants that have multiple locations with different menus, or restaurants that specialize in seasonal foods. Being able to adapt and change the menu on the fly is a feature many restaurants can benefit from.
Some POS systems have their own built-in loyalty program for an added monthly fee—usually, this feature is not included at the entry price level. A loyalty system can encourage repeat business and promote customer engagement. Most systems integrate with a third-party loyalty app even if the system doesn’t have its own loyalty program.
Reservation management is a needed feature for some restaurants. Generally, reservations are considered an advanced restaurant POS feature, though an increasing number of systems integrate with apps like OpenTable which allow online reservations.
Some level of reporting is included in all modern restaurant POS systems. POS reports can show metrics like your daily sales, server performance (if the system includes employee management), your best-selling items, and more. Would it be useful for you to know which servers are performing best? Or to see when the restaurant is busiest for scheduling staff? Make sure you evaluate a POS system’s reporting features because they can vary a lot from one system to the next.
When evaluating a POS system’s features, don’t forget the power of third-party API integrations—that is, which outside apps the system integrates with (GrubHub, Gusto, Quickbooks, etc.). Modern restaurant POS systems are powerful and flexible enough to integrate with a variety of other apps to fill any gaps that the software doesn’t include natively.
Restaurant POS Checklist
Use the following checklist to help you determine the features that are most important to you.
- Do you need Quickbooks integration? Many of the vendors that we’ve reviewed offer Quickbooks integration, but not all of them offer seamless (real-time) integration. In some cases, you’ll have to export and then import some sort of CSV or IIF file.
- Do you need the ability to accept online orders? As mentioned, some POS systems have built-in online ordering functionality, while others offer integration with third-party apps like GrubHub, Eat24, Seamless, etc.
- Do you need the ability to accept online reservations? Similar to online ordering, some systems will have this built-in and others will offer integrations with OpenTable.
- Do you need table/floor management functionality? This feature is offered in some of the more robust systems. Make sure you inquire about table/floor management if you think it’s a must-have.
- Do you need the ability to print to the kitchen?
- Do you need ingredient-level inventory management? For example, let’s say you have a pizza restaurant that uses different ingredients on each pizza. Do you need the ability to track inventory for each ingredient that goes into the pizza? Some systems offer real-time inventory management that keeps count of what you use most and when it’s time to place an order. Some systems even offer features that allow you to send a purchase order from the system.
- Do you need the ability to keep open tabs or split checks?
- Do you have a credit card processor? Do you need one? Find out which processors the POS integrates with. This is important because, again, not all POS systems integrate with all credit card processors. If you already have a processor then you’ll need to make sure it will integrate. If it doesn’t, all of your credit card sales will have to be run outside of the POS system. That’s not the most efficient way to turn over tables in a restaurant. However, if you want, you can run a cash-only business with a POS system.
- Do you need the ability to accept mobile payments? Ask the POS vendor about NFC compatibility. Most modern systems are EMV (chip card) compliant, but some still lack NFC (mobile payment) support. With all of the mobile payment wallets like Apple Pay gaining ground, you definitely want the ability to accept those types of payments.
- Do you need the ability to accept onscreen tips? There has been some discussion about whether or not iPad POS systems actually increase tipping, so it’s a good idea to research this topic a bit for yourself and consider whether you’d like to include a tipping feature.
- Do you need employee time card management?
- Do you need the ability to sell items by weight?
- Are there any other feature requirements that you’d like to add? Every business is unique, so make sure you reference your list of must-have features that are custom to your personal situation.
Consider Your Restaurant’s Technology Needs
Technology needs are affected in large part by restaurant type. Quick-service restaurants have different needs than sit-down restaurants, for example. Here are some additional things to consider:
- How reliable is your internet connection?
- Do you need a POS that can take payments offline?
- Do you want a backup local server?
- Would you like handhelds for ordering at the table?
- Would your restaurant benefit from kiosk-style self-ordering?
- Are your employees very tech-savvy?
- Do you want a system that works with the POS equipment you already have?
Test & Evaluate POS Customer Support
Be sure to test out and check reviews about any POS company’s customer support. Access to the customer service team is what your monthly fee covers, so you want to be sure they’re responsive.
- Do they respond quickly enough to resolve a problem before your business is impacted?
- Does their website have educational information, feature tips, and troubleshooting guidelines?
- If they have a forum or helpdesk, is it active? In other words, if you type a question, will a representative answer promptly?
- Is the support available during the hours your restaurant is open? For example, if you need assistance after midnight or on the weekends, will someone be available to provide it? Notoriously, that’s when problems tend to occur.
Remember that you’re paying for more than just POS software; you’re paying for the help to run that software.
Read User Reviews
Search online blogs, forums, and other social channels for user reviews of any POS vendor (don’t forget to check the comments sections on our restaurant POS reviews!). See what others say. What are the pain points and most common complaints? What’s not mentioned? What do happy customers say is the best thing about that POS system? Is updating the system a pain? Are there complaints or kudos about customer support?
Keep in mind that reviews should be examined from a big-picture perspective. In other words, don’t be taken in by negativity bias; if you read one negative review in the midst of dozens of positive, helpful reviews, don’t give too much weight to the negative. Look at reviews on public sites such as the BBB with the overall picture in mind. There’s always one bad apple trying to spoil things. That being said, it says a great deal about a company’s customer service if they address those negative reviews aptly.
Evaluate Ease Of Use With Free POS Trials
Most restaurant POS systems offer a free trial of the software. Take advantage of that opportunity to see how easy the software is to use. Run it as if it were in a live environment — take it on a test drive, to borrow an earlier metaphor. Include employees who will be using the software in the trial run, too. This will help you see if it’s easy for them to use and understand as well, and it might help you encounter potential problem spots. That’s the purpose of a test drive after all. You want to look into every nook and cranny, to try out all of the features, and run every alternative scenario you can imagine. Be absolutely clear about what you’re getting before you buy it. Leave no question unanswered.
During the test run, make sure to consider how steep of a learning curve the POS has. Ask your staff if it saves time or wastes time compared to your current system. Make sure you also estimate how much time it will take to train your employees on the new system.
Think About The Future Of Your Restaurant
Planning to expand? Change menus? Hire more staff? Think about what changes you plan to make in the next year or two and make sure the POS you want can accommodate those changes—and budget accordingly if those changes will mean upgrading to a higher plan tier. It’s generally way easier to upgrade to a better plan than to switch POS systems entirely; if you know you’ll need more features down the line, plan to accommodate that now. You’ll thank yourself later!
Which POS System Is Right For Your Restaurant?
Buying a POS system represents a big commitment of time and money, so you have to do your research before making a decision. You’re off to a good start by reading this post. Hopefully, now you have a better idea of how much a POS system costs and which features you need in a POS system for your restaurant. The time you spend researching your options is time you will save in the long run, because you’ll have the system and features that best meet your specific needs. If you need a little more help deciding, check out my post on the best restaurant POS systems to evaluate which of these systems might work well for your restaurant.