HT Essentials: What You Need to Know About Sourcing a New POS
The point of sale (POS) system is truly the backbone of a restaurant’s tech stack. It has evolved from its original role as an enhanced cash register to become a central hub for transactions, operations, and guest experience — integrating everything from order-taking and payments to loyalty programs, labor management, and real-time data analytics.
Daniel Connolly, Dean of the School of Business at St. John Fisher University, explains, “For a restaurant, the POS is a critical and essential system to maintain smooth operations. It can play important roles in increasing sales and server productivity, enhancing the guest experience, and providing valuable information to inform management decision-making. To a large extent, the POS is the nucleus of the restaurant tech stack because, among its many capabilities, it records and tracks all revenue transactions and connects to a restaurant’s back-office accounting system.”
“HT Essentials: What You Need to Know About Sourcing a New POS” is designed to help restaurant operators navigate the fundamentals of POS technology, evaluate key features, and implement a system that best suits their goals and business model.
Understand the Core Functions of a POS
Before reaching out to potential POS solution providers, restaurants should understand the core functions of a POS and the potential features available. Case studies and other data-driven, real-life accounts of POS implementations and their KPIs can help a restaurant understand its particular POS must-have vs. its nice-to-haves (for more on that topic, see sidebar, below). Here, we share some of the essential functions and features you'll likely consider.
Transaction Management
At its most basic, a POS system must process sales transactions quickly and securely. But today’s POS solutions go beyond simple cash, credit, and debit card processing by offering support for:
- Mobile wallets, contactless payments, and even biometric payments such as face recognition and palm recognition
- Integrated tipping and check-splitting
- Multi-location order routing (to different kitchen stations or printers)
Order and Menu Management
A robust POS system should integrate seamlessly with the menu and enable restaurants to:
- Customize and update menus in real-time
- Manage pricing adjustments for early-bird specials, happy hours, promotions, and more
- Sync menu changes across multiple locations and online ordering platforms
Customer Relationship Management (CRM) & Loyalty
“Many POS platforms now function as the entry point to the loyalty journey.” Tom Seeker, CTO of Ziggi’s Coffee, notes. POS-driven loyalty programs enable restaurants to implement important customer experience initiatives, including the ability to:
- Track guest preferences and order history
- Offer personalized rewards and promotions
- Integrate with email and SMS marketing platforms
Must-Have vs. Nice-to-Have Features
An essential component of your RFP process is to evaluate which features and functions your brand needs from a POS, and which may be optional for you. While this equation will be different for every brand, the following is a common breakdown:
Must-Have: Order and payment processing, menu management, labor tracking, and reporting
Nice-to-Have: Inventory management, direct third-party delivery integrations, and automated scheduling
Labor & Time Management
Seeker also notes, “In recent years, the time clock has been added.” With labor costs traditionally being one of the biggest expenses in foodservice — and raising significantly in the current economic environment — modern POS systems help restaurants optimize staffing via:
- Integrated time clocks and scheduling tools
- Performance tracking for servers and staff
- Compliance monitoring for labor laws and overtime
Inventory Management
While inventory management has always been a key component of restaurant operations, it is more relevant than ever as operators face supply chain uncertainty and rising costs. Some POS platforms now include inventory tracking to reduce waste and control food costs by:
- Automatically deducting ingredients as menu items are sold
- Sending alerts when stock is low
- Generating reports on food usage and cost trends
Cloud vs. Server-Based POS: Which is Right for You?
Historically, POS systems required on-premise servers, but cloud-based solutions are now the industry standard. According to Connolly, “Today, we are seeing more restaurants and POS vendors shifting to cloud solutions. Cloud solutions offer several advantages over server-based systems. These include lower upfront costs, reduced infrastructure requirements, and the ability to transfer maintenance, backups, security, and upgrades to professionally trained IT teams.”
For a detailed cheat sheet, see the chart “Comparing Cloud and Server-Based POS,” below.
Seeker offers a key clarification: “Many newer POS systems are utilizing the cloud as the focal point. However, it’s somewhat of a fallacy to think that a cloud-based system does not have a server. Most, if not all, make the primary terminal a server when the POS loses connection to the cloud.”
Takeaway: Cloud-based POS offers scalability and lower maintenance costs, but it’s critical to ensure the system has offline capabilities to prevent service disruptions.
Key Considerations When Choosing a POS
When reaching out to potential POS vendors, the following consideratons should be part of the conversation, touching on not only immediate needs but also with an eye toward future goals and challenges.
Integration Strategy
A POS must work seamlessly with other restaurant technologies, including:
- Online ordering platforms
- Payment processors
- Inventory and accounting software
Brian Pearson, CTO of Mendocino Farms, emphasizes the importance of vetting integration capabilities, “What is your integration strategy? How long does it take a new partner to integrate with your platform, and is it an open Integration?”
Vendor Reliability & Support
Not all POS vendors are created equal. Pearson advises asking: “Can I talk to 2-3 customers of my size about their support satisfaction?”
Before committing, ensure the vendor provides:
- 24/7 support
- Regular software updates
- Clear service-level agreements (SLAs)
Scalability & Future-Proofing
Your POS should grow with your business. Seeker warns, “It’s critically important for anyone considering a POS system to not just consider the current journey of the business. Quite often, mergers and acquisitions can come up last minute. Ensure you choose something robust enough to do what you need but capable of supporting growth.”
Total Cost of Ownership
Beyond the initial investment, consider:
- Subscription fees
- Transaction fees
- Hardware replacement costs
- Support and training expenses
- HT’s Checklist for Sourcing a New POS
A restaurant’s POS system is a strategic investment that drives sales, enhances customer experiences, and streamlines operations. Here, we summarize the key considerations and steps necessary to sourcing a new system:
Define Your Needs
- What service model are you running (QSR, fast casual, full service)?
- Understand the core functions of a POS (transactions, order and menu management, CRM and loyalty, labor, and inventory)
- What are your must-haves?
Research & Compare Vendors
- Read case studies and customer reviews
- Ask vendors about key considerations (integration strategy, scalability & future-proofing, total cost of ownership) and the ongoing support options they offer
- Consider cloud versus server-based
Request Demos & Trials
- Test ease of use, reporting features, and reliability
- Ensure staff can be trained quickly
Plan Implementation & Training
- Schedule downtime for installation
- Train staff on workflows and troubleshooting
Monitor & Optimize
- Use data analytics to track sales trends
- Adjust features based on staff and customer feedback