Are you looking for a new point of sale system for your hospitality business? If so, you’re in luck! In this blog post, we’ll provide an overview of what you should be looking for in a point of sale system (pos systems), as well as the benefits they offer. We’ll also provide tips on how to choose the right restaurant POS system for you.
As we hope you know by now, Pilla is a back of house operations software so we do not include any of the common features found in POS systems. The POS system you choose, will be used to accept payments from your customers, and Pilla will be used to carry out your back of house operations.
So let’s get started and take a look at POS systems and find out which type is right for you.
The importance of POS systems
A POS system, put simply, is a platform that allows your company to sell products to a customer. When selling to your guests, your installed POS system will accept payments via card, cash or other methods.
There are many benefits of using a POS system for hospitality businesses. Some of the key benefits include:
- Improved efficiency
A good POS system will automate many tasks which will speed up the sales process and improve overall efficiency.
- Reduced errors
By automating many processes, POS systems help reduce the likelihood of human error. This can lead to increased accuracy in sales reporting and financial statements.
- Accurate tracking of inventory
With accurate tracking of inventory, you’ll know exactly what you have in stock and when it needs to be replaced. This can help prevent stock shortages and overages.
- Increased customer spend
A good POS system will allow you to upsell and encourage increased average transaction value from your customers in organic ways.
Before the advent of modern POS systems, hospitality businesses would take payments with cash registers and cash drawers. While this system was effective at processing cash payments, it had a number of drawbacks. For example, it was difficult to track inventory and sales data with a cash register/cash drawer system. Additionally, it was difficult or impossible to take payments vis card or other methods.
Point of sale transaction types
When you’re looking for a POS system for your business, it’s important to consider the different types of transactions you’ll be carrying out. For the hospitality industry, the most common type of transaction is a sale. However, you may also need to process refunds, voids or tips.
Some POS systems may not be able to handle all of these different transaction types. So it’s important to check with the POS system provider before you make your purchase.
Customers will also be likely to want to pay in different formats as many more currencies are used worldwide and third-party companies offer intermediary payment solutions.
Card payments are by far the most popular type of payment. This is because they are fast, easy and secure. Most POS systems will accept all major credit and debit cards.
Cash payments are still popular, especially in countries where card penetration is low. Additionally, some customers may not have access to a credit or debit card. For this reason, your POS system should also be able to process cash payments. So you will still need to have a cash drawer of some type to store cash. However, the modern POS systems will still handle the payment processing in the background so your cash drawer store cash but you won’t need a traditional cash register to process transactions because this will happen within the POS software.
PayPal and Google Pay are both digital wallets that allow customers to make quick and easy payments with their smartphone. These wallets are growing in popularity, especially with younger generations. So it’s important that your POS system can accept these types of payments.
Similarly Apple Pay is a digital wallet that can be used with Apple devices such as iPhones. Apple Pay is increasingly become a popular choice for customers with so many iPhones on the market and the rise of the smart watch.
Gift cards are a popular way to encourage customer loyalty. Customers can purchase gift cards for themselves or for other people. And they can use the gift cards at a later date to pay for goods or services. Many POS systems will have the ability to process gift cards. However, some may not so it’s important to check with the POS vendor.
POS Hardware components
This is the physical part of your POS system. Different businesses will have different needs when it comes to POS hardware. The type of business, the size of business and even the location of the business will all play a role in determining which POS hardware components you need.
Displays product database and allows some additional functions, including staff clock-in or view sales data. Tablets, especially an iPad, are gaining popularity to replace larger screens like laptops.
- Barcode scanner:
Enables the automated check out. Barcode scanners gathers product information and add this information into checkout totals. There are three main types of barcode scanners: laser scanners, CCD scanners, and imager scanners. Each type has its own benefits and drawbacks.
Laser Scanners: This barcode scanner use a single beam of light to scan barcodes. They are very fast and accurate, but can be expensive.
CCD Scanners: This bar code scanner uses an array of sensors to scan barcodes. They are less expensive than laser scanners, but can be slower and less accurate.
Imager Scanners: The bar code scanner uses digital cameras to scan barcodes. They are the most expensive type of scanner, but they offer the best accuracy and speed.
- Credit Card readers
Credit card readers are an essential part of any POS system. They allow you to process payments from customers via credit or debit cards. There are a number of different types of credit card readers available, each with its own benefits and drawbacks. Let’s take a look at the three most common types of credit card readers:
Magnetic stripe readers: These are the most common type of credit card reader. They work by swiping the customer’s card through a magnetic stripe reader. The main downside of these readers is that they are as secure.
Chip readers: Chip readers are the newest type of credit card reader. They work by inserting the customer’s card into a chip reader. These readers are more secure than magnetic stripe readers, but they can be more expensive.
NFC readers: NFC readers are the most secure type of credit card reader. They work by allowing the customer to tap their card on an NFC reader. These readers are more expensive than other types of readers, but they offer the best security.
- Receipt printer
A receipt printer is an essential part of any POS system. They print out a receipt for the customer after a purchase is made, offering a printed receipt is still hugely preferred by customers although there is an increasing amount of customers who request a digital receipt.
There are a few different types of receipt printers available, each with its own benefits and drawbacks. Let’s take a look at the three most common types of receipt printer.
Thermal printers: Thermal printers are the most common type of receipt printers. They work by using heat to print receipts. The main benefit of these printers is that they are fast and reliable. The downside is that they can be expensive.
Inkjet printers: Inkjet printers are the second most common type of receipt printers. They work by using ink to print receipts. The main benefit of these printers is that they are less expensive than thermal printers. The downside is that they can be slow and unreliable.
Laser printers: Laser printers are the third most common type of receipt printer. They work by using a laser to print receipts. The main benefit of these printers is that they are fast and reliable.
Bear in mind, that many POS systems will offer the POS hardware as part of their offering so always check with the POS vendor to find out what is being offered.
Cloud Based POS
Traditional POS systems were entirely premised which meant the system used online servers and the application could be installed in only the specified areas within the stores or restaurants.
So, a standard legacy POS system was installed in the front office in a way that would have been difficult for people to move. In early 2000, Cloud based POS was introduced, which could be hosted off premises by an online payment system provider without an inbound server. The advent of Cloud based POS enabled mobility of information and data.
Nowadays, business owners can move their POS system from one place to another without worrying about the servers or the installation process. With a cloud-based POS system, all you need is an internet connection and you can access your POS system from anywhere in the world.
The main advantage of a cloud-based POS system is that it is much cheaper than a traditional POS system. You do not need to buy or maintain as much hardware, and you can scale your system up or down as your business needs change.
Another advantage of a cloud-based POS system is that it is much easier to use. There is no need for you to install or update any software, and you can access your POS system from any internet-connected device.
The main disadvantage of a cloud based POS systems is that it is less secure than a traditional POS system.
One step further again, a mobile POS system (mPOS) is a portable device that can be used to accept mobile payments. mPOS devices are usually small, handheld devices that connect to a smartphone or tablet via Bluetooth.
Mobile software have a number of advantages over traditional POS systems. Firstly, they are much cheaper than traditional POS systems. This makes them ideal for small businesses or businesses that do not process a lot of transactions.
Another advantage of mPOS devices is that they are much more portable than traditional POS systems. This means that businesses can take their POS system with them wherever they go and can be used on mobile devices, which is ideal for businesses that operate in multiple locations and wish to take mobile payments, especially hospitality operators who can use their POS system at pop up events and multiple locations through the entire business.
The main disadvantage of mPOS devices is that they are less secure than traditional POS systems. This is because they are often smaller and can be more easily lost or stolen.
How POS systems can help with inventory management
A POS software can help with inventory management in a number of ways. Firstly, it can keep track of what items are selling and how quickly they are selling. This information can be used to order stock and ensure that the right products are always in stock at the right times.
Secondly, a POS system can be used to track discounts and promotions. This information can be used to ensure that the correct items are being offered to the right audience and that your marketing is inline with with your inventory. management strategy.
Thirdly, a POS system can be used to generate reports on your inventory management. This information can be used to identify trends and help you make decisions on what items to stock and when to stock them.
Inventory management is not included in all systems so ensure that your new POS system does include this feature is it’s something you are looking for.
How a point of sale system can improve customer relationship management
Firstly, it can capture customer information at the point of sale. This customer data information can be used to segment customers and send them targeted marketing material. This is particularly useful if you have multiple store locations and you wish to target customers with location specific content.
Secondly, POS software it can be used to track customer spending. This information can be used to identify your best customers and offer them loyalty rewards.
Thirdly, POS software it can be used to generate reports on your customer relationships. This information can be used to identify trends and help you make decisions on how to improve your customer relationships.
Using POS software in a brick and mortar store and your online store
If you have a brick and mortar site, your POS terminal will be used for payment processing using the POS hardware which we have discussed. But your POS system can be used to process payments for online stores.
Many hospitality business have diversified during the last two tears and now have an online store operations as part of their strategy to serve customers is many ways as possible. The lines between a traditional retail business and a business in hospitality are now less clear as all businesses look for new sales opportunities and revenue streams.
This is done by connecting the POS system to a payment gateway, which will then process the payments. The payment gateway will then send the payment information to the merchant bank, which will then process the payment.
The advantage of using a POS system for online payments is that it is much faster and easier than using a traditional payment processor. This is because the POS system can be used to process payments for multiple transactions at the same time.
How POS can streamline your finances
Your POS system calculates your sales tax for you and submits it to your accounting software. Each POS transaction will be attributed with the correct tax code (based on your business) and the POS app will collate this information based on each product type. This is particularly useful for example, if you have products which have different tax codes, as you no longer have to manually think about which tax should be applied to which product.
How much does a POS system cost?
The cost of POS software will depend on the features you require. A basic system with just the core features can cost as little as £50 per month, but if you need more advanced features, such as inventory management or customer relationship management, then you should expect to pay much more.
Some businesses opt for a monthly subscription model, which can be more expensive in the long run, but gives you the flexibility to upgrade or downgrade your POS software as your business needs change.
You should also factor in the cost of hardware, such as a POS terminal, barcode scanners and receipt printers. These can cost anything from a few hundred pounds to several thousand pounds, depending on your requirements .
When choosing a POS software system for your business, you need to consider your specific needs. For example, if you run a restaurant, you may need a system that can handle table bookings, reservations and payments, but then again, you may have a different system which handles this so you don’t need these features.
You should also think about whether you need a cloud-based or on-premise solution. Cloud -based solutions are usually much easier to set up and use, but they can be more expensive in the long run. On-premise POS systems are usually more expensive to set up, but they offer more flexibility and scalability.