The success of any restaurant depends on the efficiency and overall strength of its management. Mismanagement of any aspect of a restaurant’s operations – from inventory tracking to shift schedules to food costs – can lead to its eventual downfall. Conversely, innovations in efficiency utilizing a restaurant management system can lead to lasting success.
Fortunately for restaurant owners today, technology has significantly advanced the restaurant management landscape. From the early days of electronic cash registers through the spread of Internet usage in the ’90s, and into today’s touchscreen and smartphone landscape, the point-of-sale systems have evolved to meet and sometimes even anticipate the needs of users. You can find our updated list of the top POS systems for restaurants here.
Table of Contents
- 1 What is a Restaurant Management System?
- 2 Top 12 Restaurant Management System Must-Have Software Features
- 2.1 1. Cloud-Based
- 2.2 2. Easy Menu Configuration
- 2.3 3. Tracking of Taxes and Sales
- 2.4 4. Inventory Management
- 2.5 5. Integrated Credit Card Processing
- 2.6 6. User-Friendly Order Processing
- 2.7 7. Loyalty and Reward Programs
- 2.8 8. Employee Management
- 2.9 9. Detailed and Accurate Reporting
- 2.10 10. Gift Card Integration
- 2.11 11. Exceptional Technical Support
- 2.12 12. Comprehensive Training
- 3 Final Thoughts
What is a Restaurant Management System?
A restaurant management system is a collective term for software and hardware used to improve restaurant management by streamlining operations. The software functions addressed by such a system include table bookings, managing online reservations, directing incoming orders, reducing order processing times, inventory management, automating redundant work, sending marketing campaigns, and much more. If you’re not sure how a POS works, here’s our definitive guide to the meaning of POS.
A restaurant management system is the complete stack of technology, restaurant software, and marketing modules needed for the proper management of food business operations. It takes over the marketing and services of the business.
If you would like to invest in such a system for your restaurant, here are 12 must-have restaurant management system features:
Top 12 Restaurant Management System Must-Have Software Features
Cloud-based online restaurant management software manages data incredibly efficiently. It allows you to pull data from remote servers rather than local servers. Restaurant management systems used to operate offline in the past – this translated to high installation costs and data was stored in local servers, which is a high level of risk from a security and data storage perspective. Some cloud-based options also offer the ability to be mobile along with many other benefits of using mPOS for restaurants.
Today’s cloud-based software for restaurants operates from remote servers unlike traditional Point of Sale (POS) systems and has zero setup costs. The only costs are a monthly fee for the renewal of the service. The systems also integrate with Customer Relationship Management (CRM), Analytics, Inventory Management, and Loyalty Management thus making them more comprehensive and complete.
2. Easy Menu Configuration
It should be easy to configure and set up the menu on your restaurant management software. While this might sound like a no-brainer, it is a significant consideration. Today, numerous systems on the market may threaten to make your life hard when you need to do something as trivial as updating the menu or prices.
You might be surprised to learn that with big brand name POS providers, you might have to contact the support department to make changes to your menu or be a genius in programming to figure out how to do it yourself. In some instances, you might find that you have to reboot the server or point of sale terminals to make minor changes to the menu. You don’t need such headaches.
It is essential to ask the POS company to show you how easy it is to adjust the menu programming or prices before you buy the software. See additional questions to ask when buying a restaurant POS. If it takes more than a couple of minutes to change the prices or menu programming, it might be better to consider other options. Also, many of the newer hospitality software offers cloud-based menu and pricing configuration so you can make changes anywhere you have an internet connection.
3. Tracking of Taxes and Sales
Restaurants typically handle a lot of cash and credit card transactions. Good management software for restaurants should, therefore, make it easier for you as a restaurant owner or manager to track all sales records to the very last penny.
The sales reporting acquired can help you keep inventory on all the items you sell, which will help you make better-informed decisions regarding your business. For instance, it will help you make the adjustments required to your menu depending on the worst or best items sold, determine who the best servers are, and know the most popular hours for your business. Best of all, you can find out if you’re making a profit or not by reviewing your sales records.
Successfully running a restaurant requires keeping accurate tax records, particularly for your state or local alcohol and business requirements for taxes. As an example, some states have other fees besides a standard sales tax that must be reported, like an alcoholic beverage tax.
It is essential to work with a competent restaurant accountant who knows the applicable local tax laws and tax tables to ensure that your restaurant management software has all the reporting that you need to be compliant.
The good news is that the vast majority of POS systems offer tax reports and comprehensive sales reporting. The challenge is making sure it meets your requirements beforehand. It’s a great idea to ask the POS company of such systems to show you an example of the backend of the software so you can see what the reporting looks like in advance.
Also, if you use a 3rd party accounting software, like Quickbooks, you’ll want to make sure the software has integration functionality or at the very least the option to export and import sales data.
4. Inventory Management
Opening a restaurant is expensive. Any decent restaurant management system should have inventory control with par level and purchase order capabilities.
The vast majority of POS software used in the food and beverage industry have options for reducing product from your inventory whenever you sell an item and the ability to replenish with purchase orders from food vendors.
The food management software must be configured to maintain your product inventory. For instance, if you sell a steak dinner, the POS system should be programmed to deduct the steak from your menu.
If you wish to control by the plate, you may even subtract the sides from a dish, such as reducing one steak, one baked potato, and 8oz of coleslaw from each plate you sell. The restaurant software needs data input first to know how much product you currently have in stock to work accurately.
It is always important to know how much food you have at any given time and to set a par level. By establishing a par level (a baseline indicating it’s time to reorder food, so you don’t run out), you will know that when you’re down to your minimum level of steaks, baked potatoes, and coleslaw, and that’s it’s time to reorder from your food vendor.
Inventory is also critical since you need to have a solid understanding of your profit margins, which begins by monitoring the usage and costs of your food. For additional reading, visit 5 tips on how to reduce your food cost. You’ll even know what your hot selling items are so you’ll be sure you never run out.
It is important to note that some restaurant POS systems will have only basic inventory management features. Some restaurant systems on the market only offer third-party integration with software to facilitate a more robust inventory, which means it is likely going to add to your costs. So be sure to verify with the provider that the restaurant management software has what you need and find out if you need an additional third-party solution.
5. Integrated Credit Card Processing
Today, running a cash-only business is the worst thing that you can do. Studies have shown that the vast majority of people that visit dine-in establishments prefer using a credit or debit card to pay with only a small minority preferring to use cash. Yes, there are fees associated with accepting credit cards, but that is the cost of doing business. If you don’t take credit and debit cards, you are missing out on many opportunities for increasing your profit and growing your business.
You need to accept credit and debit cards as payment options, and for this, you will want to have this integrated into your restaurant management software. You will also have to accept EMV (chip-and-pin cards) due to POS system PCI compliance standards to protect customer data as well as provide chargeback protection for your company. According to Visa, chip technology helped reduce card-present counterfeit payment fraud by 80%.
Also, according to this consumer payment study by TSYS security is top of mind and critical to consumers due to the fear of data breaches. So, it is vital to ensure that your restaurant management system is compliant based on PCI-DSS standards and ready to accept EMV credit cards. If you have older restaurant software, this could be a serious issue that needs to be addressed.
An essential consideration when it comes to credit card processing integration is the company that you will be using. Fortunately, some POS companies do the processing too, which can be of great benefit to you. If the restaurant POS system is with one company and a different company handles the processing, you can expect to make multiple calls when it comes to dealing with processing or support issues.
Also, some providers will subsidize the cost of your new point of sale if you process your credit cards with them, so it’s something to consider if you’re a new business or replacing an existing system.
6. User-Friendly Order Processing
The order management software should be simple enough for both management and servers to use. There are many tasks your staff will need to perform quickly such as transferring tickets, changing tables, splitting checks, changing item prices, changing item quantities, repeating menu items or drink orders, adjusting gratuity or taxes, tracking reservations, and managing tables.
On the POS terminal with security credentials, restaurant managers or owners should be able to perform all management duties including controlling comps, voids, refunds, and monitoring order status.
For a busy restaurant with a bar, you need the ability to perform preauthorizations by opening a tab – this needs to be a natural, fast, and reliable process. Preauthorization or pre-auth refers to a specific dollar amount put on a credit card until the payment is complete. A pre-auth will verify that the card is real and that the customer can cover the bill.
A user-friendly solution that allows you to swipe the customer’s credit card is convenient for your staff and the customer. A not-so-friendly restaurant ordering system will require manual input to create a tab or not allow you to create a tab at all, and that will delay order processing. Also using slow or unreliable hardware can kill the speed of a busy bar and restaurant.
By participating in an online or onsite demonstration of the restaurant management software, you’ll get a good sense that the order process is user-friendly. If the user interface requires multiple steps to perform simple tasks or is confusing to navigate, this will slow your operations down and cause errors, which you don’t want.
It is essential to take the time to see a demo or get a trial of the software to confirm that the interface is easy to use and intuitive for management and staff. You can also ask other restaurant owners or managers that own a similar system you’re considering how well they like it and if they can offer a personal recommendation.
7. Loyalty and Reward Programs
To be competitive in the hospitality business, you must have marketing, loyalty, and reward programs in place to get new customers through the door and to keep customers coming back. You might have the best food and service in your city, but if your competition is engaging with customers and offering a better deal for being loyal, you’re probably losing business.
Most restaurant software will have some built-in loyalty or reward program, but depending on your business type and customer profile, that might not be enough. For instance, you may want to send out notifications about new loyalty programs to your customers through social media channels to communicate and engage with your customers.
Not all restaurant point-of-sale systems will offer this ability, so you may need to use a third-party marketing software. Having the ability to ask what type of rewards your customers want is priceless and people will provide feedback on social media, whether you like it or not.
If you’re able to integrate your loyalty program into your restaurant’s webpage so customers can check their balances, it’s a nice feature to offer your customers. As an example, a restaurant application like the Toast POS system offers the ability to add loyalty and gift card features to your website. If you need some website inspiration to see how other restaurants include their loyalty or rewards programs, here’s a list of amazing examples of website design for restaurants.
So you’ll need to research and determine which loyalty program is best for you. Also, you’ll want to make sure it’s a mobile platform that integrates into your POS and has social media capabilities. Nearly everyone has a smartphone and can download your App or use the loyalty App to keep track of sales and rewards. If you’re still using punch cards or scan cards, then you’re most likely out of touch with the different generations.
8. Employee Management
Payroll can be a major pain point when running a restaurant. With multiple employees working different shifts, you need a way to keep track of employee time and process payroll. Most point-of-sale systems offer features for employee management. However, the depth of the features will vary depending on the software.
At a minimum, you’ll need the ability for your staff to clock in and out, and to track employee hours in the system. If you’re using a third-party company to handle your payroll, then you should be able to provide this information to them through your POS reporting.
Some restaurant software may include additional features like employee scheduling where you can assign shifts and prevent scheduling conflicts. There can even be security measures in place that prevent employees from clocking in if they’re not on the calendar to work that day. Also, with a scheduling feature, it may allow your employees to request shift changes for coverage if there is an emergency, for example.
Some additional employee management options will enhance the security of your business and your workers. An example would be setting security permissions and access levels to prevent access to forbidden areas and to prevent tampering.
As far as reporting, you should also be able to get the data you need to know which servers are performing the best and who isn’t pulling their weight. Also, you’ll want to identify when you’re the busiest, so you can staff adequately.
Keep in mind, that not all employee management software is created equal. You’ll want to have this process mapped out as far as the specific requirements to track time and pay your staff. So you’ll want to think about the features you need and ask what’s included since you must have this function in your POS.
9. Detailed and Accurate Reporting
The most importing reporting data that restaurants need to get started is accurate operational sales reports. Without this, you’re doomed to frustration or failure. Tracking your operational sales data is essential. However, analytical information is going to be more critical to growing your business.
Basic operational sales reporting isn’t enough when it comes to discovering inefficiencies. You’ll need to analyze specific reports in your POS, specifically your inventory reports, labor reports, and sales reports. There are subsets and metrics within these individual reports that are equally vital.
But for the purpose here, we want to iterate the importance of accurate data to find ways to minimize losses and to better your restaurant. If you have a POS system and the reporting isn’t correct, you’re just asking for trouble, and it’s time to make a change.
You’re running a real business, so you need the information at your fingertips that will give you more control over your company. For instance, with detailed reporting, you can discover staff productivity issues, find food cost problems, identify hot selling items, and determine the best times to run promotions or offer discounts.
These are just a few examples, but suffice it to say, it never hurts to have more data than less. Also, some software will give you the ability to configure custom reports with filtering options – this is always a good thing, as long as the numbers are accurate. The first time you filter your sales reports to identify specific issues or trends in your restaurant that help increase profit, this all starts to make sense.
Your customer database will hold invaluable data for reporting, so this is a feature you must have as well – this can be data from your POS or your loyalty software (as discussed in #7 above), but you need to identify the products your most loyal customers buy and how frequently they purchase from you. With this analytics, you get great insight into buying patterns that help you make smart decisions when offering specials or loyalty programs.
We recommend that you have access to your reports via the cloud so you’ll always have access to your data no matter where you are. By analyzing all the data from your restaurant, you will find ways to improve and grow your business. Try doing this with an old-school cash register.
10. Gift Card Integration
Integrated gift cards are a feature you absolutely must have to capture new business, get existing customers back through the door, and boost immediate revenue.
You increase your revenue by selling the gift card upfront, so if somehow the gift card gets lost and isn’t redeemed, it doesn’t matter because you still made money. The other side of this is, that when the gift card is used, you’ve already accounted for the revenue.
According to a Prepaid Consumer Insights Study released by First Data, the average consumer will spend $38 more than the value of their gift card. The study, which is based on the responses of more than 2,000 U.S. consumers, also found that 44% of consumers visit a store they would not have visited otherwise because of a gift card, and 53% are likely to visit a store more often as the result of receiving one.
What does this mean for you? Well, it’s pretty obvious that by offering gift cards you can gain new customers and customers will spend more than the value of the card balance that was sold to them! It’s another no-brainer feature you need in your restaurant management software to secure an additional competitive advantage and increase revenue.
Some restaurants will also give loyal patrons pre-paid gift cards instead of coupons because they know that the customer will spend over the balance. Gift cards can also be a more cost-effective solution compared to expensive coupon promotions or marking campaigns. It’s a great place to start when promoting your brand and most POS systems will offer integration with physical cards. You must have this feature integrated into your POS to keep your sales records nice and neat.
11. Exceptional Technical Support
You will need and want the best possible technical support when it comes to your restaurant management software, trust us. If the company doesn’t offer a 24/7 hotline for assistance, run don’t walk, and find another provider.
What can happen if you purchase a point of sale from a POS dealer instead of directly from a POS company, the dealer will be responsible for support. If it’s a small local reseller, you are at the mercy of this small business for help. If they’re not available after hours or on the weekend, you could be in big trouble if something goes down. Do you like handwriting tickets? We didn’t think so.
The good news is that most companies understand the importance of supporting their customers and will offer support as part of the package. For instance, most, if not all of the SaaS (Software as a Service) companies will provide 24/7 support as part of the monthly subscription service.
If you go a different route and purchase the POS hardware and software upfront, be sure to ask what is included with supporting your business.
Something we always recommend is calling the company’s support line before making a purchase or signing up with a cloud-based provider. Let them know you’re considering their system and you’ll find out immediately what you can expect as a customer. How long does it take them to get on the line? Are they responsive and friendly to your questions? If you don’t have a good experience by calling the support line ahead of your purchase, you’re not going to have one afterward.
12. Comprehensive Training
To get the full benefits of your restaurant management software, you and your staff must receive detailed training on the features of the software and on how the system operates – this includes front of house and back of the house.
If you’re able to secure onsite training (paid or otherwise), even if it’s just an introductory session on the system, this is ideal. Having someone on hand to show you how to operate and use the features of the software will significantly reduce the time it takes to learn everything.
If an onsite training session isn’t possible, then your next best option is to get an online or remote training session. You won’t learn everything the first time through, so make sure you have a lifeline number when you have questions or issues. Some companies may only offer online training videos, so it depends on your technical prowess and experience. But either way, you must have adequate training, so be sure to ask how it is handled with your solution provider.
At a minimum, you can expect to spend one to 3 hours learning the front end and back end of the system. Don’t wait until the last day to learn how to use your new management software. Your procedures for operating need to be established in advance of going live.
If not, you risk crashing on opening day. So you and your staff may need to do some live training before working with real customers. Some restaurants will do a “soft opening” with friends and family to put everything through the paces before officially opening the doors, which is a great idea to consider.
Investing in and buying a restaurant management system is the right move for all restaurant operators since it is critical to smooth operations and boost profit.
If you implement a solution that provides an enterprise view of data, features business reporting capabilities, integrates seamlessly with other business systems, and is built on a cloud-based platform, your business is on the path to success.
If you are thinking about investing in restaurant management software, you now know of the top features to consider in your research. You should also find a reputable reseller or provider of such a system based on the criteria outlined here to avoid any unnecessary interruptions in your operations. Another option is to hire a restaurant consultant to help you make the right decision.