Things You Should Know Before Buying for a Restaurant POS System

A very important business tool for the restaurant industry is a Point of Sale (POS) system. Since a POS system uses handheld devices, errors and omissions typical of the manual order taking process are eliminated when an automated restaurant ordering system is used.

A very important business tool for the restaurant industry is a Point of Sale (POS) system. Since a POS system uses handheld devices, errors and omissions typical of the manual order taking process are eliminated when an automated restaurant ordering system is used.

Though having a Point of Sale restaurant is quite beneficial, the functioning and associated procedures of a POS system can be quite complex. Since implementing one is a substantial investment, you need to know what you’re getting into.

The following information might prove useful in familiarizing you, as a member of the restaurant industry, with POS concepts. Importantly, you’ll understand how your business can be protected from the usual pitfalls related to POS.

Get Familiar with Components and Costs

It’s important for you to know all the hardware and software components of your POS system. Some systems offer comprehensive functionality which others only the basics. When you are shown an initial demo, the system provider might use a lot of fancy equipment which may not be included in the quotation he provides. Ensure that he lets you know the pricing for all optional software and hardware that might not be part of the main quote.

In addition to this, make it a point to find out other affiliated charges such as license and installation fees along with possible recurring costs such as maintenance charges and fees for service level agreements (SLA).

By being well informed regarding how much total expenditure you’re in for initially as well as over a period of time, you can determine your total cost of ownership (TCO) and avoid any financial shocks later. 

Ensure clearly defined Service Level Agreement and Fee Schedules

The SLA which is a negotiated agreement between you and the POS System Provider enlists the provider’s obligation with regards to his services, responsibilities and warranties. Sometimes, even penalties are agreed upon in the event of SLA non-compliance. A clearly defined SLA will go a long way in avoiding potential misunderstandings in future, minimizing questions and providing necessary recourse.

In addition to the initial POS system cost, you will need to incur recurring charges for services given by other business partners such as credit card processing, online ordering, time and attendance etc. It is advisable to confirm the party providing each service. You also need to be clear about fees for additional services like upgrades, software and hardware support and staff training. Once you have a schedule outlining all costs and their recurrence, you can plan your budgets accordingly.

Know your Service Provider and Affiliated Financial Benefits

If you’re stuck in a non-profitable business relationship with your POS provider, it can have a detrimental effect on your restaurant’s operations. Before you actually sign a contract, make sure you know all options for terminating the agreement or payment processing and any other associated fees.

It is common for POS System Providers and payment processing companies to have revenue-sharing arrangements. Ask the POS System Provider to disclose financial benefits, if any, from such associations.

A System Provider may significantly bring down the cost of a POS system if you use the “processing services” of his company or increase it if you don’t. When processing is outsourced to an independent sales organization (ISO), the provider may charge more than the direct processor. Find out the additional services that you are getting from your System Provider which may not be available from the direct processor.

If you go in for a POS restaurant being well-informed, you’re sure to reap innumerable benefits. An organized workplace, increased revenues, happier customers and larger profit margins are only a few of them.

With over 10 years of experience in developing point of sale restaurant applications, the author of this article is a self made software developer, a good cook, and a globe trotter. She has developed different cloud based applications for restaurant ordering system that are being used by different hospitality industry players.

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