Which POS System Should I Use in My Restaurant?

Hey there restaurant pros, it’s David Scott Peters and welcome to episode 53 of the Restaurant Prosperity Formula. I’ve been coaching restaurant owners since 2003 and the Restaurant Prosperity Formula is based on what the most successful restaurant owners I’ve worked with do on a daily basis to achieve their success. The basic premise of the formula centers around achieving prosperity, freedom from your restaurant and the financial freedom you deserve. To achieve prosperity, you have to follow a very specific formula made-up of leadership, systems, training, accountability, and taking action. Today’s topic, I’ll attempt to answer the question. What is the question you ask? What POS system should I buy?

I bet this is 1 podcast you’re sure to listen to from the start to the very end. Let’s get started. There’s one question I get asked routinely, and that same question finds its way into my group coaching calls at least a few times a year, or at least some variation or version of it. And that question is, what POS system should I get? Let me lead with, I can find you 500 people who love a system. and I’ll find you 500 people who hate that same very system. Most people’s opinion have been formed based on the service that POS company or their local dealer has been providing them. It’s not so much the actual POS system itself.

Now with that said, before I answer the question of what POS system should I get, let’s talk about what a good POS system should do for you. Above and beyond the obvious of sales transactions, recording those and taking payments, There’s a short list you must consider when looking to invest so much money in a POS system. Here are some features you should think about when looking at a POS. Number one, will it take cash, credit cards, and gift card transactions? See, this seems to be really a no-brainer when you think about it. Of course it’s got to take cash. Of course it takes credit cards. But when you think about it, the intention of your POS system is sales transactions.

But you’d be surprised how many POS systems don’t take gift cards, or it’s an external system and it doesn’t tie in so well and it’s like an external batch. So this is something to consider. Number 2, does it have a timekeeping module? we don’t want an external timekeeping, like a different software package, a time clock or anything like that. We want it in the same darn system because we need those numbers. See, it’s extremely important because not only is it reporting hours for payroll, but when it connects to your sales, you can easily see when to cut somebody. Like look at your half hour by half hour or say a system like Toast every 15 minutes.

You can see that you’re not selling anything, even if the dining room was full, which means we could be the end of the night, you should start cutting people now because they’re sitting there, you’re full, you visually look full, but you’re not producing sales. So we can start to get ahead of labor cost. You can see basically when your what your labor cost is running from day to the rest of the week. See, timekeeping in your POS system is critical, giving your managers a tool to go right to and see and assess where you are. Number three, Does it have these following reports? A DSR report, daily sales report. The daily sales report is something comes up at the end of the day when you close out all the tickets are closed and you know what.

the cash sales were, Visa, MasterCard, American Express, Discover, if you had any coupons, sales tax collected and sales by category. This allows me to make sure that every penny makes it to the bank. I know what I should be gathering and I’ve got all my numbers for all my other systems. Another report is the comp or discount report. This report allows you to track any promotions or discounts you’re giving. Basically on a daily basis, you’re discounting, whether it’s an employee meal 50% off, a manager meal 100%, or you’re running some sort of coupon or promotion. You want to see how effective each One of those discounts are, so you need to track them individually. And your POS system gives you the ability to do that.

You get to see basically what kind of issues you may have if you’re comping because you have bad food or burned something or you’ve got slow service or poor service. And now because you put it in your POS system in the right bucket, if you will, you can run a report on a nightly basis, weekly basis, monthly, whatever works for you to see what you need to work on, what’s robbing you of your profits. Another report would be the transfer report. And this transfer report allows you to see items have been transferred from one ticket to another or to a completely different employee. It’s critical.

It’s going to allow you to catch employees who might be stealing, where they’re moving an item from a ticket that’s going to be closed out with cash into another ticket to another ticket that is closed out by cash. because what it does is reduces the amount of money you’re expecting in that ticket when they close it to 5, $10 is theirs to keep because they just keep moving it from one table to another. Now I will tell you with that one it may ultimately be smartest to not allow them to do so without a manager swipe. This way you keep honest people honest. How about a void report? The void report allows you to see if you have a training issue or possibly theft behind your bar for instance.

So If you look at your void report and you’ve got bartenders that are ringing up tickets and then they hit void, what that often does is voids the transaction, opens the drawer, almost like a no sale. But to a guest, if they’re paying cash, they will get the change in return and that bartender is going to keep track of how much money is in that drawer that they’re going to take out at the end of the night. So if I look at these void reports and I confront my bartender to say, hey, why you voiding these transactions, well, they were asking prices. Oh, then you’ve not gone through training or need to go through training again. So I’m going to take you off the shifts and put you through training again.

See, our goal is not to catch somebody like you’re stealing, you’re out of here. It’s to prevent them from, to say we are looking. Now, What about no sale report? I’m going to tell you again, I think you should get rid of the no sale, the key on the POS system. If any POS system worth their salt, when somebody hits no sale, the whole screen is red and says no sale in huge letters. Why? Because it says I’m stealing. But with the no sale report, the reason why we have it is it opens up the cash drawer. Often for the servers who have a $20 bill who want to break it when they collect money from their first table because they don’t have change on them. They’re supposed to, but they don’t.

It’s to give change for the pool table or vending machines or whatever it may be. Well, I’m going to tell you right now, get rid of that. Because again, what happens is you can ring up a complete transaction, hit no sale, and it voids it. So, we want to make sure that we train people what the prices are and take away their ability to steal. Now, I’m going to tell you that this report is critical to identify those who are stealing, but only with customers who pay cash, so it’s much harder to find because the majority of people are paying with credit card, but keep it in mind. It should have a report called the Item by Item Sales Mix Report, also known as a PMix Report, a Product Mix Report, a Velocity Report.

How many items did I sell of each item that I sell to my customer? Well, this is really important when it comes to making real change in your business. This report, in fact, is king. See, when you combine the count of each item that was sold with Basically your current up-to-date accurate recipe costing cards and what you sell each item for, you’re going to immediately know what your ideal or theoretical food cost is. You’re going to be able to say, hey, my food cost should have been 30%. And a rockstar kitchen will run two points above ideal. A standard, most kitchens run 7 to 9 points above. But let’s say I can measure and say, oh, we’re doing a good job or not, right?

But I can also use that data to re-engineer my menu, make changes, decide what I’m going to raise prices, what items I’m getting rid of, what items I need to change to the recipe card or buy smarter, better quality or light quality product at a cheaper price, change portions, you name it. With science, I can change my bottom line the first time through anywhere from three to seven points. This is incredibly important. But also with that PMIX report, if you’ve tied it to your POS system and then tied it to recipe costing software or food and beverage software, well, then we run what I call an, I don’t call, it’s called an ideal to actual product usage report.

And based on inventories and all this information, you’re going to be able to find out that You should have used 350 pounds of ground beef. You used 400 pounds. What’s the problem there? Instead of why is your food cost high? I don’t know. It’s you can highlight items and go fix this problem. Huge. A report you also need is a labor summary report. Now this is not the labor report with all the employees and the hours worked and so on. It’s a summary by position. Servers, bussers, cooks, prep cooks, you get the picture. This report is going to tally the regular hours and regular pay, overtime hours and overtime pay.

This is critical to use these numbers to be able to schedule on budget when you tie it in with my system called the Restaurant Payroll Guardian, otherwise known as a labor allotment, where we tell our managers how many dollars and how many hours more specifically they can spend to go into next week on budget, a proactive management tool. I cannot utilize that without this report. Extremely important. Need A timekeeping report. Remember I wanted you to use timekeeping inside your POS. This report is imperative to proper record keeping by state or federal. Like if you’re in the state of California, they better be punching out and punching back in when they take breaks to prove they took a break. That is required.

So it keeps you out of hot water. It also makes sure you’re paying people properly. This is critical, especially when you start talking about submitting these hours to payroll and making sure you’re not underpaying somebody or overpaying somebody. Now, this is a report people don’t often think about. You need to be a large enough restaurant. Most of you fall into this. You need to have an 8027 tip report. This keeps track of all the information for your actual IRS 8027 tip report. This is where we report how many directly tipped and indirectly tipped employees we have, what our cash sales were and cash tips, our credit card sales and credit card tips.

It allows the government to kind of keep track of us to make sure they’re getting their money. Well, the truth of the matter is, while that needs to be filed every year, it is difficult if you don’t have this report. Otherwise, you’re going to use a sampling that was approved by the Supreme Court that has a 31-day sampling for every year, except for a different one for leap year. And I’ve done it. is not any fun. And that’s for only my people here in the United States.

Number 4, the number one thing you must research before purchasing your POS system like literally making sure you understand what kind of support they offer meaning the POS dealer which is a local or the POS company if somebody who is centralized because it’s not if it’s when your POS system goes down in a busy Friday night and you you you’re in the middle of it and it falls down it’s They’re computers. It’s software. I can guarantee I don’t care how good or bad you think your POS system is, they all do it. Hopefully not too often.

Or how often somebody burns a cable and you lose a receipt printer or somebody dumps a drink in a receipt printer and all these different things that you need to have support like this because your restaurant’s not going to shut down. You’re in the middle of Friday night. You need to be able to keep your business going. So having the right service, and I will tell you this is probably one of the biggest things you need to look for above and beyond anything else, is will they be there to support you? The next thing to consider is obviously, I should say obviously, cost.

We’re all on a budget and there is a big trend, a change in the industry going from stationary POS systems where you buy all the equipment up front to those that are cloud-based that are leasing you the equipment on a monthly basis with a monthly payment. So depending on where you fall, that’s going to hit you differently. What have you budgeted for this purchase? So ask yourself, am I somebody who’s used up all my cash and I’ve got to put myself in a position where I’ve got to go with somebody who’s going to give me monthly payments and I don’t have to come up with cash up front? Or did you put it in your budget and your plan is I don’t want to be beholden to somebody on a monthly basis. I want to be able to pay for it up front.

Well, the traditional higher price POS systems, those companies that have been around a long, time, have been and still do charge a premium for their software, hardware, and ongoing support. And many POS systems in the next level down are equally as good as this top tier or top level or more expensive the traditional POS companies, but they’re less expensive. Then there’s an entry level for POS systems. And for the most part, they’re not worth it, even if you’re looking at, running a small restaurant because they don’t have the reporting capabilities that I outlined earlier. So in a nutshell, when buying a POS system, you got to know your budget. You need to figure out, does this POS system have the features I’m looking for?

Does it have the reporting, right, that I need to run my business, especially if you’re following my systems? Do you have the support when it goes down on a Friday night? Because once you’ve done your research on basically which POS system should you buy, it becomes a lot easier to figure out. And with that said, I’m still not ready to answer the question. Let’s first look at a short list of not all, but a lot of the POS systems that are available to you today. And I’m telling you, they’re not all. Every time I go to a food show, there’s a new POS system. Now, there’s the traditional higher priced three. These were the staples in the 80s, the 90s. These were the three companies that you were going to use.

And that’s Aloha, Micros, and Positouch. Now, I think it’s I can’t remember which one. Is it Aloha that got bought by NCR? NCR used to be one of those as well. But Aloha, Microsoft PosiTouch, these are the ones the chains mostly use. They’re geared towards the bigger companies. They’re really proud of their product. I’m not going to tell you they have the best software anymore nor the best service, but they’re going to be the most expensive. So I told you that while those are good POS systems, I’m not knocking them, you could find this next mid-level priced POS systems just as much, if not more robust systems anymore.

And those systems range from, and I’m going to give you a short list if you want to write it down, know that I’m going to go quick and you’re just going to have to pause and write it down. There’s Toast, Heartland, Revel, Focus, Spot On, Touch Bistro, UpServe POS, Digital Dining, Maitre D, Dinerware, Harbor Touch, Future, Revention, Squirrel, Cake, Breadcrumb, Speedline, Lightspeed, EPOS, Future POS, Pixel Point, Talic POS, Silverware, and the list goes on. Like it is amazing that I’d give you a headache. This is why you guys asked me what POS should I get. Because look at how many opportunities and options you have.

And depending on the dealer in your area and what they’re pushing, your relationship with somebody, maybe you had an Aloha system and they brought on a second system and they’re looking to push you over to it. So they’re going to show you all the bells and whistles and all the positives of what they have. I can’t tell you that there’s anything wrong with any of those that I just talked about. Again, do they have the reports? Do they have the support? Right? That’s important. Now There are some entry-level POS systems. Clover, Lavou, Square, and there’s many more as well. I find that these systems are great for tiny little cafes that do $350,000 a year, maybe $500. But even then, they don’t give you the reports you need.

They’ll collect money well. They’ll probably give you a better credit card discount rate because that’s how they make their money. They’re simple, easy to use. Easy to get into. But I think you’re going to find very quickly you wish you had gone with somebody in the middle tier because of the reporting. Because you’re going to need better reporting. Now, let me be very clear. I don’t endorse one system over another. I have no ties, no financial ties, no relationships that make me promote one over another. Now I will tell you however, through the 20 years I’ve been coaching, I really like the people at Focus POS. I like the reporting.

I like they give me the ability to do the online thing in the cloud as well as have the backup and the terminals and everything work independently. I like them as people. I like the POS system. But I’m going to tell you, 8 out of 10 of my members are probably using Toast or Heartland. I mean, Those 2 companies are taking over the world in Toast specifically. And there’s some pros and cons to each one of them, but for the most part, they give you the ability to be in the cloud, use, depending on whether it’s Toast or it’s Heartland, each one, one has its own, if I remember correctly, its own hardware. The other one you can use any hardware, but the fact of the matter is they’re tablet based and a lot easier to take care of when they go down.

Now with that said, I believe for the most part, again, that those top or traditional POS systems and the mid-priced ones, they do almost the same damn thing. One might even say that some of the new ones like the Toast of the World, the Heartland of the World, they’re going to offer even more than those traditional, more expensive POS systems. So it really isn’t a bad choice. Unless, of course, you’re talking to somebody who hates one of them. And let me remind you, I’m going to find the other people who love that same exact POS system, people who love and hate them equally. But the truth of the matter is when it comes down to two very important things.

Does the POS system have the bells and whistles I want, whether it’s reporting, hardware, cloud-based, whatever it is, like real-time reporting? So all the bells and whistles I want. Real-time apps that I can see where I am. I can see a ticket at any point in time. Hell, I can tie it to my register and see it ring up on the security cameras. How much do you want to see? But also, do they have great support? And I’m going to tell you, need to research that. When I say research it, not just take the, hey, talk to these customers. ******** go out to restaurants, sit at the bar. Look and see that they have the POS system you’re looking at. Ask the employee, hey, what do you think of that POS system? They’re going to tell you the ins and outs.

They will pour it out. Then talk to a manager. What do you think about this POS system? Find the real deal out, especially and specifically in your marketplace. Because depending on the POS you go to, they may have a local dealer that’s servicing you. And I’m going to tell you right now, every dealer is not created equal. They could be the same exact POS system from one marketplace to the other. And in a specific marketplace, they love the POS system because they have dynamite dealer. The service is unbelievable. Vice versa, same POS set up improperly, not supported. People hate it. So make sure you’re checking your market out, not just everywhere. And this is basically how you’re going to determine which POS system is right for you.

Ultimately, the short answer to the question, which POS system should I buy, is one that has Does it have the features you want, fits your budget, and has great support and service? So guess what? I’m not going to answer that question for you because I can’t. There are too many variables. You’re the only one who can do it. But make sure you do your research, feel comfortable, and don’t belabor it so much that when you get down to two, let’s say it’s a toast to Harlan, and they do the same damn thing, just go with your gut. This is David Scott Peters saying happy hunting. Hey, that was an awesome episode. I want to thank you for taking the time to take action on building a better, more prosperous restaurant.

Before you go, I want to give you these three thoughts. One, by combining leadership and taking action with systems and training being checked by accountability, you are on your way to creating prosperity for you and your restaurant. Two, I have something I need from you. Please leave a review on Apple Podcasts, Spotify, or wherever you happen to listen to podcasts. By leaving us a review, other restaurant pros seeking out this information are able to find it. I read the reviews, and hearing how this information has benefited you does wonders for me. And 3, if you find any of the discussions helpful, share them. The more restaurant pros who have access to them, the better we become as an industry. com. Be passionate about what you’re doing.

Be persistent, but more importantly, become better and help everyone around you become better and your restaurant is going to kick some ***.