Restaurant chain operations are fast-paced and require an efficient means to fulfill orders while ensuring that inventory and staff are properly managed. A restaurant point-of-sale (POS) system serves as a central hub for a restaurant’s business operations, enabling access to ordering processing, menu management, and inventory control from a single platform.
If you own a restaurant and want to know how the POS system works, this article can provide you with a clear answer.
Restaurant POS System Overview By Order Flow Stage
In a chain restaurant environment, the POS system manages both the front and back-end aspects of the business. Below is a typical order process flow for restaurants and the relevant software and hardware POS systems involved.
| Order Flow Stage | Relevant POS Software | Relevant POS Hardware |
| 1. Order entry |
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| 2. Kitchen routing |
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| 3. Order preparation |
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| 4. Inventory update |
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| 5. Payment processing |
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| 6. Close & record |
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| 7. Delivery |
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| 8. Reporting |
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Most POS software and hardware overlap to perform different functions. This demonstrates how deeply integrated the features are, allowing it to share information during each customer order processed. The extra management functionalities, including the reporting and analytics tools is what make a restaurant POS system a better choice for chain restaurants than electronic cash registers.
1. Front-Of-House Order Entry
The order flow begins with order entry. The restaurant POS software comes with a digital menu board used by the staff to enter the customer’s order into the system.
The traditional setup would be to access this feature at the counter where customers also pay. In sit-down or more formal restaurants, a staff member carries a handheld device to take orders table-side. In fast food restaurant chains, this step typically includes a self-checkout kiosk option, allowing customers to access the menu independently and enter their orders into the system.
The kiosk, handheld device, and countertop terminal are all connected in one network. Customer orders are sent to a single POS software, which assigns an order number and then sent to the kitchen for preparation.
POS software feature: Order management, menu & pricing, user roles, order routing (delivery)
POS hardware: POS terminal, handheld device, self-order kiosk
Caption: Self-order kiosks in fast food restaurants (Image: BIMI range of restaurant self-order kiosks)
2. Order Is Transmitted To The Kitchen
Once the order is confirmed, the POS software comes with a system logic that determines how to send the information to the kitchen. The order is posted on the kitchen display system (KDS) to begin preparing the meal. This is simple in fast food restaurants where the kitchen staff shares one KDS system.
However, in a larger, full-service restaurant, it’s likely that every station, such as grills, drinks, and desserts, has its own KDS. In this scenario, the POS software’s system logic identifies each order and splits food items to send them to the right stations. The order number makes sure that these are all put together at the pass once prepared.
POS software feature: Kitchen workflow
POS hardware: KDS, kitchen printer
3. Order Preparation and Fulfillment
As the kitchen staff prepares the order, they interact with the kitchen display systems to view the items. They update the order status, which is then reflected at the front-of-house. The KDS also comes with a timer that tracks preparation time to make sure there are no bottlenecks with the orders.
POS software feature: Status tracking
POS hardware: KDS displays
Caption: Order preparation from restaurant back-of-house (Image: BIMI Kitchen Display System Hardware)
4. Inventory Updates
In a restaurant setting, inventory is adjusted once the order is processed. The POS system comes with a built-in raw ingredients inventory management feature. As soon as it acknowledges an order from the menu, the system’s logic automatically refers to the raw ingredients and adjusts the available stocks.
Inventory management is a critical integration in chain restaurants because it provides real-time information on product availability. Here’s how it works:
- Creates ingredient groupings based on the menu
- Real-time tracking of the number of menu items available based on ingredients
- Includes perishables tracking for raw ingredients
- Can customize minimum ingredient stock levels
- Issues stock alerts on ingredients that fall below minimum stock levels
- Automatically removes items from the menu list if ingredients are no longer available
POS software feature: Inventory management
POS hardware: Network server
5. Payment Processing
When the customer is ready to pay, the staff accesses the POS system’s payment processing feature. This is a combination of a cash register and a card payment capture function to accommodate multiple types of payment methods. This includes cash, card, and mobile-device-enabled payment. Gift cards can also be programmed to work as a payment option.
In fast food restaurant chains, customers have the option to pay at the self-checkout or at the service counter. The self-service kiosk would display these options, and those who choose cash can use the embedded card reader device on the kiosk. Once the payment is made (or if pay-at-counter is chosen), the device will generate a printed order ticket number to present to the service counter.
For sit-down restaurants, table-side payments are available using the same handheld device for order-taking. The hardware comes with a built-in card magstripe reader and a chip reader for card payments. It also has a tipping and signature caption feature for customers to interact with the system.
POS software feature: Payment processor, user roles
POS hardware: Payment terminal, card reader
Caption: Countertop Restaurant POS system set up (Image: BIMI Full Set Up POS System)
6. Closing Tab and Recording Transaction
After the payment is approved, the POS system closes the customer’s tab and prints out the receipt. It then finalizes the transaction and records the sale, which includes assigning the employee, the correct revenue category, and the store location. Both the POS terminals and the handheld device are equipped with thermal receipt printers.
A customer profile is also created for new diners, while profiles are updated for repeat customers. This customer relationship management (CRM) functionality is a unique feature found in POS systems. The data collected from this feature is used to personalize customer experience, such as knowing how they prefer to pay and offering promos on items they like.
POS software feature: Transaction management, CRM, User roles
POS hardware: POS terminals, Thermal receipt printers
7. Delivery (For remote ordering)
For restaurants that accept online ordering from mobile food delivery apps, the fulfillment process continues with the actual food delivery. The POS system will have a dispatch management feature that keeps track of online orders. Once the food items come out of the kitchen, the staff hands the orders to the delivery person.
Delivery apps integrated into the POS system are the usual platforms for providing customers with updates on their orders. Maps are available within the app that pinpoint the delivery address provided by the customer. Once there, the delivery driver can accept card payment with a mobile credit card reader.
POS software feature: Dispatch management, delivery app integration
POS hardware: Mobile card readers
8. Reporting and Analytics
POS systems can provide you with reports and analytics in real-time. Each time an order comes in, up to the point when customer tabs are settled, the restaurant POS system updates your business data. At any given time, you have access to the latest information on your sales, inventory, and other key performance indicators from your POS account.
Here are some examples:
- When a customer order is placed, the system updates a running tally of your inventory levels. It also tracks which menu items are most commonly ordered.
- As soon as the order reaches the kitchen staff, the KDS tracks how long it takes to prepare each menu item. It also notes the service times and the number of employees available.
- When customers make their payment, the system updates your sales data. It also keeps track of the restaurant staff for the sale and creates a customer profile.
- Every day, the system tracks your restaurant staff’s performance. Their attendance, the sales they make, any shift changes they accept, and more.
From these collected data, you can set your POS system to generate analytics. For example, you might want to know if seasonality affects the demands of certain menu items. Or maybe you want to know why the cost to produce your food fluctuates. This is especially useful for chain restaurants that want to compare how each store performs before making any business decisions.
POS software feature: Reports and data analytics
POS hardware: POS terminals for data capture
Core POS Restaurant Features
These are the minimum set of features in a POS system that support order flow and the fulfillment process in restaurant operations.
Order Management System
This feature allows you to create, validate, route, and track orders from entry to completion. It connects with the KDS at the back-of-house in order to provide updates on the status of the customers’ orders. This feature is accessed by most of the restaurant staff, allowing them to prioritize tasks.
Inventory Management
Automatically adjusts stock levels based on sales and recipes.
Menu and Pricing Management
Menu and pricing management controls your digital menu from your POS account, primarily to ensure pricing consistency across your chain or restaurants. It displays your menu item modifiers as well as updates the staff’s interface on any promotions. This feature is also connected to your inventory management function, so it automatically removes any out-of-stock items.
Kitchen Workflow and Display Management
This provides the restaurant POS system’s logic that determines how orders are distributed to preparation stations and displayed to kitchen staff. It also provides an interface for updating the status of food items in the order queue, which is then displayed at the front-of-house.
Transaction and Payment Processor
This is the feature that handles the “checkout process” when customers pay their bill. The payment processor in a POS system is designed to handle both cash and non-cash tenders (card payments). Primarily, this feature is an integration with a payment processor services provider, though some POS systems come with this built in to make setup easier.
For card payments, the payment processor’s role is to initiate the authorization and settlement of customer transactions. It also supports refunds, voids, and tipping functionalities. Every payment processor also provides multiple levels of payment security for compliance.
Customer Relationship Management (CRM)
Every POS system comes with a CRM. Basic features allow you to create a customer profile that records their dates of visit, order summary, and mode of payment. Data collected from this feature can be connected to marketing software that can help customize promotions and offer a more personalized service when customers visit your restaurant.
Staff Management
Staff management in restaurant POS systems is often more complex compared to its retail counterpart. It includes more granular tools for organizing shifts and schedules, which are often interactive so employees can confirm and request shift changes. Others even support time-in and time-out functions, so data goes directly to the personnel profile and payroll.
Reports Management
Your restaurant POS system comes with built-in report generation features. This allows you to set up report templates that the software can populate in real-time. Each business data point that’s collected into your other restaurant POS management tools filters into the reporting function. Analytics interprets these reports based on your preference to produce business insights.
All of these reports and analytics are customizable, so you can create templates that provide you with the data you actually need. These are all accessible from your POS account dashboard.
Restaurant POS Hardware
Below is a list of ordinary restaurant POS hardware.
POS Terminals
POS terminals are fixed, front-of-house workstations used for order-entry, check management, and table management. The standard model comes with a single touchscreen display available in different sizes, while more advanced options include a second, smaller screen for customer display. These are compatible with different operating systems for the POS terminals. (Windows POS System, Android POS system, Linux System, etc.)
Caption: POS terminals with touchscreen interface (Image: BIMI range of POS terminals)
Handheld Terminals
Handheld terminals are an extension of a POS terminal. It is compact, with a touchscreen-enabled display, thermal receipt printer, and built-in card reader. Some have options to use a tablet or iPad, but a proprietary handheld terminal is more similar to a smartphone. They are industrial grade and able to withstand drops and spills during service.
Caption: Restaurant handheld POS terminal [Image: Bimi]
Self-order Kiosk
A self-order kiosk in restaurants comes in different sizes. All have large, colored, touchscreen displays. The large countertop stand version includes 15.6” monitors, while desktop self-order kiosks have options of 21” to 32” monitors. All of them have thermal printers, scanners, and built-in credit card readers.
Caption: Restaurant self-service checkout machines [Image: Bimi range of self-order kiosks]
Kitchen Display
Kitchen displays range from 15” to 32” interactive colored monitors. They are either Windows or Android-based and can be set up to either be hung or wall-mounted, depending on the client’s requirements. The best ones are industrial grade,e so they’re able to withstand the heat, steam, and liquid/oil damage in the back-of-house.
Caption: Full-featured kitchen display with table mapping. [Image: Bimi kitchen display hardware]
Payment Terminals
Payment terminals are similar to the traditional credit card terminals that are connected to the POS terminal. Modern ones now come with a full, colored touchscreen display and are equipped with a built-in scanner, printer, magstripe, and chip reader. PIN pads are also available for debit PIN payments. More advanced versions include a signature capture feature.
Caption: Payment terminals for restaurants [Image: Square payment terminal]
Card Readers
An alternative to payment terminals is card readers directly installed onto the POS system hardware. One version is that of a magstripe or chip reader attached to a tablet stand. Another version is a mobile card reader. This can be connected to a smartphone with an installed delivery app via USB or phone jack, while more advanced options can be linked via Bluetooth.
Caption: Card reader attached to a POS Terminal [Image: Bimi POS hardware]
Cash Drawers
The cash drawer is still necessary if you accept cash payments in your restaurant. Cash drawers are attached to a POS terminal and linked to the POS software’s cash register feature. Most POS systems are compatible with standard cash drawers that are around 16” in width, while others include a proprietary cash drawer in their hardware list.
Caption: Cash boxes for restaurants [Image: Bimi BM-405 cash drawer]
Receipt Printers
Receipt printers are POS peripherals that are connected to a POS terminal via cable or Bluetooth. These are all thermal, so there is no need for ink to print receipts. Standard receipt printers support 58mm or 80mm paper widths, with a 203 DPI printing resolution. Handheld POS terminals often have thermal receipt printers built-into the hardware.
Caption: Receipt printers for restaurants [Image: Bimi receipt printer TP-80A]
Back Office Terminals
Back office terminals are simply computers or laptops connected to the POS system. It accesses the merchant account on the POS software. There is no special hardware configuration needed, especially if you use a cloud-based POS system.
Caption: Payment terminals for restaurants [Image: Bimi industry PC box]
Getting The Most Out of Your Restaurant POS System
A restaurant POS system is designed to support your order process flow and make busy restaurant operations more efficient with automations. For restaurant chains, this is especially critical to coordinate every order accepted, routed, fulfilled, and paid for. So when choosing a restaurant POS system, the key is finding the right combination of software and hardware.
With both aspects of a POS system working together as a central hub, the restaurant POS makes it possible to seamlessly manage all aspects of operations accurately and in real-time. It also provides the flexibility of expanding its capabilities as your business needs grow. The reporting and analytics features help you plan your business strategy with timely business data.
How to Choose a Restaurant POS Hardware
You’ll often find great advice online on how to choose the best POS software, but not many go into the importance of getting the right hardware. In restaurant chains, POS hardware is more critical than ever because the demands of the operation require devices that can withstand the rush in both front and back-of-house.
- Is it the right fit for your restaurant environment? Front-of-house devices should be able to handle constant interaction, while back-of-house hardware should remain operational even with intense heat, moisture, grease, and extended operating hours.
- Is it compatible with your POS software? Make sure to ask about software compatibility before deciding on the hardware. You may have purchased the POS software with all the right features you need to operate, but it’s impossible to maximize this investment without the right hardware.
- Can your provider supply you with similar, upgradable hardware? Beyond the devices themselves, you also need a reliable hardware supplier. As your business grows, you will need constant upgrades and even additional units, which should work seamlessly with what you currently use.
- Do you get excellent after-sales support? Aside from the warranty, you should choose a supplier that can provide you with easily accessible technical support. Ideally, you should get a supplier that can offer expert advice to help you find the right upgrade options as your business grows.
Get your restaurant POS system from experts who can help. BIMI has 15 years of experience providing tailored restaurant POS system solutions for businesses of all sizes. Our in-house experts will help you with the best recommendations and after-sales support.
[View our POS solutions]
Frequently Asked Questions (FAQs)
What is the difference between a restaurant POS system and a traditional cash register?
A traditional electronic cash register is primarily used to record payments and store basic transaction information. For restaurants, this means manually programming buttons to different menus and entering payments. There is no system to automatically coordinate orders to the kitchen.
A restaurant POS system seamlessly connects your order workflow. Once an order is received, the system tracks its progress from the front to the back-of-house until the check is closed. It also takes detailed records of sales, inventory, and customer information in real-time.
Why do chain restaurants need the right POS hardware?
Your POS hardware manages the order flow process in chain restaurants. Unlike in retail, restaurant POS hardware is subjected to continued interaction in a demanding environment for extended periods of time. A less-than-reliable piece of hardware will not be able to withstand heat, moisture, spills, drops, and grease that are often associated with a restaurant.
Which is why industrial-grade hardware is a must in restaurants. Operations getting delayed, or worse, halted due to hardware failure, will heavily affect your sales. You will also want to make sure that you have a POS hardware supplier that offers excellent after-sales support in case you need technical help or replacement.
There are some benefits of a POS system for your restaurants, especially in your kitchen, by using an industrial-grade hardware which is waterproof, dustproof, and oilproof. No more worry for the hardware stopped suddenly because of accidentally spilled water on the screen of the machine.
Can restaurant POS software run on consumer tablets?
Yes, app-based restaurant POS systems can run on consumer tablets as well as iPads. Like most apps, these are easy to use and customize, so you can do everything from setting up a countertop terminal, adding a handheld for table-side ordering and payment, and even setting up a kitchen display system.
That said, it’s important to remember that these consumer tablets are not built for the demands of a busy restaurant environment. They are less durable than industrial-grade restaurant hardware, so you run the risk of getting operations stalled because of damaged hardware.
Why is a kitchen display system important in restaurant operations?
A kitchen display system (KDS) connects front-of-house operations to back-of-house or the kitchen. It provides visibility, alerting the kitchen staff of incoming customer orders. The software helps in distributing the menu items according to stations while also keeping an eye on the progress of the entire order.
The hardware also offers an interactive screen where the kitchen staff can update the order status from the KDS. This helps to let the front-of-house know the progress of customer orders and follow up on the status when needed.
How do POS systems support multi-location restaurant management?
Your restaurant POS system is your main point of access for managing all your restaurant locations. This means you can manage menus, pricing rules, promotions, and inventory from a computer with the POS software installed. You also get real-time updates to your inventory stock levels to avoid running out of raw ingredients or selling out-of-stock items.
A restaurant POS system also provides you with a reporting feature that can compare performance across all your store locations. You can use the analytics tool to help process this information into data that can help plan your business strategy.
Are POS systems secure for payment processing?
Yes. Modern restaurant POS systems are designed to meet strict security standards and comply with government requirements. POS software encrypts transaction data as it sends the information to the payment processor. In the same way, the payment processor returns the approved transaction in an encrypted format to prevent getting intercepted by hackers.
Chain restaurants are expected to have both software and hardware regularly tested to ensure security. It also helps update the system with new protection tools against the latest strategies employed by hackers in stealing customer card information.
How does inventory tracking work in a restaurant POS system?
Inventory tracking in a restaurant POS system focuses on raw ingredients. This means a first-in, first-out method with expiry tracking in place. Fortunately, this is an automated feature that only requires an initial setup when you first start using the software. When orders come in and are sent to the kitchen, the system automatically adjusts the stock levels for the relevant ingredients.
The inventory tracking is also connected to your restaurant’s menu management feature. It estimates how much of each menu item is available based on the ingredient stock level, and automatically removes items from the list once ingredients are no longer available.
What happens if POS hardware fails during service?
Your restaurant operations will slow down or, worse, stop entirely if certain POS hardware fails during service. This is why using commercial hardware such as tablets to run a restaurant POS system is risky. The best choice is to use standardized industrial-grade hardware that’s designed to endure busy restaurant operations.
Can POS systems integrate with other restaurant software?
Most modern POS systems can integrate with other restaurant software such as accounting, payroll, marketing, loyalty, and delivery tools. With these integrations, data flows seamlessly and in real-time, so business owners have access to reliable data. The automations also make it possible to keep information free from manual errors.
If you are already using a variety of business software before purchasing a restaurant POS system, make sure to consider compatibility. Ask your provider about integration options and whether it incurs additional cost.
How do you choose the right restaurant POS system?
There are different types of POS systems for your restaurants. So, how to choose the right restaurant POS system?
The first and foremost consideration when choosing the right POS system for your restaurant is its compatibility with your business operations. Your choice of software should provide you with all the features you need to manage your order flow. It should also provide you with room to grow with integrations and upgrades.
Hardware durability is as important as your choice of restaurant POS software. Find a provider that offers proprietary, industrial-grade devices that will keep working in rigorous restaurant conditions. Warranty should be a big factor, as well as customer support.
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