The Benefits of Cloud-Based Restaurant POS Software? - POS system on bakery counter

The benefits of cloud based restaurant POS software

Monday, December 22, 2014

Your restaurant is humming. Every table is full. In the bar, every seat is taken. It's hectic, but that was your dream, and that’s what you’ve always wanted. And then just as tables start to turn over, everything starts to lag. The payment connection is timing out and the order screens are taking longer to load. On a busy night, delays can mean lost revenue. A five-minute delay on ten tables is 50 minutes which could have served another group. 

Slow-loading software or payment processing means a longer serve time, but so do poor inventory management and staffing shortages. Today's restaurants need an end-to-end picture of their operations to ensure an exceptional customer experience. They need access to data that can help forecast demand over long periods of time. Restaurants need a cloud-based point of sale (POS) system strategy to deliver a dining experience that consumers have come to expect.

What is a cloud-based restaurant POS system?

Cloud-based POS software enables restaurant business owners to accept payments via the internet instead of a closed system where transactions are authorized using a telephone or cellular connection. Traditional POS systems operate on a closed network where all devices connect to an on-premise server. Transactions are processed through a central phone line and data is stored on a local server. In many instances, the hardware and software are the businesses' responsibility once they are installed and operational.

Cloud-based solutions are typically software as a service (Saas) offerings where users pay a monthly subscription fee. These systems can operate on a range of POS hardware such as cell phones, wireless tablets, or desktop workstations. Depending on the system, the POS software can support bar and restaurant service as well as management functions such as reservations, inventory control, and payroll. In addition, with cloud-based POS software, restaurants can track key performance indicators (KPIs) that can be used to gain insight into customer preferences and habits.

What features should restaurant POS systems have?

Because every restaurant is different, customization should be an essential feature of any cloud-based solution. Coffee shops, bistros, and food trucks may have limited menus, but that doesn't mean they don't change. With more eateries buying local, supplies can change quickly, thereby making customized menu management a necessity.

Bars require more from a POS solution than just payment processing. They need inventory control and employee management as well. Scheduling can be challenging, and having an online scheduler means adjustments are handled quickly. Split and separate checks, open tabs, and cash drawer management expedite transaction and settlement processing, making closing out run smoothly.
Restaurants need payment options. Outdoor dining benefits from mobile payments. Payments for online orders should integrate with on-premise payments for simplified settlement. By letting indoor diners pay through tablets, restaurants can support alternative payment methods. In addition, offering patrons loyalty programs across all delivery channels can increase customer loyalty.

Food service requires management to run smoothly. The back and front of the house must work seamlessly to deliver orders accurately. Restaurant businesses need solutions that provide:

  • Customized sales reports and analytics
  • Automated inventory tracking and stock management
  • Integrated accounting for billing and invoicing
  • Back of house management with inventory control
  • Automated reservations and waitlists 

With a broad range of features, cloud-based POS systems for restaurants can help grow your business through efficient operations and exceptional customer experiences.

Next, let’s look at some of the benefits of a cloud-based POS system for restaurants.

What are the benefits of a cloud-based POS system for restaurants?

Cloud-based POS solutions offer more than a list of must-have POS system features. They provide restaurant owners with the following benefits:

Greater accessibility

POS systems that only reside in a restaurant can only keep data locally and usually require that users log in to the system using fixed terminals. Payments can only be processed from a workstation or terminal with a card reader. With SaaS solutions, data is maintained in the cloud, making the data available on any connected device. Workstations can access the information using a web browser while mobile apps can be used to access information at a customer's table. 

For restaurant owners like you, cloud-based solutions means accessing data remotely. Instead of staying late at work or arriving early, restaurant managers can take care of administrative functions such as pricing adjustments, credit card reconciliation, and employee scheduling from home. With greater accessibility, everyone from the wait staff to the kitchen staff is working from the same set of information, thereby reducing the chance of miscommunication. 

Increased revenue

Making restaurant operations more efficient can increase revenue, but comprehensive POS solutions can not only increase revenue but also provide new revenue streams. With mobile payment processing, owners can invest in outdoor dining without adding to the round trips for credit card transactions. Online ordering can integrate with mobile and indoor dining for a single view of all revenue streams.

Centralized menu management makes online ordering more cost effective. Menu changes can be made in real-time without leaving the POS system. These changes can be localized or system-wide. Owners can even branch out into catering where orders and payments can be made online or through a mobile payment terminal.

It’s a fact that loyalty programs can increase revenue. According to CNBC, loyalty programs encourage customers to return more frequently. These returning customers also spend more on average than non-loyalty consumers. For example, Chipolte's loyalty program at the end of 2019 had 8 million members. Today its program has 21 million members. 

Gift cards are another revenue source, especially if they can be purchased online. Issuing gift cards broadens the customer base. People who might not have visited a certain restaurant will be more likely to do so if they have a gift card. Providing more integrated sales channels can increase revenue without increasing workloads.

Lower maintenance

Closed POS systems need updating which can be time-consuming and costly. Whether you or a third party does the updating, it's a manual process that rarely goes smoothly. On the other hand, cloud POS solutions update remotely using an internet connection. The automatic updates ensure that the system is secure. Cloud solutions also ensure that systems are periodically backed up, so you don't have to worry about data loss. 

Cloud restaurant systems provide online customer support. Most providers offer online chat and telephone support. Some include 24/7 technical support, therefore ensuring that your system is always operational. Since most restaurants and bars do not operate during normal business hours, having access to 24-hour support is crucial for your business. 

Less complexity

Traditional POS solutions require connecting servers, cables, and terminals so that they can communicate. Because cloud-based POS terminals connect directly to the cloud, bistro and café owners only need to simply plug in the device, connect to the internet, and let the service provider download the software. Instead of taking days to roll out a new system, restaurants can be up and running in a matter of hours.

When it's time to add a device, you don't have to wait for someone to load the software using a terminal-to-terminal connection. Just turn on the device and let the provider get the device up and running.

Lower costs

Instead of paying a one-time license fee and ongoing maintenance costs for a legacy POS system, cloud solutions use a subscription fee model. Plus, some service providers offer lease programs for hardware options, making the initial investment significantly less. Ongoing maintenance is often included in the subscription fee.

Because software updates are delivered remotely, no one is going to arrive at your restaurant to install the latest software, expecting to be paid for their time. The updates can even be made during off-hours, reducing operational disruptions which can equate to lost revenue. The simple convenience of remote updates and support can reduce the everyday stress of owning a restaurant.

Reliable payment processing

Do you have a contingency plan if your online payment processor is unavailable? Most restaurant owners don't. With 81% of full-service restaurant checks being paid by card, it's time to have a backup.

Many cloud solutions offer an offline mode should the internet connection go down. Not only do offline authorizations ensure a better customer and employee experience, they also provide a sure method for receiving payment.

Legacy systems may not have the capabilities to support split or separate checks. Some may not allow open bar tabs. Without these capabilities, employees have to find workarounds that are time-consuming and prone to error. Having a solution that can calculate the check amounts makes the payment process more efficient. 

Enhanced security

Accepting credit or debit card payments means being Payment Card Industry Data Security Standard (PCI DSS) compliant. In-restaurant systems must ensure that all customer data is securely stored in compliance with the PCI DSS standards. They must also comply with the security standards for transmitting data for authorization. When these standards change, updates will be required, and not all legacy systems include compliance updates as part of maintenance which may result in additional costs as well as missed updates.

Cloud solutions must comply with the same PCI DSS standards. Since data is not stored locally, the security compliance resides with the service provider and not the restaurant. Most cloud solutions deploy strong cybersecurity defenses to ensure that data is protected whether idle or in transit. Plus, many provide role-based access, granting permission to only a limited number of employees, thus reducing the possibility of a data breach.

Greater adaptability

POS systems need to be agile and scalable because they must adjust to changing industry requirements. Small business owners need access to data. With more time constraints, they need access to their systems from anywhere because they can't always go to the restaurant to handle administrative tasks. 

Agile POS solutions are customizable with changes taking effect in real-time. Quick-service restaurants need to be especially agile to address changing appetites. For example, menu management can be time-consuming. Changes can take hours before they are made. But with a cloud-based system, correcting a simple typo or updating a menu can be done in minutes, ensuring a professional image for your business.

Scaling is an important part of adaptability. As your restaurant business grows, you need the ability to expand your POS system without major disruptions. Cloud-based solutions can quickly scale to address increased demand. Deploying more terminals or adding a food truck to your operations can be handled seamlessly and remotely.

Streamlined operations

Well-integrated POS solutions tie the back and front of the house together in a seamless transfer of information from wait staff to kitchen staff. Tableside ordering can expedite the process and eliminate errors. Instead of having the wait staff scribble orders on a pad and then transfer it to an electronic system, let waiters take the technology to the table.

Using a tablet, servers can enter orders into the system which immediately transfers the information to a kitchen display system. No time is wasted by walking back to the kitchen or entering the information into a separate ordering system. Plus, eliminating handwritten orders means fewer mistakes because of hard-to-read tickets.

Whether it's faster payment processing or more direct order placement, POS systems can streamline operations that result in increased profitability.

According to Deloitte, customers want their restaurant experience to accomplish the following:

  • Engage. Customers want to be viewed as a person who interacts with a staff member who is hospitable and authentic.
  • Empower. Customers want flexibility when it comes to menu items. They want to feel in control of their meal.
  • Listen. Customers want their needs to be heard. 
  • Delight. Customers want to be surprised with an exceptional moment that personalizes their experience.
  • Remember. Customers want themselves and their preferences to be remembered. 

These five characteristics are consistent across all age groups with everyone placing engagement as the primary element of a good experience.

Cloud-based POS systems help improve customer experiences through loyalty programs where data is collected on order preferences, frequency, or personal information. Restaurants can use that data to provide more personalized experiences. Relying on a seamless front-of-house to the back of the restaurant can shorten the wait time. No employee wants to keep telling their guests for 20 minutes that their meal is coming at any minute.

Providing employees with this technology frees them up to give customers more of the individualized service that they desire. They don't have to worry about order clarity. With technology handling such things as table management, all staff know that customers will be promptly and accurately served.

More data driven decisions

Cloud-based restaurant POS systems collect data and store it in the cloud. Using that data, the software can report on average serve time for a week, month, year, etc. The data can be compared to the serve times from six months prior to see if serve times have improved.

Many solutions provide reports and some offer analytics to help grow restaurants, coffee shops, and bakeries. They can break down expenditures and income according to location and can provide data on employee performance. The information provides a basis for making informed decisions.

Historical data is available to help analyze changes in customer preferences. It can indicate when certain dishes are more popular so you can adjust inventory accordingly. Information on promotions or discounts can show how effective a marketing campaign was. With a cloud solution, the data is available to help guide decisions.

Is a cloud-based POS system right for my restaurant?

A recent report on the cloud POS market forecasts that the market will grow at a compound annual growth rate (CAGR) of 22.8% from 2021 through 2027. A significant part of that growth comes from small companies installing systems to help with inventory, staffing, order processing, and management. Another factor driving the move to cloud technology is the increase in mobile and contactless payments. In 2020, 51% of U.S. consumers used contactless payments, according to MasterCard.

If your existing POS system cannot deliver crucial functionality such as mobile and contactless payments, it may be time to look at a cloud solution. If your system is slowing down, or you're losing connectivity more often, cloud solutions can help. If your business is in need of some or all of the following, it may be time to consider cloud-based software.
  • Better inventory management that reduces errors
  • Accurate sales data by date, time, and location
  • Lower costs for compliance and maintenance
  • Improved table management and floor plans
  • Personalized promotions through loyalty programs
  • Comprehensive restaurant management system
  • Memorable customer experiences

With the cloud, business owners can compete with larger enterprises because the POS systems offer tools to help small to mid-sized restaurants grow. In fact, small to mid-sized businesses will drive growth in the POS market and are forecast to gain significant market share through 2027. According to the study, the following trends will drive growth:

  • Shorter serve times
  • Better cybersecurity
  • Paperless receipt options
  • Faster transaction processing

Now may be the time to look at a cloud-based restaurant POS system so your business can enjoy years of sustained growth. 

Is It Easy to Switch to Cloud-Based POS Software?

The simple answer is yes. With upfront technical and customer support, the transition from a legacy system to a cloud-based POS system is seamless. Integrations with payment processors make it easy to start processing transactions. With a move to cloud-based POS solutions, restaurant owners can realize their benefits immediately. 

Ready to get started with a cloud-based restaurant POS software?

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