Things to know before buying a restaurant POS system
A very important commercial tool for the catering industry is a Point of Sale (POS) system. Since a POS system uses portable devices, errors and omissions typical of the manual order taking process are eliminated when using an automated restaurant ordering system.
Although having a point of sale restaurant is quite beneficial, the operation and associated procedures of a point of sale system can be quite complex. Since implementing one is a substantial investment, you need to know what you are getting into.
The following information may be helpful to familiarize you, as a member of the restaurant industry, with POS concepts. Importantly, you will understand how you can protect your business from the usual POS-related pitfalls.
Get familiar with the components and costs
It is important that you know all the hardware and software components of your POS system. Some systems offer full functionality while others just the basics. When an initial demonstration is shown to you, the system vendor may use a great deal of sophisticated equipment that may not be included in the quote they provide. Make sure they price you for all optional software and hardware that may not be part of the main quote.
In addition to this, be sure to find out other affiliate charges, such as license and installation fees, along with potential recurring costs, such as maintenance charges and service level agreement (SLA) fees.
By being knowledgeable about the amount of total spending you are in initially, as well as over a period of time, you can determine your total cost of ownership (TCO) and avoid any financial impacts later on.
Ensuring a clearly defined service level agreement and fee schedule
The SLA, which is a negotiated agreement between you and the POS system provider, sets out the provider’s obligation regarding its services, responsibilities, and warranties. Sometimes sanctions are even agreed in case of breach of the SLA. A clearly defined SLA will go a long way towards avoiding potential misunderstandings in the future, minimizing questions and providing the necessary resources.
In addition to the initial cost of the POS system, you will incur recurring charges for services provided by other business partners, such as credit card processing, online ordering, time and attendance, etc. It is advisable to confirm the part that provides each service. You should also clarify fees for additional services such as upgrades, software and hardware support, and staff training. Once you have a timeline outlining all costs and their recurrence, you can plan your budgets accordingly.
Meet your affiliated financial benefits and service provider
If you are trapped in an unprofitable business relationship with your POS provider, it can have a detrimental effect on your restaurant operations. Before signing a contract, make sure you are aware of all the options for terminating the agreement or processing the payment and any other associated fees.
It is common for POS system providers and payment processing companies to have revenue sharing agreements. Ask the POS system provider to disclose the financial benefits, if any, of such
A system vendor can significantly reduce the cost of a POS system by using their company’s “processing services,” or increase it by not. When processing is outsourced to an independent sales organization (ISO), the vendor may charge more than the direct processor. Find out what additional services you get from your system provider that may not be available on the direct processor.
If you go to a POS restaurant and are well informed, you are sure to reap countless benefits. An organized workplace, higher income, happier customers, and higher profit margins are just a few of them.