Bar and Restaurant Technology: The Complete Guide
Restaurant and bar technology. On one hand, the age-old tradition of gathering together and sharing refreshments. On the other, computers shooting information at each other. Will they ever get along?
Yes! Technology is now a necessary part of providing the experience guests expect at bars and restaurants. Over 80% of restaurants embrace it, and 53% say they would even implement predictive ordering technology. Restaurant and bar technology is here.
So what is the technology used in a restaurant? In this guide, we’ll cover two primary tools that will help your business deliver memorable service and make more money. It doesn’t matter if you’re running a bar, restaurant, or hotel. First we’ll look at Point of Sale (POS) systems, then get into restaurant management software.
Step confidently into the new world and run your business with the help of thoughtful and compliant computers. Leave the old-world charm to your menu.
What is a POS System?
POS stands for point-of-sale. It refers to the physical place where the sales transaction takes place. There are two components of a POS system:
- POS hardware is the physical screen, tablet, or kiosk where staff enters the order. It may also include printers, scanners, and cash drawers.
- POS software is the program that runs on the hardware. At its most basic, it’s a purely transactional software that rings up and prints items sold. At its most complex, it’s an all-in-one reporting and analytics suite that helps you manage most aspects of your business.
POS software is the program that runs on the hardware. It’s basically a purely transactional software that rings up and prints items sold. At its most complex, it’s an all-in-one reporting and analytics suite that helps you manage most aspects of your business.
POS systems help different parts of your restaurant and bar communicate with each other. They are the brains behind the operation. So let’s take a look at the different types of POS systems, how much they cost, and some of the low-cost solutions out there.
Types of POS Systems
The first POS system was created by IBM in 1973 for McDonald’s. Here are some things that didn’t exist in 1973:
- Chicken McNuggets
- Artificial hearts
- DNA fingerprinting
- The Space Shuttle
- The freaking Internet
What a world. It’s no wonder that POS systems have evolved substantially, and there are now a few different types: legacy, cloud-based, hybrid, and mobile.
Legacy POS Systems
Legacy POS systems are the old-school ones. The software used installs locally and the restaurant or bar owns it. Imagine a computer that’s not connected to the internet. You can access files on it, but those files are on your computer. Similarly, all the information in the legacy POS system is stored locally on a hard drive. They’re generally slower, require on-site visits from reps to troubleshoot technical problems, and need to be restarted anytime you want to update your system.
Cloud-Based POS Systems
Cloud-based POS systems are the new ones. Now imagine a computer that connects to the Internet. You can access files on it, but those files are on another hard drive (a server) somewhere else. All the information in your POS, from menu items to payment information, is stored in the cloud. That’s a fancy way to say the data is not on your local hard drive. That also means its accessible from anywhere, in contrast to legacy systems. It also means that updating is a breeze because the servers refresh automatically. It also makes troubleshooting easier because your POS provider can help you remotely. Don’t worry about the internet going down, either. Cloud-based POS systems still maintain most functionality in offline mode.
Hybrid POS Systems
Hybrid POS systems integrate aspects of legacy and cloud-based systems. All the system’s data is stored locally, like legacy models, but all that data also syncs to the cloud. The primary benefit here is that you lose no functionality whatsoever if the internet goes down. The drawbacks are similar to using a legacy POS. You need to invest in a local server and updates to the system are not in real time.
Mobile POS Systems
Mobile POS systems are cloud-based, but further characterized by the inputs being via phone, tablet, and other mobile devices. You’ve probably encountered a mobile POS system in the retail environment. Like when your purchase is wrung up via a credit card swiper plugged into a smartphone. In bar and restaurant technology, the applications of a mobile POS system is primarily anytime there isn’t a permanent physical location. Think of food trucks, concerts, and street fests, along with tableside ordering, catering, and contactless payments.
They’re exceptional tools for running a business, but they can cost a pretty penny.
How Much Does a POS System Cost?
A POS system is one of the most important investments in your bar or restaurant. It’s typically one of the more expensive pieces of restaurant and bar technology needed.
Legacy models have upfront costs of anywhere from $5,000 to $50,000. Cloud-based models usually charge between $50 and $500 monthly for a subscription to use their software.
If you’re opening a bar from scratch, the best bet today is getting a cloud-based system on a monthly contract. It doesn’t require the upfront cost or your owning of a depreciating asset. And the vendors usually provide free lifetime software and security updates.
But if you’re looking for something even cheaper, there are options.
Are There Cheap or Free POS Systems?
There are some interesting ways to lower the cost of POS systems. If you’re trying to find the least expensive POS system possible, look into used and open-source POS systems.
Used POS Systems
Used options can save you some money by buying through a reseller, but there are a lot of things to be aware of. If you’re only after new hardware and software, it’s paramount that you make sure it’s compatible with your existing vendor. Some may be starting from scratch with no hardware, no software, and no account with a vendor. If that’s the case, know that your used POS purchase will also likely include merchant services contract with the vendor of that POS.
Open-Source POS Systems
These are based on open-source software, which is free and allows anyone the right to change or distribute it for any purpose. Open-source software is meant to be a collaborative benefit to the public. There are free, open-source POS systems out there. You can download them and use them on your existing hardware or mobile devices while paying no initial licensing or subscription fees. That said (and this is a big that said), the support, security, and maintenance of this POS software is less than established companies. They spend all their time making sure your POS system is secure, up-to-date, and functional. Proceed with caution.
The second most-important piece of bar and restaurant technology is covered under the phrase “restaurant management software.” That refers to a few different types of software functionality.
Types of Bar and Restaurant Management Software
There are hundreds of companies that exist only to provide their bar and restaurant software to you. Nowadays they’re pretty much all cloud-based, and their business model is “Software as a Service” or SaaS. It’s now the go-to way to turn the bunches of data that your business generates into action items.
When you’re shopping around for a POS system, keep in mind the different types of restaurant technology and bar management software out there. Some POS systems include a lot of that functionality already.
And if they don’t, then you’ll need to procure that software on your own. You’ll need to consider software for restaurant and bar inventory, purchase and invoicing, accounting, reservation, and scheduling.
Restaurant and Bar Inventory Software
Software that manages your inventory is likely the most impactful bar and restaurant technology you can find. It not only helps you do the actual counting, but it takes all that data and spits out super valuable metrics. Then you can use those metrics to help control food and liquor costs and boost profit. These are the primary benefits:
As any bar manager or beverage director knows, accurate inventory counts is the beating heart of a well-run, profitable bar. But without inventory management software, it is exactly that: counting. Manual counting. Error-prone counting. Restaurant and bar inventory management software streamlines that completely. Typically using a scanner like BinWise Pro does. Instead of combing through your stock and marking every individual item down manually, you point and scan. The software updates the inventory levels automatically.
Having a perpetually accurate inventory is another huge benefit of using inventory management software. As you take inventory, your current inventory levels automatically reflect the reality in your storage areas and behind your bar. This gives you a great idea how much alcohol you’re using, which you can then compare to how much alcohol you’re selling. That’ll be your bar’s variance.
A huge area of opportunity for restaurants and bars is accurately calculating and lowering their variance (also known as shrinkage and loss). Bar inventory management software has up-to-date inventory. That means it can calculate usage rates, compare that with total sales, and provide variance numbers at a moment’s notice. Variance for different revenue centers, product types, product brands, and more. Using bar inventory software, the ability to drill down into your liquor loss is unmatched.
Par Level Reporting
Using inventory management software helps you easily set par level. That’s the ideal amount of product to keep in stock to avoid running out or having too much cash tied up in sitting inventory.
Before committing to an inventory management software, ask these questions:
- Can smartphones and mobile devices be used as scanners when counting?
- How granular does the variance reporting get? Does it drill down into the variance of separate revenue centers?
- What waste-tracking tools are available to help you reduce over-pouring, over-ordering, and theft?
Purchasing and Invoicing Software
SaaS companies in the food and bar technology space can also streamline bar and restaurant purchasing. Usually that’s through individual reps at individual vendors and results in an ever-growing pile of individual invoices. The two primary benefits are:
- The ability to purchase quickly online through one platform from all of your vendors, while still maintaining direct vendor rep communication.
- Receiving one digital invoice per order that’s saved and tracked in the platform. You don’t have to make sense out of a bunch of separate invoices. You can also access historical product and purchase price data for smarter future purchasing.
Before committing to a purchasing and ordering software, ask these questions:
- Can direct vendor rep be maintained even if that rep isn’t using the same purchasing or ordering software?
- What analytical tools are available to make use of the historical product and purchase price data?
- Accounting Software
Cloud-based restaurant accounting software will handle everything related to dollar signs. Up to and including making sure you’re running the most profitable business you can.
Some features in great bar and restaurant accounting software are:
- Location-specific accounting that collects your overall ledger, all accounts payable and receivable, bank and creditor reconciliations, forecasts, and budgets in one central dashboard
- Communication with your inventory and operations costs to quickly create budgets for any time frame and any location
- Integration with many top payroll providers and POS systems to combine all your internal labor data for review and reporting
Before committing to an accounting software, ask these questions:
- Exactly what payroll providers and POS systems does the software integrate with?
- Does the software have daily profit and loss reporting?
The expectation among guests is that there is some way to book a table at your restaurant online. Assuming you accept reservations. Customers hop online, head to your or the software company’s website, and input their reservation time and size. Then that information shows up in the computer at your host or hostess stand. It’s shown over a diagram of your dining room.
In total, restaurant reservation software gives you:
- Access to all the potential diners out there who aren’t so keen on making phone calls.
- An accurate, real-time look into your expected traffic for the evening, so you can assign stations and staff accordingly.
- The ability to seat and turn guests quickly with updated table statuses, so no recently-deserted table is left unbussed and unsat for long.
- Server and station statistics to make sure everyone is being sat equitably, nobody is too weeded out, and service and seatings run with ease
- A place to keep information and notes on guests for any special accommodations needed
You pretty much can’t miss with a platform like this.
Before committing to a restaurant reservation software, ask these questions:
- Does the platform allow future diners to prepay? Some do.
- Is there a fee per reservation made through the platform’s website? Some platforms have their own customer-facing presence and allow customers to book outside of your website, and they charge a fee for it.
- Is the platform web-based? Believe it or not, some reservation software isn’t downloaded, you just log in and start using it.
- Is it…free? Seems silly, but some are free. They offer paid add-on features, but basic functionality is free.
Creating a bar or restaurant schedule can feel like the final moments of losing a Tetris game.
There aren’t many industries that require multiple shifts throughout the day with multiple people coming and going at different times.
One of my previous managers at a restaurant had trouble with this. He’d wiggle his hands above his head and yell “I gotta make the schedule!” As he was running off into his office to make the schedule. He didn’t come out for hours.
Don’t be like that guy. Use scheduling software. Here’s why it’s so great:
- AI auto-schedules everything, removing the physical act of filling in each shift on each day. A computer does it in a single moment. Presto!
- Labor forecasts take into account foot traffic, seasonality, and events to reduce needless wage costs and overstaffing.
- Flexible scheduling with real-time updates, making on-the-fly shift swaps simple and absences easily covered
Before committing to a restaurant reservation software, ask these questions:
- Can employees use their smartphones or mobile devices to access the master schedule?
- Can staff set automatic availability preferences?
- Will employees be automatically notified about schedule changes or request approvals and denials?
Embrace Bar and Restaurant Technology
Technology in restaurants is a good thing. Learning everything you can about restaurant and bar technology will ensure you end up with solutions that fit perfectly with your business model and management style.
In your search for bar and liquor inventory management software, it’s worth considering BinWise Pro.
It integrates with POS systems and streamlines taking and analyzing your beverage inventory. You’ll be making smarter ordering and pricing decisions from the outset. To say nothing of the many hours of taking inventory it’ll save you.
Read about it, then schedule a demo if you think it can help. It usually can, and a demo’s free, so why not?