POS vs ERP for Restaurant Management

Introduction to restaurant management systems

If anything is certain about the F&B industry is that it will never stop evolving, aligning with customers’ behaviors, needs, or preferences. Technology plays a central role in supporting restaurants and other F&B businesses to keep up with the ever evolving needs of their clientele. 

In fact, there are numerous studies that support the rise of technology use across restaurants all over the world to align with customers’ increased demand for convenience and seamless experience, preference for digital experiences, or personalized service, loyalty programs, or promotions.

When it comes to the restaurant technology market, the offering is abundant, with restaurant software matching different needs or sizes of the F&B businesses. From the simple POS (point of sale) system that most establishments incorporate, to the advanced restaurant software, that is a restaurant ERP (enterprise resource planning), there are many other options available.

But how do you, F&B professionals, know which restaurant software is best fitted for your business?

This blog dives deep into a discussion about POS vs ERP for restaurant management, to help you understand which technology is best suited for your own F&B business.

What is a restaurant POS

Restaurant POS is a system used to record and complete all sales transactions, managing orders, and processing payments, only on a branch and store level. With a POS system, restaurants track customer orders, send orders to the kitchen, once these are placed, as well as generate invoices. Basically, a POS system covers all activities related to the front-of-the-house (FOH) in an F&B business.

A POS is mostly associated with a device, usually used to process transactions. However, a restaurant POS is more than the device itself, because it is integrated with the kitchen operations, implying a higher level of integration. 

Advantages and disadvantages of using a restaurant POS system

Using a restaurant POS system is well-suited for small F&B establishments, with a single branch, which do not require an advanced system to track sales, costs, profits, or cash flow from across multiple locations.

Another advantage of a restaurant POS system is that it is affordable, while ensuring efficient order management. This includes accurate sales tracking and streamlined order processing with reduced human errors.

On the other hand, a restaurant POS can be used for a limited number of locations, which means it is not well suited for multi-brand or branch F&B businesses. In real life, restaurants, cafes, lounges and other F&B establishments can grow from one to multiple locations across time, and when this happens, the business requirements outgrow the functionalities of a POS system.

Another disadvantage of a restaurant POS is that it is not natively integrated with other departments within an F&B business, such as inventory, purchasing, operations, finance and accounting, HR or marketing. In the absence of a native system that integrates all these individual, but interdependent systems, there will be a high reliance on manual work to centralize reports from all these departments to provide the accurate situation of how the business is performing.

Preparing finance and accounting analysis, inventory tracking, purchasing reporting or HR analytics can take weeks, or even months in exceptional, but not unseen situations. This leaves the business owners unaware of how their business is really doing in real-time, missing an opportunity to fix a problem that might have serious implications, or an opportunity to grow.

What is a restaurant ERP

A restaurant ERP is an advanced restaurant software that ensures a smooth flow of the data between individual, yet interdependent departments. The keyword in a restaurant ERP is unification. 

By ensuring the unification of multiple processes from across the front-of-the-house and back-of-the-house (BOH), F&B business owners avoid data duplication and ensure data integrity, in a single source of truth. In this way, the reliance on multiple individual systems that are not seamlessly integrated is eliminated, assuring centralization of the data and reducing human error, which improves efficiency.

An ERP system is used in F&B businesses to manage and automate core business processes, such as FOH, kitchen, inventory, purchasing (including logistics), operations, HR, finance and accounting, marketing, covering all processes within the organization.

Advantages and disadvantages of using a restaurant ERP system

Unlike a POS system, a restaurant ERP is suited for all types of F&B business, from single to multiple brands and branches, from quick service restaurants to fast food businesses, food trucks, cloud kitchens, cafes, lounges, fine dining restaurants, and more. 

Because an ERP is fitted to any business size, the business can’t outgrow the ERP, because its functionalities are well-suited to support and boost business growth.

Another advantage of using a restaurant ERP system is that it is created to provide accurate and reliable data, from across all data points within the organization, offering a timely and precise understanding about how the business is doing. Being integrated with inventory, procurement, accounting, HR, etc., it’s able to extract, in seconds, quick reports from across all these departments.

POS vs ERP for restaurant management: Experts’ recommendations

When it comes to restaurant POS, one size doesn’t fit all, and this is because in today’s increasingly digitized world, a POS is not enough to keep an F&B business profitable. Just because of its limitation to only provide sales insights, experts recommend using an ERP system for managing operations within an F&B business.

“You want to know exactly what is happening in your business, not just how much money you are making, but also how much you are spending, what is your profit, and your cash flow. Only by knowing all these numbers with accuracy, you can make the right decisions to increase your revenue, save costs, and overall, grow your business.”

Gav Martin, Operations Manager at Polaris Technology

Polaris ERP stands out as a comprehensive solution for F&B businesses by seamlessly unifying front of the house and back of the house operations. This all-in-one ERP system streamlines processes, enhances efficiency, and ultimately supports revenue growth while saving costs. By simplifying operations through a unified system, incorporating  inventory, sales, accounting, food cost calculator, or AI-powered menu engineering, Polaris ERP empowers F&B establishments to focus more on enhancing customer experience and driving business expansion.

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