Research Paper On Impact Of Point-Of-Sale-Systems POS In Traditional And Fast Food Restaurants

Running head: IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 1

Impact of Point-Of-Sale-Systems (POS) in Traditional and Fast Food Restaurants

Name

Institutional Affiliation

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 2

Abstract

While Point-of-Sale- Systems has been applauded for its far-reaching importance to

Restaurants, very little research exists on its impact in Traditional and Fast Food Restaurants.

This study aimed to examine and consequently offer a comprehensive analysis of the effects of

SOS on traditional and fast food restaurants. The inclusion of technology at various points of

operation in the field of business and other areas is a step worth noting. The study, therefore,

sheds light on the crucial role played by the system in traditional and fast food restaurants. The

research further analyzed the correlation between SOS and cost of food, loss prevention,

accounting, and staffing and seasonal trend analysis. The findings of this study suggest SOS has

increased efficiency, expanded payment capability, improved accuracy, and has both inventory

and employee management factors that have greatly benefited both traditional and fast food

restaurants. A descriptive, analytical study was conducted in different journals, publications, and

other sources. Data was recorded and further analyzed. Findings of this study are of great value

as it adds on to the existing literature while bridging the numerous gaps left by previous studies.

The findings suggest that SOS is of critical value to the Restaurants and should, therefore, be

embraced by the stakeholders.

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 3

Traditionally, the restaurant's point of sale system was where customers made payments

in exchange for goods and services. It included touch screens, terminals, and other hard and

software options used to enable transactions. Modern POS is however referred to as the point of

service instead. The modern POS provides a platform that sits at the heart of any beverage and

food operation, both large and small thereby helping hence customer experience while

streamlining business operations. The system allows operators process orders as well as

maintaining financial control of the businesses and consequently integrate payment service

providers. Due to the tighter margins, traditional and fast food restaurants need the POS to be

relevant in the market. The system has numerous impacts as discussed below.

Technology dictates what is done in and around business as well as how customers are served.

The coming POS into the restaurant and fast food industry have seen many changes effected. A

lot of benefits, however, accrue to restaurant owners who deploy the system (Seals, 2016, p. 77).

An integrated restaurant POS today offers; inventory management, reporting and analytics,

loyalty and gift, labor management and loss prevention. The system is thus essential to food and

beverage operators who want to offer a fantastic guest experience to keeping control of their

costs, growing their revenues as well as improving the overall profitability.

Importance (Advantages) of a Point-of-Sale System

Restaurant and fast food operators need to acquire the services of this system to enjoy its

valuable services. The system has numerous advantages worth applauding. Its introduction into

the Restaurant industry is thus imperative. The following its advantages;

Ease of Use

Cash registers fall further out just like the days of analog technology. Today, everything

is digital and touchscreen. The system is straightforward and easy to use thus saving operators a

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 4

lot of time. Navigating the touchscreen has become a common norm in the current generation

(Seals, 2016, p. 127). With an intuitive interface, POS software is simple for employees to learn

which result in shortening training time thus saving employers of resources used in long training.

The system, therefore, helps the restaurants to be more productive overall.

Increased Efficiency

Provision of the right tools to cashiers support their work and consequently make

operations more efficient. The system offers unique operations for every food and beverage.

With this, it meets the high expectations by the guest for the services provided. POS enables

restaurant offers customers a perfect experience while keeping operations running smoothly

hence maximizing satisfaction (Seals, 2016, p. 70).The system allows operators to achieve

optimum speeds in quick services. POS system is thus a recipe for quality and efficient work.

Expanded Payment Capabilities

Unlike some systems that do not accept payment of various kinds, POS allows operators

to transact diverse payment types such as mobile wallet payments, contactless payments, and

EMV chips. By enabling restaurant guests to use diverse payment types, both customer

satisfaction and revenue are increased (Koutroumanis, 2011, p.77). Different people have

different preferred modes of payment. Using the system will thus satisfy the various methods

preferred by customers hence improving on the revenue collection thus profits to the businesses

(Koutroumanis, 2011, p.79).With this, the cash is slowly losing its reign in the industry while

giving way to a new queen in town, plastic.

Greater Accuracy

Accuracy is an important element in business transactions involving money and other

calculations on valuable items. Restaurant and fast food operators just like other businesspeople

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 5

require systems that offer the best accuracy regarding service. A point of sale system with a

touchscreen interface puts all information required by sales associates, and other cashier

information needed at their fingertips (Koutroumanis, 2011, p.73). The technology has therefore

improved accuracy throughout the entire operations of the fast food and restaurant industry with

real-time data hence a significant impact on the same (Martinez, 2010, p.77). It has further

eliminated the need of uploading or entering data into back-office systems thereby minimizing

risks and hazards resulting from human error. A lot of money and other losses have thus been

averted thanks to the system.

Employee management

A lot of time was traditionally wasted on schedules and schedule enforcement. Many

business organizations often find it difficult to have their employees follow these schedules.

However, with the POS system time spent on such activities are substantially minimized.

Modern POS includes time clock functionality that improves employee management (Wang, et

al, 2010, p.80). With this, the employee can clock in and out on a POS terminal. Restaurant

owners, therefore, enjoy the advantage of having access and control on employee identity

through clock-ins. The system reduces employee theft, voids and returns (Martinez, 2010, p. 22).

The system is thus an innovation that helps in safeguarding business property while instilling

integrity into employees.

Inventory Management

Unlike cashier register and other traditional modes of payments, the point of sale

technology includes advanced management capabilities. The system offers product quality

tracking and setting up reorder triggers and a retail matrix hence saving operators hours of

inventory management (The Point of Sale Application System for Retail industries all Over the

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 6

World, 2018, p. 105). The system gives real-time data inventory something that even best and

celebrated cash registers cannot do.

Simplified Accounting with Detailed Receipts

One of the notable areas that have received far-reaching impacts of the POS system in

traditional and fast food restaurants is the accounting area. It has helped streamline. Unlike old-

fashioned cash registers that forced accountants to sort through numerous receipts, with POS,

one can print reports and import data directly with the accounting software. Accounting work has

therefore been extensively simplified thanks to the system (Koutroumanis, 2011, p.74). Besides

the si8mplification, customers are now provided with more detailed receipts rather than just a

slip of paper with date and amount of the sale. The new system uses inventory data to provide

much more information on price, item description as well as savings from a sale (Kim & Lim,

2011 p. 1350). It also offers a possibility of customizing the receipts with a footer which can be

used to provide loyalty information return policy or other custom messages.

Faster Service

Human beings are always in a hurry and therefore require faster services. Making long

checkout queues often make customers feel bored and frustrated due to their tight schedules.

POS system has however come to the rescue as it provides a faster checkout process than cashier

registers (Kim & Lim, 2011 p. 1349). The technology uses a barcode scanner to ring up the

products thereby making the most of the checkout experience to engage customers and ensure

they leave with a good impression of the brand with a promise to visit again (Martinez, 2010,

p.66). Point of sale is, therefore, an imperative step in service delivery in the food and restaurant

industry.

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 7

POS solutions are impeccable and consequently lowers the cost of running business

activities while increasing productivity thus profits to the business (How Cloud-Based POS

Works, 2015, p. 86). Technology is redefining service in hospitality and mobility is a huge part

of this evolution. The restaurant must, however, be careful about choosing the right POS system

as this is critical to the smooth running of the business. It pays greatly to understand what one

wants and needs.

The myriads of advantages that business people enjoy courtesy of POS systems have

impacted the traditional and fast food restaurants as immensely. The section will, therefore, give

comprehensive coverage of specific areas in the industry that have experienced the impacts. It

will further highlight the particular changes and modifications introduced by the technology in

such areas while mentioning the benefits of such impacts (How Cloud-Based POS Works, 2015,

p. 16). The areas covered include; the cost of food, proper inventory control, the impacts on

spoilage, loss prevention, proper staffing, seasonal trend analysis, accounting and other vital

implications introduced by POS.

Cost of food

The point of sale system has improved the quality of service delivered to customers in

restaurants. Customers and guests do not have to waste a lot of time in queues waiting for

services with this system. Instead, they make orders and get served immediately while making

payments using the types of payments they so wish (Kim & Lim, 2011 p. 1336). Customer

experience is therefore improved due to well track of food inventory. The system has

consequently led to a slight increase in the cost of food due to improved quality of service

delivered. The system has led to track of kitchen performance, kitchen efficiency, enhanced

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 8

food quality, reduced errors and increased the speed of service (Kim & Lim, 2011 p. 1340).

Restaurants have thus increased the cost of food albeit by a small margin.

Proper Inventory Control and the Impact of Spoilage

Inventory management is very essential to the success of any business. Achieving

effective inventory control is however not easy. However, POS has enormous impacts on

inventory thereby helping restaurant operators in meeting the demands of consumers who insist

on purchasing whatever they want and when they want it. The system thus optimizes inventory

management practices thus reducing losses (Frazier, 2013, p.70). POS has ensured happiness to

customers while reducing losses by basing orders on favorite items based on previous sales

figure while setting minimum re-order levels, accurate access and reports specific quantities.

This is important to restaurant owners since it reduces the chances of making losses and

spoilages unlike in traditionally when orders were based on guesswork and hearsays a factor that

led to many losses and from spoilage. Another impact of POS on inventory management is low

storage costs. The system is an excellent weapon against big bills for inventory (Frazier, 2013,

p.177). The system does not allow purchasing of large quantities of an item that will truly sell

and its use is hence leading to purchase of the only amount required thus less money is used on

storage fees.

Loss Prevention

Effective use of POS system leads to important steps vital in preventing losses and

reducing them a great deal. POS records any information within the inventory management

module thereby making it easy to identify which items are moving faster or slower in the shelves

(Frazier, 2013, p.40). One can, therefore, use this information to mark down the slowly moving

items for rapid sale and consequently avoid re-ordering such items or adjust their quantities

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 9

according to the market demands. In so doing, POS helps in loss prevention since purchases are

made depending on the Rate of Stock Exchange as provided by the system (Frazier, 2013, p.77).

Restaurant owners have benefited a great deal from the system since little goes to waste when the

system is in place and effectively used.

Proper Staffing

The system provides a report on the productivity of staff as well as tracking on the same.

Restaurant owners using the system can evaluate the productivity of their staff and make

adequate changes depending on the report provided. The system simplifies communication

between the kitchen and wait staff. Communication is an important factor in any organization.

All activities and success of business revolve around communication (DiPietro, et al, 2012, p.

43). With effective and well-coordinated communication, success remains the only option. With

POS, orders go through the computer directly into the kitchen printer. It thus improves

communication thereby instituting a proper and productive staff. The business owner can track

cash flow, sales and thereby improving the integrity of workers. This impact on adequate staffing

is of great value to restaurant owners.

Seasonal Trend Analysis

Optimizing inventory and sales of seasonal products is an area that requires a

comprehensive and holistic analysis. Understanding the trend will thus enable business owners to

make adequate preparations to amass maximum profits from such sales (DiPietro, et al, 2012, p.

133).Weather directly affects some transactions in the fast food restaurants. It is therefore

prudent for owners to take advantage of this to maximize the profits. Point of sale system

captures and gives an analysis of products and the seasons during which they best sell (DiPietro,

et al, 2012, p. 33). The aggregate sales data figures provided weekly by POS, give numbers and

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 10

impact of weather on the products that make up the sales. The system further provides an

extensive statistical analysis of products and their buying behavior. Owners, therefore, use such

information for the business owners benefit.

Accounting

Accounting is the most important department in any organization. It is indeed the focal

and central point whose existence steer the workings of other departments. Care is often taken to

ensure everything runs smoothing within this organization. Efficiency, accuracy, and reliability

are three critical factors commonly required in the system (Cohen & Story, 2014, p. 586).Any

technology that offers these is hence counted a success. POS has immense impacts on

accounting. It has led to improved quality of services at with high rate of accuracy. It has

expanded payment capabilities a factor that has seen restaurants receive payments from different

methods. This is a great revolution in the accounting history hence a worth noting impact of

POS. It also offers quality and comprehensive receipts with all information on products and

services paid for (Cohen & Story, 2014, p. 587). The system has further reorganized

bookkeeping process. In doing this, the system has enabled printing of reports and importation of

data directing from the accounting software.

Other Areas of POS Impact

Pont of sale system tracks each purchase and assigns points of total value, overtime

notwithstanding. Through this, it builds loyalty and also increases the likelihood that a customer

will revisit the restaurant (Cohen & Story, 2014, p. 588). In essence, the technology escalates

sales by increasing the average transaction and number of visits. Through centralized control of

menus and promotions, restaurants have delivered a guest experience (Cohen & Story, 2014, p.

590). Customers receive quality services from the money they pay thus frequently feel satisfied.

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 11

This technology has impacted all quarters of the fast food and restaurants hence leading a big

revolution in the industry. Many studies have been conducted to shed more light on the impacts

of this imperative step in the industry.

Disadvantages of POS System

The system that links cashier and customers to an entire network of information thus

handling many transactions between the store and customers while maintaining updates on

promotions and pricing. Although a point of sale has numerous advantage, it worth not to

overlook its disadvantages. There are two POS systems currently in use; offline and online. The

main disadvantages that come along with the much-celebrated technology are; Connection

reliability (Cohen & Story, 2014, p. 589). The system relies on internet connection and further

requires ISP. An internet outage, therefore, makes users unable to access the system. Business

operations are likely to a halt due to such breakages leading to unanticipated losses.

Costly software updates is another disadvantage the system has. Unlike web-based

systems that provide free upgrades to keep them up-to-date, software-based systems come with

substantial costs attached. Upgrades are paid for every time they deemed necessary. New license

charges for the software are also incurred when the business expands (Bhargave, et al, 2013, p.

5). Thirdly, the system attracts costly monthly subscription fees for the web-based a factor that

reduces returns on investment in the long run. Fixing hardware used in the web-based system is

another difficult a task. Despite being able to contact manufacturers to help troubleshoot the

problem, the process is both costly and time-consuming ((Bhargave, et al, 2013, p.6). Customers

who use credit or debit cards in making purchases through the system are at risk of exposing

their personal information to other users. This security risk may lead to users being conned, and

money swindled from them (Bhargave, et al, 2013, p. 4).Lastly, the software-based are less

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 12

convenient hence disadvantageous to users. One needs more than a computer to access inventory

counts and reports with a software-based system.

Users of the system should thus be aware of the few but costly demerits of the system.

Having a robust and comprehensive plan for dealing with the problems is the most effective way

of averting their effects (Bhargave, et al, 2013, p. 7). It is, however, worth noting that every

single system and technology must have a drawback.

In conclusion, it is right to infer that the Point of Sale system has a lot of benefits to the

fast food and restaurants thereby introducing numerous changes in the industry. Traditional and

fast food restaurants have immensely benefited from the technology. Customers are however the

most benefactors since they have enjoyed quality services, improved customer experience and

convenient mode of payments. The technology is thus worth embracing due to its enormous

benefits.

IMPACT OF POS IN TRADITIONAL AND FAST FOOD RESTAURANTS 13

References

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Cohen, D. A., & Story. M. (2014). Mitigating the health risks of dining out: the need for

standardized portion sizes in restaurants. American journal of public health, 104(4), 586-

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ajph.aphapublications.org

DiPietro, R. B., Crews, T. B., Gustafson, C., & Stick, S. (2012). The use of social networking

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http://www.na-businesspress.com/JABE/koutroumanis_abstract.html

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Seals, T. (13 June 2016). Wendy’s Point of Sale Hack Grows Bigger. Retrieved 15 October

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7, 647, 024, 2010-Google Patents

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Research paper on Impact of Point-Of-Sale-Systems POS in Traditional and Fast Food Restaurants

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