Restaurant Management: POS vs ERP Explained

Introduction to restaurant management systems

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

This blog dives deep into a comparison between POS versus ERP restaurant software, 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. 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 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. 

However, a restaurant POS can be used in limited locations, which means it is not well suited for multi-brand or branch F&B businesses. In real life, 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. 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, in an integrated manner. 

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.

An ERP system is used by 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. 

A business can’t outgrow an 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.