Ultimate Guide To Restaurant Management Software

By Tessa Bahoosh|May 8, 2024|10:02 am CDT

Key Takeaways

• Restaurant management software refers to any type of software that helps a restaurant operate. This can include tools that focus on employee scheduling and management, order and payment processing, inventory management, and HR.
• A strong restaurant management platform can help employers improve efficiency and communication, increase profits, prevent errors, and automate repetitive tasks.
• By automating certain tasks and monitoring others, restaurant management software ensures businesses stay compliant, lawful, and profitable.
• It’s wise to look for a platform that is cloud-based, so you and your employees can access it across multiple locations and you can be prepared for any unexpected hardware issues.
• There are many features restaurant management platforms can offer. Some of the most important include clear reporting, integrations with other tools, order and inventory management, and good technical support.
• While many platforms claim to offer analytic reporting, not all of these reports are equally useful. It’s vital to find a platform that offers reports in a straight-forward, digestible manner. Better yet, look for a platform with a strong technical support team who can help you interpret your data.
• Automating tedious tasks is good for you and your business. By reducing the time you spend on these areas of work, you’ll protect yourself from errors, risky decision making, and burnout.
• The right restaurant management software can significantly improve ROI, employee satisfaction, and customer experience.

What Is Restaurant Management Software?

What, exactly, is restaurant management software? Well, it’s a lot of things. This is a broad term that covers many different kinds of tools.

Restaurant management software can be any kind of software that helps improve business operations. This can include tools that help with employee management, loyalty programs, delivery management, sales data—or anything else that affects your bottom line.

Further into this guide, we’ll get into the specific types of restaurant management software you might consider implementing. For now, just keep in mind that this is an expansive category. Your software might include order and sales management tools, employee scheduling platforms, and more.

What Are The Benefits Of Restaurant Management Software?

There are many kinds of restaurant management software and, therefore, many different benefits. Let’s review a few of the possible outcomes you might see when you use these tools.

Improved Efficiency

The best restaurant management software will improve your business’s accuracy and efficiency. These two elements go hand in hand. After all, nothing wastes time like rushing to correct a needless mistake.

Let’s consider the ordering process as one example. Many restaurants stumble here, especially if they still rely on paper order tickets. It’s all too easy for servers to write an order down incorrectly or to take an order without realizing it’s sold out.

Automated ordering software, like a point-of-sale (POS) system, can solve many of these problems. With a POS system, servers can see important information about menu items, and instantly send the orders to kitchen staff. This is a much quicker and less error-prone method of ordering. Many fast food restaurants are taking the efficiency even further by installing order kiosks, where diners can place orders themselves.

Employee management software can also greatly improve efficiency for HR tasks like hiring and training. By having a reliable system in place, you’ll skip many of the challenges and wasted hours that often come with managing your workforce.

Increased Revenue and Profit

When you invest in better software systems, you typically wind up with better data. This is a critical step to improving your restaurant’s profitability. Without understanding your data, you’ll never be able to make strategic choices for operational improvements.

Let’s illustrate this point by looking at inventory management software. This software will keep you informed about your restaurant inventory, and can offer crucial insight into where you are overspending. If your inventory software shows that you never have enough brussel sprouts to go around, for instance, that’s a great opportunity to lean into a popular dish. Conversely, if you wind up throwing away pounds of cherries every month, that’s a serious problem. Food waste costs full-service U.S. restaurants $16 billion each year—and gaining control of your inventory spending is a great way to improve profit.

That’s just one example. Clean, accurate data will also make it easier for you to make smart hires, schedule workers appropriately, and even adjust your floor plan. Scheduling workers manually? You might be pushing them into overtime without even realizing it. Handling employee management tasks with automated software can result in significantly improved ROI.

Reduced Human Error

The more tasks you automate, the less room there is to make costly or dangerous mistakes. This is vital in the restaurant industry, where even one negative customer experience can severely damage your reputation. Just one labor law violation could land you in a lawsuit, even if you had no negative intentions.

Let’s say, for instance, that you’re manually planning staff schedules in Excel. Maybe you even have Excel set up to highlight cells if you accidentally schedule a worker more than 40 hours a week. While this is a step in the right direction, it doesn’t prevent the myriad issues that can occur during employee scheduling.

Perhaps you employ young teenagers as part-time servers. Excel might not account for child labor laws that determine what type of work they can perform. Did you accidentally schedule a 15-year-old server for too many hours on a school day? Did you schedule them for a kitchen shift without an adult present, meaning they would have to operate potentially dangerous appliances? Any of these mistakes could land you in hot water.

Similarly, human error could result in you paying overtime incorrectly—especially for tipped workers, who operate under different minimum wage rules. Even mistakes not related to pay, such as scheduling a worker during a period they have requested off, can create serious issues.

The restaurant industry is complex, and there are many ways to violate labor laws without even realizing it. But with employee scheduling software, you don’t need to worry about keeping all these rules in your head. An automated system can anticipate these issues and prevent them before they even arise.

Automate Tedious Tasks

You probably run a restaurant because you love the work, feel passionate about the food, and want to serve the community. Do you really need to spend your time generating sales reports or forecasting labor costs? If you have the right restaurant management software, the answer is no. These tools can handle these tedious—but vitally important—tasks for you.

Not only that, but automating the tasks you find dull can actually improve your business operations—and help you do your best work. Studies have found that being bored at work leads to riskier behavior, including poor financial decisions. On top of that, boredom is connected to burnout. If you can save yourself the sense of tedium, you’ll be better equipped to keep showing up as an engaged, passionate leader.

While there are certainly restaurant leaders out there who love the time they spend on paperwork and reporting, no one is immune to mistakes. Software can help you reclaim the time you would otherwise spend on tasks that can be completely or partially automated.

Improved Communication

Restaurant software can improve communication between yourself and your staff, between front-of-house and back-of-house workers, and even between your restaurant and customers. This means it can also improve customer experience, workplace harmony, and retention.

Let’s consider software that helps with menu management, like a POS system. With this software in place, you can adjust the menu at any time without worrying that your employees will be taken off guard. They will have the updated digital menu right in front of them, meaning they’re far less likely to give a customer inaccurate information about the menu.

Likewise, you’ll know that kitchen staff and front-of-house staff are working with the exact same information. You won’t have as many servers running back to the kitchen to ask for clarification on menu items, and you won’t have as many kitchen workers becoming frustrated with unclear orders. Instead, the whole staff will be able to focus on their immediate tasks while working as a cohesive team.

What To Look For In Restaurant Management Software

We’ve gone over the importance of having strong restaurant management software. But how do you pick the right platform for your business?

Your needs may vary depending on whether you run a small business, a franchise, or something in between. Regardless, many of the same software features will come in handy. Here’s what you should look for.

Cloud-based

Cloud-based technology refers to any software stored on the cloud rather than in local files. In almost all cases, cloud-based platforms are easier to use, more cost-effective, and more reliable than local solutions. Even if your work computers go down, you can still access cloud-based platforms from a personal device.

Cloud-based software also offers unique functionality that restaurant employers may need. Because this software is accessible from anywhere, it makes it easier for employees to swap shifts, put in their hours, or request time off. This is vital in an industry where staff often work irregular hours.

Accessing your software from any location also comes in handy if you have multiple restaurants or hope to franchise eventually. On top of that, it can save you time and confusion if you offer catering services or set up a temporary pop-up location. Even if you only manage a single location now, it’s often easier (and more affordable) to invest in a cloud-based system from the beginning than making the transition later on. If your business changes in any way, operating from a cloud-based platform will save you a lot of headaches down the road.

Integrations

Restaurant management is complicated. As an employer, you’re probably handling any number of tasks, from creating employee schedules to running your takeout platform.

If you relied on a different platform to do every task associated with running a restaurant, you’d have more platforms than we could count—and more than anyone wants to pay for. Whenever possible, it’s far better to use a platform that will integrate with your other tools.

Look for management software that fulfills multiple functions. If you’re looking at staff management tools, for instance, you’ll want a platform that can handle scheduling, hiring, and time and attendance. This all-in-one approach will typically offer much better value (and much less confusion) than several disconnected tools.

Sales and Tax Tracking

Restaurants and restaurant workers are subject to unique tax rules that vary by state. You will pay taxes differently depending on whether you are the sole proprietor of your small business or a corporation. Your tax rate will depend on your business’s revenue. You may also need to make additional payments in accordance with state and local restaurant and sales taxes.

Many factors can change your tax rate as a restaurant owner or manager. To set yourself up for success (and avoid costly penalties or even lawsuits), look for restaurant management software that integrates restaurant taxes into its model. Ideally, you want a platform with a proven record of helping restaurants stay profitable and compliant while managing their taxes correctly.

Order Management

An order management system (OMS) is any platform that helps you monitor order processing and tracking. These tools can help you track both dine-in and takeout orders. They also help you keep an eye on inventory so that you can deliver delicious food on time with fewer surprises.

Order management is a key feature of any software that helps manage your restaurant’s workflow. With an OMS, you’ll get real-time insight into the orders that still need to be fulfilled—and, in the case of takeout, your customers will get updates on the status of their orders.

Although order management is important for all restaurants, it is significant for businesses with third-party delivery services. In this case, order management streamlines the entire process, acting as a coordinator between delivery providers and your restaurant. This means fewer mistakes and much improved visibility for you and the customer.

Inventory Management

Managing your inventory effectively is one of the most important steps you can take to boost your restaurant’s success. If your inventory runs low, you’ll be forced to adjust the menu, which can lead to a negative customer experience—but that’s just the tip of the iceberg.

Poor inventory management will also inevitably drive up costs. Depending on your timing and vendor relationships, you may need to restock at a premium. Running out of stock is only one issue—investing in too much inventory is just as big of a problem and arguably even worse for business.

Food waste is a leading expense for restaurants. While you might not be able to predict every order your customers make, better inventory management software can help you forecast these demands, allowing you to purchase stock more strategically.

If you have a dessert on the menu that calls for unique and expensive ingredients, you’ll need to sell more to justify its inclusion. That might sound obvious, but making these calculations without specialized software is often difficult. Restaurant management software that tracks your inventory can greatly simplify this task.

Clear Reporting

When implementing new restaurant management software, ensure it offers clear, accessible reporting. Good data can inform your whole restaurant strategy, from hiring decisions to menu management. But this data is useless if you don’t understand what it’s saying.

That’s why ease of use should be one of your primary concerns during a software demo. The more user-friendly a restaurant management system is, the more likely you will be able to interpret and use its findings.

Ideally, look for a platform that offers actionable insights alongside its data—or look for a support team that knows your industry well enough to make recommendations.

Technical Support

The basic purpose of restaurant management software is to make your life easier. You will likely spend some time adjusting to your new platform and getting to know its features. To get the most out of a new tool, start by ensuring it has a strong customer support team.

Technical support takes many forms. Some platforms assign customers a representative who will work with them as long as they use the software. Others will offer a robust library of resources so customers can help themselves and easily reference materials as needed. Whatever approach you prefer, be sure there is support available and a way to lodge questions when needed.

Your customer support representative should know the platform and the hospitality industry. It’s a good idea to make sure that your platform of choice is focused on restaurants and hospitality—that way, whoever you interact with will already have a basic knowledge of your business model.

Types Of Restaurant Management Software

We’ve reviewed many features an integrated restaurant management platform should offer. Now, let’s explore the specific types of software you might consider.

POS Software

A point-of-sale, or POS system, is software that manages orders and payments. Fundamentally, your POS system will help you at the moment (or point) of sale—so if you take an order digitally and accept payment the same way, you are using a POS system.

POS systems often integrate with other tools, transforming them into complex, full-service management platforms. They may help you manage your menu, floor plan, kiosks, delivery schedules, and reservations. If a POS system is truly expansive, a restaurant may even use it as the primary (or only) operations management tool.

However, it’s less common for a POS system to offer labor tools, such as schedule management. That being said, your POS may be able to integrate with scheduling platforms. This has a few benefits. For one thing, it allows for more straightforward recordkeeping—you’ll immediately know exactly who closed on Saturday night and who opened on Sunday. A POS system that integrates with scheduling can also allow employees to clock in and out from the same system they work with throughout their shift, reducing the chances anyone forgets to manage their time and attendance.

Employee Scheduling

Employee scheduling platforms offer tools to help you build, anticipate, and manage staff schedules. These platforms provide many advantages over paper schedules. Digital schedules are easier to share and to alter as needed. Better yet, scheduling platforms can help you automate the entire process. Employees may be able to log into the platform and directly request shifts—or the platform may be able to generate schedules that follow your standard guidelines automatically.

The restaurant industry is full of nuanced labor management laws that affect your schedules. It is illegal, for instance, for 14- and 15-year-olds to work more than three hours on a school day. If you’re scheduling employees for overtime, meanwhile, their rate must be at least one-and-a-half times their regular rate, including tip. Without a centralized employee scheduling platform, you might not even realize that you’re overbooking a teenage employee, or pushing a worker into overtime.

Restaurant management software can be a huge help in making sure your schedules are fair and lawful. A strong platform that is built for your industry will already understand the laws surrounding employee schedules. It should automatically flag any issues, or prevent them from happening in the first place, leaving you with one less thing to worry about.

Reservation and Booking

Although reservations may be managed through a POS system or a related platform, some tools specifically focus on managing bookings. These platforms often offer a customer-facing tool so diners can book a reservation directly through your website. If you operate a waitlist, reservation software can help keep this streamlined and organized.

Some reservation and booking apps help you make the most of your floor plan with automatic seating optimization. These tools may also offer communication tools so you can stay in touch with diners and data insights to help you predict your busiest hours.

From the customer’s perspective, an attractive, easy-to-use reservation system is a huge plus. These tools make it possible to make a reservation anytime—even when the restaurant isn’t open. When given this chance, diners may be more likely to book a reservation when the whim strikes them. Reservation management systems also commonly send diners automatic reminders about their upcoming reservations. This can reduce the chance of no-shows and eliminate the work associated with calling customers to double-check if they’re coming.

Inventory Management

Inventory management tools are designed to improve your ROI by ensuring you have adequate inventory without wasting money on stock that won’t be used. Food waste is a major problem for restaurants of all sizes. Getting ahead of this issue immediately sets you on a stronger path toward sustainable profitability.

Ideally, your inventory management tools will integrate with your sales tools. When these two features work together, you don’t have to worry about manually calculating how much inventory you use each day. Instead, your inventory management tool will simply receive sales data and translate this into how much stock was used. It can then prompt you to order more stock as necessary.

Human Resources

You may also use a dedicated platform to handle HR items, such as running background checks, tracking applicants, and managing payroll.

While having a platform that can cover all your basic needs is important, it’s also worth considering what additional tools are essential to you. HR platforms can provide various features to support training, career advancement, and retention. Some platforms offer on-demand pay, for instance, or assistance in creating employee handbooks.

It should be no surprise that HR software is most useful when it integrates with your other tools. You’ll save yourself many potential errors if, for instance, your payroll integrates directly with time and attendance. That way, you won’t have to worry about porting information between platforms—which can be a risky process in terms of introducing human error and opening yourself up to cybersecurity concerns. It is far safer and more convenient to invest in tools designed to integrate with each other.

Managing your restaurant is a long road, but you don’t have to walk it alone

You know your restaurant better than anyone. Only you can say what support you need from a restaurant management platform.

No matter what your needs, software can help. Software is available to help you improve ROI, maintain a healthy workforce, and improve customer satisfaction. While no single platform can make a successful business, they can clear your pathway to success and give you the time and peace of mind to focus on building a thriving restaurant.

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