VAT, COVID-19 and why cloud-based POS gives restaurants the agility to adapt

Restaurants are discovering the huge agility advantages of a cloud-based POS — over legacy on-premise systems — in how they respond to VAT changes and other COVID-19 challenges.

The sudden cut in VAT from 20% to 5% until January next year is great news for hospitality businesses looking for some temporary respite on margins. But it’s the latest issue to throw up complex technical challenges in an industry that’s having to adapt at lightning speed.

Some hospitality businesses are struggling, while others are taking each change in their stride. And it’s the tech they use that’s making the difference. Legacy, on-premise POS systems can be inflexible and slow to respond. In sharp contrast, the best end-to-end, cloud-based tech can evolve easily, with changes deployed at speed.    

VAT cheer or headache?

Dropping the VAT rate suddenly and then increasing it again in six months creates major technical challenges for some restaurants. The worst-case scenario affects chains with legacy on-premise systems at multiple locations. Updating each of these, against the clock, becomes a logistical and technical nightmare. Then there’s a repeat to come in January.

However, a fully-resourced cloud POS provider can roll out changes virtually — and at blistering speed. For example, iiko’s 100-strong development team added new VAT codes to the cloud the day after the Chancellor’s announcement. Then 48 hours later, launched a Tax Manager app in the iiko Cloud to enable customers to make VAT changes en-masse even easier.

The iiko POS changes also handled the important nuances around preserving some 20% rates on the system before the VAT reduction launch date to enable operators to prepare whilst protect historic reporting. Operators could make their changes in advance and iiko could run a script in the cloud to activate those changes on the VAT reduction date. Meanwhile, entry-level customers, such as small cafes, could make VAT updates easily themselves via iiko’s new app. 

But the VAT is only the latest agility issue where the difference between a cloud POS and a legacy, on-premise system is becoming all too clear.

What kind of POS partner do you want?

Restaurants need tech companies who behave like partners who are on a journey with them and committed to their success. When emergencies or major changes happen overnight, you need a partner who’s intuitively thinking one step ahead. Being able to act quickly — because the provider’s tech is end to end, they have designed it specifically for hospitality, they have significant development resources and they deploy via the cloud — is key to success. 

That’s the story with iiko and its UK&I customers over recent months. Here are five examples of how this has happened.

#1: Saving money for clients:

iiko is available as software-as-a-service using a pay-as-you-go subscription model. So when some customers stopped trading for a period during the pandemic, iiko was able to pause their software licences.

iiko felt strongly that it was their duty to support customers who were under tremendous financial pressure during the difficult period by reducing that stressor.

#2: Helping customers to adapt:

As restaurants looked to capitalise on the growing demand for take-out and delivered food, iiko launched New Editions, a complete solution to help businesses to launch and optimise off-premises services including Dark Kitchens.

  • Mobile delivery apps
  • Delivery tracking
  • Deliveroo integration
  • Open API for rapid integration with eCommerce platforms of choice, amongst others.

#3: Avoiding extra fees:

With direct integration to the likes of Deliveroo and Uber Eats, restaurants using the iiko POS can now avoid complexity and paying for extra licenses for middleware.

#4: Making ordering easy:

iiko has made online and mobile ordering capabilities available for customers. Now that venues have opened their doors again, customers can order via their phones from their tables, helping with social distancing. The orders are immediately injected into iiko.

#5: Powering innovation:

The pandemic hasn’t stopped iiko from investing. Just recently, the iikoNano was launched. This handheld POS is perfect for businesses that aren’t yet ready for a full-blown till, such as small cafés, kiosks, fast food outlets, food trucks and mobile/micro bars. It gives them the POS essentials they’ll need for tighter cost control — to protect margins over the tougher times ahead.

Discover more

With iiko, you can face the future with greater confidence. Our cloud-based POS gives you the agility to overcome unexpected challenges and seize fresh opportunities.

You can get everything you need in one platform, so you can get started quickly and accelerate successfully as your business develops.