As a food establishment on wheels, you have a unique set of circumstances related to taking payments, collecting tax, and connecting with your customers. If you’re a food truck operator, and you aren’t using Square yet, we can safely predict that your life is about to get much easier.
Luckily, Square is more than a payment processor and can help you run your business efficiently and conveniently. At this time, according to the company’s website, Square has already processed over $50 million in food-truck sales.
Maybe that’s why the app seems to know exactly what you need as a food-truck owner. Once you join, install the app, and receive your Square card readers, the ease with which you can handle a rush and your new streamlined workflow will probably surprise you.
But first, we’re here to help you set up your Square account the right way from the beginning, so you can get back to your food and your customers.
In this quick guide we’ll cover:
- What you need to start taking payments
- How to set your POS up for speed
- How to collect sales tax correctly
- What to do if you cross state lines
- What advanced features you’ll want to try in the future
Getting set up to take payments on the go is simple and quick with Square.
How to Take Payments
First, in order to take payments with Square, you have three options:
- You can use the free Square reader that you get when you set up your account.
- You can order one of the POS kits and add optional hardware like a cash drawer.
- You can use both the Square reader and a POS kit.
When you sign up for Square, you’ll provide your bank account and other information and then receive one of the Square Readers. This reader will attach to an iOS or Android device and allow you to swipe cards (not use the chip feature). If you need more readers for employees, you can request them for free.
With the Square Reader plugged into your device, you can then download the free Square POS app and you’re ready to set up your Dashboard and begin taking payments. Likewise, if you opt to order the mobile POS kit. Once you have the hardware set up, you simply download the app and you’re ready to customize your Dashboard and begin.
One nice feature especially helpful for food trucks, beside the fact that you can get a Square Reader for everyone taking orders, is that you’ll be able to swipe cards and take payments even if you’re offline.
When you order a mobile POS kit, you can add a ticket printer that uses bluetooth and a chip reader.
If you do order the POS kit, you’ll have the option at checkout to add a mobile ticket printer and a cash drawer that connects to the printer. These items will complete your mobile register.
Once you’ve signed up for Square, it’s time to customize your Dashboard. This is your chance to set up your business to take orders quickly and process customers efficiently.
We’ll walk you through it.
How to Create Your POS Menu Items
To get the Square app ready for order taking, use your Square Dashboard online. Begin with the “Items” tab.
The Square interface is very intuitive, so this will be a breeze. The “Items” tab is where you enter the images of your individual menu items along with prices, taxes, and any discounts.
After you click on “Items,” select "All Items > Create Items" and set up your menu item, including name, price, category, description, and an image.
You can create variations to one item with different price points by tapping “Add New Price Point.”
You'll set up all your menu items with image and price in your Items Library.
This step can be time consuming, depending on your menu, but it's well worth it to get every menu item with every price point and applicable discount into your register. You definitely want to set up your Dashboard and Item Library with an eye on speed of service.
Note that once you’ve created your applicable sales taxes with the correct rates (we’ll cover how to do that below), you also want to select the appropriate tax rate to apply to each item. The tax rate is applied at the individual item level.
One important tip regarding the Dashboard is to make sure you keep your Dashboard up to date with current item names and prices and then update the app regularly so that it reflects any changes you make.
How to Set Up Sales Tax
A big challenge for you as a food truck business is that as you move from one location to another the tax rates that you’ll need to charge customers are likely to change.
Once you’ve named and set the rate for the tax, be sure to toggle “Enable tax” on.
In order to apply the correct sales tax rates, you’ll first need to find the correct rate for each of your regular stops. For each stop with its own rate, create a separate tax in your Dashboard. To do this, select “Taxes.” From there, select “Create Tax” and name the tax after that location.
The rate you enter for each sales tax location that you create in your dashboard should include all state and local taxes. You can find more information about rates from our State Tax Guides or from the Revenue Department in your state.
Once you’ve named and set the rate for the tax, be sure to toggle “Enable tax" on. You’ll also choose either “Add tax to item price” which shows the tax as a separate line item, or “Include tax in item price” which shows one combined price for the item that includes the tax.
Do keep in mind that Square’s fees are based on the total amount of each transaction including taxes.
After creating the tax, go back to the Items library and add it to each item.
Once you’ve created the sales taxes that will apply to your sales, go back to “Items” on the Dashboard, click on each item, and select the tax rate that will apply to that item. Done!
Once you’ve set up items and taxes in the Dashboard, Square offers a great deal of flexibility on the go.
When you move to a new location, you can change or remove the tax rate before making sales. If need be, you can even change or remove the tax rate at the time of sale.
What if Your Truck Crosses State Lines?
In the case of crossing state lines, you’ll create the specific state rates exactly as we described above. Again, you’ll need to check with our Guides or the Revenue Department for each state where you make sales (make sure you’ve registered to collect tax in each state) and find the correct rate for each stop. The possibilities you’ll face in this case are:
- The state has one rate regardless of the city or town.
- The state has one state rate, and additional local rates are set by the city or town.
- The state has no sales tax, and you’re off the hook.
Once you’ve created the tax for each location, just be sure to apply that location’s rate to individual items when you set up there, and you’ll be all set.
In some states, cold food items like ice cream will be tax exempt.
Should You Apply Tax to All Menu Items?
For the most part, the food you sell from a food truck will be considered “prepared food” for tax purposes. Some states and local jurisdictions tax prepared foods at their general sales-tax rate, while some have a special “meal tax” that will apply to most of your items. Occasionally, you’ll have situations in which you’ll apply different rates to certain items. This includes when:
- You sell an item which is generally considered a “grocery item,” such as a single apple or banana. In some states, these items won’t be taxed or will be taxed at a reduced rate.
- You sell bakery items without utensils which are meant to be eaten at home. In some states, these items will be exempt or subject to a reduced rate.
- You sell cold food items like ice cream. A few states exempt these items, others exempt only packaged ice cream products.
You’ll need to research the individual state tax guidelines to find out how to handle these situations if they apply to you and also to find out how “prepared food” is defined in your state. Just to make food-truck life interesting, every state and many locations within a state have different rules. For those located in California, that state’s Mobile Food Vendors Tax Guide will be a big help.
Square lets you take any type of payment on or offline.
What About Cash or Checks?
The good news is that with Square you’ll be able to accept any type of payment, and the app will still keep your books in order. You can customize your check-out screen to reflect all the payment types your business accepts by simply toggling each payment type on or off. You’ll be able to set up the app to accept cash, checks, and even gift cards. In this case, of course, Square doesn’t deposit any funds, but simply records the sale for your records.
To customize the checkout screen for payments, go to the “Payment Types” tab in the Dashboard. There, all the payment options will be listed. Toggle on any payment types you want to accept, and you’ll see those options reflected on the check-out screen at the time of payment.
Advanced Features of Square
Once you have your Square register set up for speed and ease of use, play around and get comfortable with using the app for a bit. Only then will you be ready to master some of the more advanced features that Square provides.
Some of the features that will make food-truck life easier include the ability to do the following:
- Set up individual employees with their own Square Reader to act as mobile registers and therefore streamline operations.
- Set up a tip calculator, so customers can tip with one tap at checkout.
- Set up real-time sales reports to analyze on the fly. For instance, quickly determine best-selling items and locations.
- Personalize your receipts and get real-time feedback.
- Respond to feedback in-app with coupons and refunds. Many don’t realize that Square provides customer-engagement software.
- Accept online orders to have ready for “take out” at an appointed time.
- Manage inventory.
- Easily and conveniently integrate with third-party providers, such as LumaTax and QuickBooks.
Learn More About LumaTax