A Guide to the Point of Sale (POS) System
A POS, or “point of sale” system, can help minimize your paperwork, monitor inventory, and sell to your customers in a convenient-to-use method, making it more efficient for you to run your company rather than stick to the details. Many POS programs are targeted towards smaller companies, and others are sector-specific.
For instance, a POS system can improve a florist record if a bouquet is still in the store, out on a transportation truck, or already delivered, without having to detect the delivery driver. The benefit of the POS system is that all the information is stored and saved in one database, making it possible to browse for any piece of information and relate it to others through reports to keep your business operating efficiently.
In this regard, we shed light on some useful tips on what you need in the POS and how to select the best choice for your retail store or restaurant. Keep on reading to learn more.
What is a Point of Sale (POS) System?
The point of sale system, or POS, is the place where your customer pays for products or services in your shop or business. To put it bluntly, each time a client buys a product at your store, they accomplish a point of a sale transaction.
The POS is the critical component of your work. It represents the core where everything like revenues, inventory, and consumer management joins.
Today, more than 56 percent of single-store vendors still do not use one. Instead, many still use a variety of manual processes, cash registers, QuickBooks, and Excel for accounting purposes.
So why have retailers not decided to implement POS yet? The truth is, sometimes, introducing new software, particularly technology that is essential to your business process can be frightening and strange. Merchants need to understand the outcomes of not making a POS in place.
Companies take the risk of reducing their sales and failing vital data that could allow them to expand their business more smoothly. Today, it is crucial to understand what a POS system is, its software and hardware elements, as well as the required skills to make an intelligent purchase decision.
Software Components of a POS System
So, what is a POS system, exactly? A POS system consists of software and hardware modules which make it a lot easier and safer to manage your daily business operations. It is crucial to understand what options are available for POS technology and what each has to deliver.
New POS devices have a point-of-sale front end and a back-office side for behind-the-scenes insights and administration purposes. The staff handling transactions uses the front-end interface, usually on a touchscreen display or laptop monitor.
Despite your kind of POS software, these two can be linked and synchronized, but there are two approaches that data can be saved:
- The program is initiated ‘locally’ on your server, i.e., on a device located on your store’s bases.
- You need to buy one or more operating system licenses.
- You should learn to manage and manually upgrade this kind of program.
- As all software is centered on your private computer system, the internet is not necessary.
- The software is online. The information is saved on the Internet servers of your POS service, allowing you to reach it from any device on your computer.
- Also labeled software-as-a-service (SaaS), this program is automatically managed and reviewed by your POS operator. However, it is still suggested that you use the current version of the POS application.
In this regard, flexibility is essential. Therefore, make sure that your POS provider operates with the payment system of your selection so that you can manage costs.
The on-site POS system has been the rule for programmed POS operations for a while. However, it is now more accessible to use cloud-based or hybrid systems that rely on both internet and local storage. On-site POS software appears to be high-priced to set up, often requiring technical assistance and professional maintenance. Cloud-based systems turn to be more affordable (usually charged as a fixed monthly cost) and with more possibilities to combine with other software applications.
Hardware Components of a POS System
These are the general practical components needed to get your POS up and running.
Monitor/laptop: shows the inventory database and facilitates other features, such as employee clocks and reading sales reports. Tablets, notably iPads, are typical for replacing larger screens.
Barcode Scan: Optimizes the checkout operation. Monitoring barcodes extracts the product details and attaches it to the complete checkout.
Credit card reader: Safe and EMV-compliant credit card readers are all-important since the EMV payment standard came available in 2015. Non-compliant companies risk potentially significant losses due to fraud responsibility.
Receipt printer: E-mail and text receipts become more regular, but paper receipts remain essential to provide consumers with a convenient overview of their purchase or return.
Cash drawer: It might die out in the coming years, but cash is still king. Before then, you’re going to need a safe place to put cash for transactions. There are no additional fees for credit cards.
Key Features of a POS System: What to Look for When Buying
Most activities in a retail market can be exceedingly tiresome and resource exhausting. With the best POS program, retailers can simplify critical day-to-day business processes more effectively.
Modern POS platforms do more than provide flexibility when handling daily transactions. They boost the retailer’s chances of progress by providing them with methods for standardizing company processes.
POS technology customers described the main characteristics that retailers and restaurants are looking for when choosing a POS system:
Revenue reporting: On the top, most POS systems help to look at your sales. The difference is how the statistics are viewed, how easily the data can be obtained, and how much information you get.
Your POS operation should ideally help to do the following:
- Generate comprehensive revenue reports (centered on the item, hour, worker, total cost of products sold, total sales amount, net earnings, income percentage, gross profit.
- Include fast descriptions and graphs of your store’s revenue results.
Inventory control: Management is one of the essential features of the POS system. Also, table administration keeps a list of all items so that you know when to place an order on those particular goods.
Your POS method should allow you to:
- Check and monitor goods digitally.
Consumer Management: maintaining good relationships with your clients can contribute to repeat business. POS should have client relationship management (CRM) to monitor all customer details.
Your POS system should allow you to connect sales/operations to customers.
(More about: How POS systems work)
POS System Cost Factors
Point-of-sale systems usually range between $50-100 per month for small companies, while larger businesses and corporations are likely to pay $100-200 per month for additional features and software.
However, these really are the standard rates. There are plenty of POS distributors on the sector, some of whom provide free services, while others pay for each transaction.
Not all POS systems are the same. Even the best POS programs might not be suitable for your particular needs. Here’s a list to consider before you make your purchase.
Scope of your company: This has a considerable effect on the value of your POS. Each new database or location can cost extra cash under most POS tech plans.
Amount of characteristics: Maybe the least exciting cost factor is the vast number of features the POS program has to give. After all, a more robust, functional program would cost more.
Feature quality: While most POS programs have an analytical component that shows data, some are more sophisticated than others. More costly POS may provide more comprehensive statistics-crunching solutions that can help to optimize significant business processes.
Category of the industry: Restaurants and supermarkets are the primary industries with their types of POS systems, but other smaller industries have specialized POS systems that meet their unique needs, from pizza delivery monitoring to table designs.