Written by: Sarah Ryther Francom
Original article: https://www.business.org/software/point-of-sale/pos-system-work
Today’s point-of-sale (POS) systems are much more than the iPad equivalent of a cash register. They are packed full of features that help small businesses run more efficiently. Whether you’re opening a café, retail shop, or gourmet food truck, there is a POS system that will fit the needs of your startup.
What is a POS system?
A point-of-sale system is a payment processing terminal that lets your customers pay for goods and services. It can also be used to record and track inventory, manage employees, and offer customer rewards programs. A POS system can help you streamline processes and collect data that provides valuable insight so you can make informed business decisions.
POS systems typically include a combination of hardware components and software applications. Sometimes the hardware is as small as a mobile card reader and the software is just an app on your smartphone. No matter the size, you stand to gain a lot from a POS system, so it’s important to understand which system and features will work best for you.
Hardware components of a POS system
The basic hardware components that come with most point-of-sale systems are a server, a computer terminal and keyboard at the checkout location, a cash drawer, a credit and debit card swiper, a pin pad, and a printer for customer receipts.
Depending on your business needs, other devices may include a barcode scanner for quick, automated data input; a customer-facing display; and a scale for weighing products. With the advancement in mobile and wireless technology, you may also want to invest in more efficient devices, such as touchscreen monitors, tablets, and smartphones.
The value of a POS system
A point-of-sale system can benefit your small business in a number of ways:
- Saves time by streamlining multiple operations using a central system
- Increases worker productivity and reduces administrative costs
- Provides detailed sales reporting and data analytics
- Reduces human error with automated systems
- Improves overall customer experience
What is an electronic point-of-sale (EPOS) system?
Similar to a traditional POS arrangement, an electronic point-of-sale (EPOS) system is used by small-business owners to accept payments from customers. An EPOS system is a combination of hardware and software that processes sales transactions and manages inventory in real time. Hardware includes a central computer terminal and peripheral devices, such as barcode scanners, receipt printers, and chip and pin devices, that connect to it wirelessly or via cables. And with the right POS system, you can customize the software to your industry and business needs.
EPOS systems stand out through their automatic inventory updates. If you don’t have time to manually update your inventory, drop the basic POS system for an EPOS system.
Here are some other ways EPOS software can save you time:
- Minimizes human error
- Automatically applies discounts and promotional pricing to ensure consistent product pricing
- Eliminates manual price checks
- Tracks employee performance and activities to determine top performers
- Simplifies time management by automatically recording employee schedules and work hours
- Automatically syncs business reports and data in real time
- Adjusts stock levels when items are sold
The downside of an EPOS system is the cost, and the software requires regular maintenance and updates. If you aren’t prepared to invest in a full-featured system right away, renting an EPOS system or taking on a flexible payment plan may be a better option.
What is a cloud-based POS system?
A cloud-based POS system is a web-based, software-as-a-service (SaaS) solution that stores your data in the cloud instead of on a computer. Unlike a traditional server-based POS system, you can access data, process payments, and get automatic updates via the internet.
But that’s not all. There are other helpful benefits of migrating to a cloud-based POS system:
- Your data is accessible anywhere, anytime via the internet.
- Inventory tracking and sales reporting in real time eliminate guesswork.
- Advanced analytics helps you make informed business decisions.
- The lack of software upgrades, maintenance, and licensing fees will save you money.
- Automatic upgrades and data backups help your business avoid costly downtime.
As mentioned above, cloud-based POS systems enable you to take your business anywhere. Plus, you can continue to take payments from your customers even if your internet connection is interrupted—your system will track sales and sync your data as soon as you’re back online. That makes a cloud-based platform ideal for small-business owners who travel to trade shows, art and craft fairs, and farmers and produce markets to sell products.
If you aren’t comfortable with migrating to the cloud, a traditional on-premises software solution may be a better choice for your new business. With this method, you can purchase software licenses and install the apps yourself on your computer system. On the flip side, you are also responsible for maintaining the software and installing upgrades.
Whatever software solution you choose for your start-up, make sure it’s customizable to fit your needs. You can start with basic POS features, such as recording sales transactions and inventory tracking, and as your business grows, you can add capabilities like employee management and custom analytics and reporting.
What are some POS system software features?
Customer relationship management (CRM) is a point-of-sale system feature that enables you to track patrons’ buying behavior, create customer profiles, and identify your most valuable customers. With this software, you can create loyalty and reward programs, personalize communication with your customers, and use other marketing tools to make a lasting impression on the folks buying your product or service.
Inventory management is an automated tool that enables small-business owners to gather data in real time, track best-selling items, and replenish stock quickly. Through barcode identification technology, you can receive, track, and sell items in real time. That means you can avoid the headache of recording sales and monitoring inventory levels on your own.
You want to bring your A game when you’re talking with customers, so quick and detailed information about your inventory is vital. Imagine if a customer asks about the availability of a specific item, and within seconds, you have an answer—without sifting through mounds of inventory in your back room. Improved customer service is just one of the benefits of a POS system with inventory management capabilities. Maximize your face-to-face time with your customers by knowing what products you have on hand. It doesn’t hurt to have quick access to quantity and pricing data either.
To keep your businesses running even more smoothly, POS systems with inventory management enable you to review and download detailed reports, receive low-stock alerts, and evaluate profit margins. With data reporting, you can make important decisions, such as how and when to adjust product pricing. You can also spend less time worrying about running out of popular items and more time creating quality experiences for your customers.
