A point of sale system or POS does not refer to a single piece of equipment or process. Instead, its a collection of things that enable business owners to process transactions and streamline operations that are connected with sales.
POS systems vary depending on the technology and the provider. Before you choose to install one for your business, make sure that you understand how POS systems actually work. Here are some of the key components that you need to know about:
A modern POS system consists of physical hardware, and the software and system data. Here are some of the most important things to remember about the two:
- Software – Most POS systems have a front-end interface and a backend. The former is used by your staff members who process transactions using a touchscreen monitor or a tablet screen. The latter can be accessed through a browser or application, and refers to management functions and business analytics. No matter what kind of POS system you have, these two will always be synced and linked.
There are two ways that can data be stored on your POS software. On-site storage means that the software will be installed locally on your own server, which is a device or computer that you have inside your store.
Since everything is located on your local network, you don’t need an Internet connection to access the system. Cloud-based storage, on the other hand, means that your entire system is hosted online and you can access it through an app or a browser.
- Hardware – Hardware will vary depending on the kind of POS system you have. For example, Retail Express POS Systems feature terminals in the form of an iPad or tablet register that runs the software in order to process transactions. You can also connect the terminal to peripherals such as a barcode scanner, cash drawer, card machines, and receipt printer.
2. Data Entry
POS systems are designed to streamline tasks and make your life easier. One of the most time-consuming tasks for many retailers and restaurant owners is entering data about customers and their purchases. In many cases, the process requires a full-time staff or a considerable time investment on your part. You’ll need to enter each customer, both new and returning, to keep track of their names, contact information, and purchase history.
Most POS system these days, fortunately, allow you to pull up customers using their name or phone number once they have been saved into the system. Some POS systems also allow you to upload an Excel file with all your previous customer data so that you can have a database immediately, instead of needing to enter every single entry individually into the system.
3. Inventory Management
One of the most crucial components of a POS system is its inventory management feature. In order to ensure that your business runs smoothly, you have to know which items or products you have in stock and which ones you have to replenish soon. In fast-paced retail shops and restaurants, for instance, when you can’t keep track of your ingredients, you’d end up losing valuable time. Inefficiencies will always lead to financial losses.
The inventory management tool in many POS systems are incredibly in-depth, allowing users to store extensive information on more than a thousand items. They also allow real-time monitoring and low-stock alerts so that you know if you’re going to run out of a specific item anytime soon.
All standard POS systems today come with the ability to run reports. These reports can be automatically sent to your accountant or to separate accounting software. Here are some of the most common reports that you can generate using a POS system:
- Sales reports allow you to determine which items are selling like hotcakes, which ones are so unpopular that you might need to switch them up soon, and which times of the day are busiest for your business.
- Payment reports enable you to see whether your business is actually losing or making money. These reports allow you to monitor cash flow and card payment. They also help you identify any inefficiencies that are adversely affecting your business.
- Employee reports allow you to build the perfect team because it can help identify the strengths and weaknesses of your employees. These reports will aid you with employee scheduling and payroll, and help you monitor the sales figures for every single employee.
A POS system can help streamline your processes, reduce paperwork, and provide you with more time to manage your business instead of getting caught up in the details. POS systems vary depending on the industry, but the basic components—such as data entry, inventory management, and reporting—remain the same.