What is a Point of Sale (POS) System and Why do you Need Them?
A point-of-sale (POS) system helps businesses to let their customers make purchases, record transactions & sales data, and view performance reports. POS is a computerized system that has a main network connected with checkout terminals supported by computer hardware. It just doesn’t stop with processing payments but also ensures smooth business operations by using the data gathered from each transaction. Additionally, it can help businesses with the customer, employee, and inventory data management.
A POS system generally consists of both hardware and software components. We’ll have a brief look at each component below.
Software Components of a POS System:
Every POS software has a frontend for users to perform transactions and a backend to track and manage business analytics and operations. The backend of the POS system can be accessed through a web browser or a mobile app window on a computer or a mobile device. Irrespective of its type, a POS software can be hosted either on-site or on the cloud. With the on-site system, businesses can store data on their server. On the other hand, if they choose a cloud system, they’ll have their data stored on the cloud which will help them to pull data from anywhere in this world.
Some of the important tasks which a POS software performs are as follows
- Adds the overall sales
- Displays the sales tax
- Helps with inventory management
Hardware Components of a POS System
Monitor and Register Screen:
A POS Monitor is where the merchants will be able to view the transaction details. Most of the POS systems generally have LCD Monitors. A register screen is essential for any POS system to function. POS systems can use various register screens from a Desktop or PC display to a Smartphone or a Tablet.
We all know every transaction happens online nowadays but still, some people prefer paying money in the form of cash. For merchants to store cash in a secure place, they’d need a cash register. The best part about the cash register is that there won’t be any credit card fee associated with. Also, It has to be noted that for businesses that don’t work with cash, this may not be a requirement.
A barcode scanner is generally used in retail stores to automate the checkout process. It will be connected to the inventory system to ensure that the product counts are updated without any errors. By scanning the barcode, the customers will be able to view the checkout total with the product information.
A receipt printer helps businesses to print paper receipts for the purchases made by the customer. Through emails and text messages grow in popularity among merchants, paper receipts still work in the retail stores. Customers can view the snapshot of the purchase detail on a paper receipt instantly.
Credit Card Machine
Nowadays, it’s a must for businesses to have a safe and EMV compliant credit card machine to read the credit card transactions. This machine helps to process the payments that happen via a credit or debit card.
Benefits of Having a POS System
Fast and Secure Transactions
The POS system facilitates quick transactions as compared to manual methods. By making use of the hardware components, customers can be quickly served. Transactions that happen in a POS system are transmitted safely and securely.
Better Inventory Control
With the POS system, you can track the sales of a product and also get updates on when to upgrade the stock. Also, notifications can be set to let the business owner know when inventory for an item is getting low, needs to be re-ordered, or even when a product is not being sold as anticipated which may result in markdowns.
Reporting and Analysis
The POS system can help businesses to generate reports and get insights into the current sales trends. With proper analysis, merchants can identify the area where the money has been spent unnecessarily and arrive at a solution.
Once the price of a specific product is changed, the system will be updated automatically and there won’t be a need to track every product individually thus improving the accuracy and saving costs.
Businesses can quickly check the sales made by every employee and reward the individuals that have strong sales figures. This ensures better employee management which will directly result in business growth.
A computerized system can help businesses to minimize human errors ensuring smooth business operations. With zero errors, businesses can nullify the incorrect processing of orders which will result in increased profits.
Advanced POS systems can help you engage with your customers, save time, and can greatly guide you in making smarter business decisions. It also has all the features to take your business to the next level.
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