For small business owners, the economics of running a successful operation requires an effective cash management system, efficient payment processing, precise inventory control, and accurate bookkeeping. Luckily, a point of sale solution can help you do all that — and more.
While some merchants may initially be drawn to the idea of using an electronic cash register (ECR) because of the low upfront cost, they’re going to pay for it in the long run. They’re going to work longer hours to accomplish tasks a point of sale (POS) system does automatically. They’re going to work harder trying to make sense of data a POS solution smartly puts together for them.
POS systems can save significant amounts of time and money and provide a better long-term solution that can help you grow your business. If you’re ready to put hours back into your week and work smarter, not harder, then this article is for you.
What is a POS System?
A point of sale system consists of POS software and hardware. Simply put, the software you choose will determine the functions your POS system can perform. For instance, if you’re a retailer, you’ll want your POS software to be able to create a product matrix so you can individually track different sizes, colors, and styles for a particular inventory item.
When choosing POS software, it’s essential to evaluate your business first and define the functionality you need in a point of sale solution.
Modern POS solutions are designed to be business management hubs. They provide analytical insight with comprehensive reporting. They help you control areas of your business like inventory and stock, employees and labor costs, and customers through loyalty programs and a customer relationship manager (CRM). What kind of cash register do you know that can do all that?
Beyond functionality, you also need to decide where the software will live. Meaning, do you want a cloud-based POS system or a traditional POS system? With cloud POS solutions, data is stored on a remote server you access via an internet connection. On the flip side with traditional (a.k.a legacy) POS systems, data is stored on a local server or PC on-premise, at your business.
Some POS companies use a hybrid approach by using a local server setup, then pushing the data to a remote (cloud) server. This type of configuration gives you the best of both worlds.
The next step is to choose point of sale equipment or hardware that is compatible with the software. The hardware provides you with a user interface and the tools you need to perform the functions of the software. However, keep in mind, your hardware selection will be limited to the specific hardware the POS company certifies.
For instance, let’s say you have an extra Epson receipt printer just sitting around your office collecting dust. So, rather than buying a new printer from the POS company, you’re going to try and save a few dollars using the one you already have. Except you can’t because the POS software only works with Star Micronics printers — not Epson.
The moral of that example is don’t assume you can put together random pieces of hardware and expect it to work with your new POS software. Without getting too technical, software is built from the ground up to communicate, in a very distinct way, with hardware that is configured in a particular way. Think about it this way: Will your iPad charger work with your Samsung phone? Precisely.
To alleviate this problem, point of sale providers offer a variety of POS hardware bundles that include a touchscreen monitor, barcode scanner, cash drawer, customer display, receipt printer, and other related peripherals. Depending on your business, you may also use scales, kiosks, and payment devices for contactless, EMV and mobile wallet payments.
Benefits of Using Point of Sale Solutions
Although a point of sale system may cost a little more, the benefits will pay off, bigtime. POS system advantages compared to cash registers include improved accuracy, better inventory tracking, and more detailed reports.
Since all transactions go directly through the POS system, retail point of sale solutions can automatically update inventory and sales information in real-time. No more guesswork or analyzing data weeks later when you finally get the chance. Know what’s happening in your store when it’s happening so you can make smarter, data-driven decisions.
You can also use the POS system to set up inventory notifications and triggers, so you never run out of your best selling items. Alternatively, on the other hand, leverage inventory reports to find your worst selling items. You know, the ones that sit around for months and tie up your cash flow. Better yet, know how much cash you have tied up in stock with an inventory valuation report.
Benefits of a POS System (Designed for Your Industry)
Since operations differ from one type of business to another, a point of sale system for a bar or nightclub will have different functionality compared to a salon. While the former may need features such as open tabs and liquor control systems, the latter will need online appointment setting features and schedule management for stylists.
The best POS system will support your specific business operations and logic. Don’t settle for less and struggle with one that was designed for a different type of industry because the price point might be better.
POS Systems for Retail
The retail landscape is rapidly changing. It’s a time of technology disruption and evolving, on-demand consumer expectations. Retail point of sale solutions should enable your employees to provide high-caliber customer experiences that build loyalty and differentiate your brand from the competition. Look for advanced inventory management, CRM and customer loyalty programs that can offer a personalized shopping experience. Gift cards, integrated ecommerce, and the ability to accept multiple types of payments including EMV chip cards and NFC transactions like Apple Pay.
Reporting and analytics are also important for retailers that need visibility into customer behaviors, a real-time view of inventory, and the ability to track sales trends.
POS Systems for Bars and Restaurants
To provide a dining experience that inspires customer loyalty, a POS system for bars and restaurants needs to deliver a streamlined process from the reservation or waiting list to order accuracy, perfectly timed service, and hassle-free payment.
From the front-of-house, wait staff can benefit from mobile POS for tableside ordering that can improve the precision and speed of service. Your POS system should also be able to accommodate customer requests to split or merge checks, accept multiple payment types including EMV chip cards, and facilitate tipping. For bars and restaurants that serve alcoholic beverages, age verification is an important feature.
In the back-of-house, kitchen printers and kitchen display systems (KDS) can provide added efficiencies. Once a server inputs an order, the items are sent to the appropriate prep station so the order can start to be assembled.
POS Systems for Salons
Salons need the ability to schedule services, but they also need to sell products like a retailer, and that makes their point of sale needs unique.
From a service perspective, you need to track stylists and booth rental fees. You also need a way for clients to book services — without picking up the phone. Online appointment setting is quickly becoming table stakes for salons trying to stay competitive in a digital world.
From a retail perspective, salon POS solutions should also be able to issue and accept gift cards along with all the different payment types we’ve discussed already.
Keys to Future-Proof POS Solutions
If you’re considering upgrading to a POS system, it’s important to look ahead a few years to anticipated business needs. Make sure the solution you select can support those goals and provide the functionality you need today. That doesn’t mean that you should invest in more features than you need now. It means you need to ensure the point of sale solution is designed so you can add new functionality and scale as your business and industry continues to evolve.