Everything You Need to Know About Free POS Software
Is there such a thing as free POS software? The short answer is yes, free point of sale software does exist. However, the right answer isn’t as cut and dry.
As a small business owner, ‘free’ can be an attractive offer that your bottom line finds hard to refuse. After all, who doesn’t love free stuff? Especially when it’s something that can typically cost hundreds to thousands of dollars to buy, free sounds like the deal of a lifetime.
However, before you sign up for the first free POS system you find in a Google search, finish reading this article. Let’s look at the ins and outs of free POS software so you can decide if it’s a smart business decision.
What is POS Software?
First, let’s define POS software, so we’re all on the same page. Point of sale software is what brick-and-mortar businesses use at the point of purchase to help streamline efforts between back-of-house business operations and front-of-house customer-facing activities. The software, combined with POS hardware, form a comprehensive point of sale system.
Two Types of Free POS Software
When it comes to free point of sale software, expect to find two options:
- Open-source software
- Cloud-based software
Both are effective and can be a viable solution for your business. However, it’s essential to understand how each work and which one will better support your business needs and complement your technical abilities. Let’s take a look at both options, shall we?
Open Source POS Software
Since open-source software is distributed with its source code available for modification, you can customize the software any way you choose. However, unless you’re a tech-savvy business owner with programming skills, this probably isn’t the best way to go.
With open-source software, almost everything is a DIY approach. From POS setup and installation to troubleshooting and ongoing technical support, you’ll spend a lot of time sifting through online documentation and community boards to find answers to your questions.
It also means that data from the POS system is stored, on-premise at your business location. Therefore, you can only access the information if you’re on-site, and the responsibility for securing sensitive customer data falls squarely on your shoulders.
Cloud-Based POS Software
On the other end of the spectrum, there’s cloud-based point of sale software. This type of software securely stores POS data on remote servers and makes all of the information accessible online via a web browser and dedicated portal.
Although you can’t modify the source code and have to use the software ‘as is’ out of the box, cloud-based POS software is much more user-friendly and manageable than the former.
POS Features: Free POS Software vs. Paying for POS Software
Besides network infrastructure, what sets one POS system apart from another are the features and functionality of the software. This is what also sets it apart on price, and not all software is created equal. With free POS software, you can expect to find limited capabilities compared to a premium version that will tap into your monthly budget.
Software companies market stripped-down versions of their software with limited features at a lower price point than their premium version with all the bells and whistles. Therefore, when looking for free POS software, you need to understand exactly what those limitations are and how they will affect your operations.
Chances are, free will only go so far. While some smaller businesses might be able to skate by with the minimum features, others might find limitations stifle workflow, and end up having to purchase additional features.
Let’s take a look at some of the features you can expect to find from your point of sale software provider and where the limitations may lie in the free plan.
It should come as no surprise that inventory tracking and management features are necessary for retail businesses to stay afloat. If you can’t track how much you’re spending on inventory and what items customers buy the most, it will be hard to remain profitable.
With free point of sale software, expect the number of SKUs to be limited compared to the paid version. For instance, a free plan may only allow for 100 products or items, while the version with the monthly fee gives you an unlimited amount.
Besides managing inventory, you’ll also want a point of sale system that will help manage your staff. Each employee should have their own login credentials and user permissions according to their role in the business. If the point of sale solution can track labor hours, organize employee schedules, and provide sales analytics for each shift, that’s the icing on the cake.
POS companies typically allow for one or two users with the free software deal, but it usually stops at that. If you have more than one or two employees (or even managers), you could see how it can be problematic. Having a system with multi-user capabilities allows managers to keep track of which users are making sales and to set goals for employees who might not have as many sales.
Speaking of analytics, make sure the POS system you choose has reporting features that will provide valuable insight into your business. Some reports you should expect to find are:
- Sales reports
These reports give business owners numerous sales metrics that provide insight into the profitable areas of your business and other areas that might need more attention.
- Labor reports
Labor reports help you get a better understanding of how your employees are performing (or not performing) and how many hours they’re working.
- Customer reports
Customer reports shed light on customer purchasing habits and preferences. This information allows business owners to fine-tune their loyalty programs and marketing tactics to reach their target audience better.
- Inventory management reports
Inventory reports are arguably one of the most important for any business. With inventory management reports, you can track products in stock and how much cash you have wrapped up in inventory.
- Accounting reports
Tax season is stressful for everyone, especially business owners. Having a POS system that provides accounting reports makes it easier to compile the details and send the data off to your accountant.
With a ‘freemium’ version, make sure you understand exactly what reports it includes that will make your day-to-day managerial tasks easier.
Returns and Refunds
Unfortunately, not every transaction will be a sale. For retail POS systems, it’s vital that you can process returns and refunds with ease. From finding the initial purchase and refunding the original payment method to adding the item back into inventory, your retail POS system should be able to handle all of these details.
Discounts and Promotions
Customers go crazy for a good promotion or discount. It’s a timeless marketing tactic to get more customers through the doors, and it works. With your point of sale system, you should be able to apply discounts at the individual product level and for the entire order.
Free POS software may only allow for one or the other, or in some cases neither. Understand how discounting works because you’ll need to use it sooner or later.
Much like promotions, customers also love loyalty programs. Take a look at the many successful big-box retailers. The vast majority have some loyalty program in place to reward customers for their purchases.
Although many POS systems offer some type of customer loyalty program, more often than not, it’s part of a premium software subscription.
Setup, Configuration, and Multi-Location
Whether it’s menu customization for a restaurant POS system or configuring the retail matrix for your boutique, having a simple setup and configuration is key to optimizing workflow and checkout speed at the point of purchase. This is especially important if you need more than one cash register or have multiple locations.
If you have a larger-scale business with numerous locations, free POS software packages generally can’t offer you multiple locations or registers. Multi-location support is also a problem for smaller businesses for the sheer fact of needing more than one register. Your choice depends on where you visualize your business going in the future.
POS Hardware Will Still Cost You
Whether you decide to go free software or not, POS hardware and peripheral devices will still come with a price tag. These are the input and output devices that help carry out the functions of the POS software. This equipment can include, but not limited to:
- Tablets such as iPads, Android, or Windows devices
- Touchscreen monitors or all-in-one computer
- Cash drawers
- Barcode scanners
- Customer-facing displays
- Receipt printers
- Credit card readers
The Bottom Line
Although free POS software looks like a great bargain that would pique anyone’s interest, it’s important to understand exactly what you’re getting for the price — or lack thereof. While free point of sale software may work for your business today, in six months you may need more features. Therefore, make sure you choose a POS system that can grow with your business.