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If you ask any successful retailer or restaurant owner whether they are using a POS system, 10 out of 10 will tell you “absolutely”. POS system stands for “point of sale” and represents a central hub for simplifying, improving and accelerating all your business operations.
What is a POS system?
In simplest terms, a point of sale system is a combination of hardware and software tools that allow merchants to accept transactions and streamline essential, day-to-day business operations. The POS is where the customer pays for a product or service they wish to purchase. However, a good POS system is made up of more than just a few cash registers.
While you could also view a POS as a cash register, in comparison, point of sale systems come with more features, functionality, and benefits required by the modern standards. Moreover, POS software provides all the functionality of cash registers and the cash drawer itself is often referred to as the best POS cash register.
Recommended POS systems
These are some of the most recommended POS systems on the market:
How does a point of sale system work?
For most businesses out there, a POS system consists of two components: point of sale software and hardware. While some types of small organizations, mainly those that sell services, may be perfectly fine with only the software component, hardware does a lot of the heavy lifting. Many POS providers also offer solutions that allow you to purchase hardware as well.
Software components and deployment
The software component of a POS system is commonly available in two ways: on-premise and on the cloud. Both types have advantages and disadvantages and it’s crucial to figure those out for your case to make the most out of your POS.
On-premise POS
On-premise point of sale systems operate very quickly and do not rely on an internet connection. They are great for storing both personal and customer-related data and keeping it safe from the outside world. On the downside, you’re in charge of upgrading and maintaining the point of sale software, as well as the security of data, which will require a dedicated IT personnel. Also, you won’t be able to access information when outside of the office via the internet, due to no cloud storage. This type of a POS system is primarily suitable for large, brick and mortar organizations like retail shops.
Cloud-based POS
Cloud-based POS can generally be purchased from a SaaS (Software-as-a-Service) vendor. The tool is accessed by the internet, anytime, anywhere, via multiple devices. While different vendors offer different sets of features and benefits, close to all of them take care of system updates, IT security, and maintenance. The downside is that all your operations rely heavily on a steady, fast internet connection. Also, cloud-based POS will always be slower to process tasks and payments compared to on-premise POS. This can be important for businesses that highly value the speed aspect, like bars or nightclubs. It’s also important to consider partnerships between POS software vendors and payment processors/gateways that you need. If the point-of-sale software cannot process payments, all the added functionality quickly becomes redundant.
Benefits of software components
As mentioned above, when everything is settled with the payment processors, it’s time to understand the features that POS software brings to the table. Depending on your business (restaurant, bar, retail shop, hair salon, etc.) you’ll most definitely be looking for different benefits (more on those soon). However, there are a few “must-haves” that you should be aware of:
- Customer management: Gathering and storing customer-related data is essential for success. The POS software needs to allow you to log the purchases of clients, take important notes, and integrate with marketing tools for future campaigns and offers.
- Employee management: These features enable you to manage schedules, shifts, and payrolls, as well as the clock-in and out times for your team members. For a medium or large enterprise, easy employee management saves a lot of time and money.
- Inventory management: If you’re dealing with any type of physical goods, inventory management is critical for success. Keeping quantity under tight control allows you to never run out of stock for anything, be it clothes, meat, or vegetables. Some may argue that you could use a stand-alone tool for inventory management, but the truth is, that the fewer tools you have to switch between during work, the better.
- Sales reporting: Being able to construct detailed sales reports can help you make informed business decisions and understand how to proceed in different situations. Also, you can get a clear idea of employee performance and other KPIs.
Hardware Components
Regardless of your POS software choice, hardware components are always the same. Here are the most important hardware components that any organization needs to have:
- Cash drawer: In a POS system, the cash drawer is sometimes referred to as the best POS cash register. Although credit card payments are gaining a lot of popularity, paying with cash is still the most common way of exchange. Until we arrive in the cashless era, everybody needs a secure place to store cash safely and conveniently. Additionally, cash payments do not have credit card fees.
- Receipt printer: Similar to cash vs. credit card, digital receipts like email and text are slowly creeping up into the merchants’ space. Still, paperless sales are far away, so you’ll need a printer to provide receipts to customers. Also, the device can be used to print other materials like employee sales and hour totals.
- Credit card reader: Also known as a POS terminal, this device is used to process credit card payments. Moreover, with the introduction of EMV Chip Card Technology, merchants are now obliged to comply with the new standards or risk getting fined on account of fraud.
- Screens for cash registers: This is a monitor (or a smartphone/tablet) that displays your database. It’s used for showcasing products to clients, finding specific product-relating information quickly, viewing sales reports, employee clock-ins and outs, and many other things.
- Barcode scanner: When scanned, the point of sale software pulls out the product information and adds it to the checkout process. Many vendors also enable integrations with inventory management tools to automatically adjust stock levels.
All of these components work together to create a professional, convenient, and effective sales environment inside your store, contributing to higher gains in the long run.
How to choose the right POS system for your business
When browsing POS vendors, you’ll find that most of them have narrowed their offerings to specific business types. This is important because different businesses require different features. Here are the benefits that POS systems bring to different organizations:
Restaurant POS
The main reason for having restaurant POS systems is the ability to accept credit card payments. Also, some of the best POS systems for restaurants, like Lightspeed Restaurant, allow you to track your sales, inventory, finances, and taxes, and generate detailed reports. When used correctly, this information can be invaluable. To give you an idea, you could calculate the amount of inventory you spend each day, filtered by type and time. This allows you to have a better understanding of your customer base and work on improving your services each week. Other restaurant POS systems features include sending direct requests to the kitchen, minimizing errors improving food preparation efficiency, and calculating payroll.
Bar and nightclub POS
While you could implement one of the best POS systems for restaurants in your bar or nightclub, there are a couple of things you should consider. First of all, the speed of service is of utmost importance. Whether you’re handing out drinks, processing checkout or taking an order, speed plays a crucial role in keeping customers happy. For this reason, you may want to consider deploying an on-premise POS, which provides the quickest responses. Another difference is straightforward drink reordering. Since drinks make a hefty portion of your revenue, you want to make the reordering process seamless. The same goes for express checkout. If people need to stand in a line, chances are they won’t come a second time.
Retail POS system
A dedicated retail POS system offers specific features that you won’t find elsewhere. In addition to the standard set (inventory and employee management, reporting, credit card payment terminals, etc.) you get access to color and size management, employee commissions, gift registries, detailed client databases, purchase orders, layaway, etc. Also, the reporting aspect of a retail POS system is highly advanced, allowing you to generate a detailed report on anything including employees, customers, vendors, inventory, etc. Lightspeed is a great example of a POS for retail stores that offers great reporting options.
Conclusion
POS systems offer a lot of flexibility, functionality, and convenience to retailers and merchants. The benefits of reporting, inventory management, employee clock-ins and outs, time tracking, reducing the chance of errors, collecting customer data, being able to assist clients with helpful product specific information are hard to ignore. If you’re looking for a POS system that will fit your business needs like a glove, check out our guides and reviews of the best-performing tools on the market today.
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