What Is a Point of Sale (POS) System?!
In order for your store to run smoothly, there should be a range of skills to master, such as administrative, marketing, and management skills, that’s beside other things such as ensuring the inventory and formulating sales reports and more.
Having a Point of Sale (POS) system can make all the difference in ensuring that your operations run just fine. In this article, we are going to share important information on what to have in a POS and how to choose the best one for your business.
What’s the Point of a Point of Sale (POS) System?
A POS of a point of sales system is where your customer makes a payment for your products or services at your store, whereas they are performing a POS transaction.
The POS is considered the center of the business, where everything is connected; like sales, customer management, and inventory.
And although very beneficial, it has been observed that around 56% are still adopting more traditional methods such as manual methods, cash registers, with no sign of a POS system.
But why have retailers not adopted such a system yet? The answer is that when you are introducing a technology that is vital and central to your business, it could get scary or overwhelming. The solution? Introduce the negative consequences of not having a POS and missing out on its benefits.
It’s when you understand the software and hardware structure of a POS and learn about its benefits, you start to make an informed decision to introduce it to your world.
Software Components of a POS System
Every POS system has both software and hardware components that make running your business smoother and easier, so it’s useful to understand what are the software options out there and what are the corresponding offerings.
When choosing a POS system, it’s very important to take ease of integration into consideration.
Flexibility is very important, especially when making sure that your POS vendor is compatible with your payment gateway, as a means of keeping costs at bay. As for the applications that you already use, make sure that your POS of choice can seamlessly integrate with them to ensure uninterrupted operation.
Hardware Components of a POS System
What are some common physical parts of a POS system? They are as follows:
Monitor/tablet: Shows the product-related information with additional functionalities such as employees sign-in and to view business-related reports. Nowadays, tablets are getting to replace bigger monitors for smaller size and convenience.
Barcode scanner: Useful for multiple reasons; for example, it helps pull product information for faster checkout, besides it could integrate with inventory tracking systems to maintain stock levels.
Credit card reader: It’s imperative that readers are EMV-compliant, especially since the inception of the EMV payment standard in 2015 and that fact that non-compliant retail stores could potentially be susceptible to losses due to fraud risks.
Receipt printer: To provide a quick snapshot of their purchases, paper receipts are still needed and important for customers.
Cash drawer: While it could disappear in several years to come, cash is still the favorite choice. So, you will need a safe place to store cash transactions, besides, another benefit to not be overlooked is that are no associated fees like that with credit cards.
Key Features of a POS System: What to Look for When Buying
Many store operations can be straining and resource exhaustive, and that’s when POS systems come in handy, as they simplify day-to-day business operations and increase efficiency.
Furthermore, POS does not just provide much-needed flexibility with daily transactions, but they help streamline business processes with a plethora of useful tools.
These are the most wanted feature buyers look for when selecting a POS system:
Sales Reporting: The basic function here is to look at your sales, the difference between one system and another is the representation of numbers, ease of data accessing and the level of details you can dig deeper to reach.
Your POS system should:
- Give detailed sales reporting (Based on many elements such as product, hour, employee, net profit, gross margin, etc.)
- Report sales performance and providing quick snippets and chart representations
Inventory Management: This is one of the very important functions of a POS system is inventory management so you keep track of the products you have or don’t so you know when to order them.
Your POS system should:
- Scan and count product numbers
- Manage and maintain your stock with its variations
- Label each product with a serial number
- Track inventory levels and numbers
- Make seamless ordering possible (Such as automatic ordering of best-sellers)
- Consolidate purchases and orders in one place
Customer Management: Building relationships with your customers via CRM that makes customer data trackable.
Your POS system should give you the ability to:
- Match a transaction to a customer
- Track your customer purchase history
- Record customer’s information such as age, birthday, phone number, etc.
- Utilize email marketing to keep customers updated
- Some advanced POS contains loyalty programs
Employee Reporting and Management: Performance of your employees is very important to track, so you can set sales targets and identify your top achievers and those who are lagging behind and need coaching, the thing that will help you push your sales ahead.
Your POS system should give you the ability to:
- Introduce new employees to the system
- Create schedules for employees
- Email schedules to employees
- Track employees working hours
- Identify your top performers
Choosing the Best POS System: Questions to Ask
When choosing a POS for the first time, try thinking of what features you need the most, then talk to other business owners to see which systems they are using and what they like or dislike in them.
After that, you could possibly have formed an idea about the needed solution with the related features that your business needs.
Also, when choosing a POS system, bear in mind that you will need one that is easy to use, flexible in pricing and provide insights that are actionable, with the proper security, durability while providing unprecedented customer service.
Once you start talking to vendors, be sure to ask questions that demand definitive answers.
The next step then would be talking to vendors and investigated their offered solutions. Some questions could be:
Whether their POS system can integrate with your existing software platforms?
The thing that will save you time and money when they integrate with your website or accounting system.
What are the payment methods that the POS system can accept?
Having a POS that enable accepting chip-equipped credit or debit cards is important. Also, make sure your terminal is EMV-compliant.
How much does the software cost?
POS systems could either cost you as little as few hundreds of dollars to tens of thousands for a custom solution.
Do you have to sign a contract?
If yes it means that you will be needing to commit to the service until the contract is over, if it does not meet your expectations.
Will be there some hidden fees?
There could be possibly some hidden fees in the processing of payment such as during activation, early termination, downloads, transaction fees for different credit or debit cards, and so on.
Is any hardware proprietary?
A proprietary POS system can offer easier functionality, however, if you are looking for customization it will be restricted as it will only be compatible with equipment from the same company, which you should be aware of in advance.
It would be imperative that you research the most popular POS systems that are recommended by your fellow business owners to choose the best one. Complete a retail software questionnaire and read reviews of those who bought their POS systems, and you will be on your way to get what suits you best and get will transform the way you do business for maximum sales and best day-to-day business practices.