What is a point-of-sale system?
A point-of-sale (POS) system is used to record the products or services a customer intends to purchase, add up the items’ cost, calculate tax, accept payment and generate a receipt. It differs from a cash register in that it has advanced features that make it easier for you to manage sales data, inventory, customers and employees. POS systems have three parts: software, hardware and a credit card processor.
What is point-of-sale software?
Most POS systems are designed for either retail or hospitality businesses, though some vendors offer solutions for both. Additionally, most vendors offer multiple POS plans, with service levels based either on the number of registers you need and how many people will be using the system or on the features that are included.
What is point-of-sale hardware? How many register terminals does each location require?
A typical POS terminal has either a tablet, touchscreen or computer monitor, as well as a cash drawer, credit card reader and receipt printer. A retail POS system may also include a barcode scanner and customer-facing screen. Other peripherals such as scales, kitchen printers and kitchen display systems (KDS) are often available.
The number of registers, or POS terminals, that each location requires depends on the specific needs of your business. A single POS terminal may be enough for small and new businesses, but you may want to add more if your business is busy and you need to reduce wait times.
What credit card processors work with POS systems? If I buy a POS system, does that make me PCI compliant?
The best POS systems integrate with multiple credit card processing services so you can shop around for the best value. However, some vendors offer their own credit card processing service and bundle it with their POS software and hardware.
There are multiple factors in achieving PCI compliance, including the POS system and credit card processing service you use, whether your business stores cardholder data, and whether your network and internet connection are secure. Your credit card processor can help you with PCI compliance; you will likely need to complete an annual PCI self-assessment questionnaire and may also need to submit to system scans.
When does your business need a point-of-sale system?
As soon as you begin selling goods or services in person, your business needs a POS system, no matter how small your operation is. A POS system makes the checkout experience easier and faster for both your cashier and your customer, reducing the time it takes to ring up a sale and decreasing human errors such as miscalculations.
It helps with inventory management, tracking the items you have in stock, and some can even assist with purchase ordering. POS systems with advanced inventory management tools can track sales from both your e-commerce platform and your physical retail store in real time, or across multiple locations.
Real-time reporting gives insight into your ROI, showing which items are your best and worst sellers, so you can reorder popular items and offer promotions on those that are under-performing. It can also help you identify your busy and slow hours, days, and seasons so you can optimize how you staff your business.
A POS system also plays an important role in reducing theft, as it records every transaction, and you can choose whether or not a manager must approve returns and voids. Shift reports and blind cash reconciliation discourage employees from stealing from the cash drawer. Mobile POS systems allow employees to mingle with your customers on the store floor, deterring shoplifting.