Choosing the best point-of-sale system for your business can be tricky, especially knowing it’s a one-time thing that can result in massive changes to your operations. This essential tool is vital in running your business, including managing inventory, boosting sales, and creating a relationship with your audience.

Choosing the right point-of-sale system or POS for your business can be challenging. After all, it’s an investment that can overhaul your operations. A POS system helps you accomplish crucial tasks, including managing your inventory, increasing sales, and connecting with your customers.

The market has many POS brands for you to choose from. But before you go and buy your system, you need to pick between a traditional or cloud-based POS system. Here’s a closer look at these types of point-of-sale systems and their differences.

What’s a Traditional POS?

A traditional or legacy POS stores all vital business information on a computer with software. It is also called an on-premise system because you must physically use the device to access the data stored on its local servers.

Setup-wise, a traditional POS is a boxy, black terminal sitting on store counters. You may also find other hardware like keyboards, printers, and card swipe machines around this device.

What’s a Cloud-based POS?

A cloud or web-based POS stores business data online, specifically in cloud-based servers. You can access this data on any electronic device with Internet access, including:

  • Smartphones
  • Tablets
  • Laptops

Cloud-based POS vs. Traditional POS: What are Their Differences?

Now that we’ve defined what traditional and cloud-based POS systems are, let’s see what sets them apart from each other.

Access to Data

This factor is the most significant difference between these types of point-of-sale systems. If you’re using a legacy POS system, you’ll need to be in your store to access data, change menu items, see sales reports, or check employee attendance.

Meanwhile, a web-based POS system lets you access your data whenever and wherever because everything’s on the cloud. You can check for updates at home, on an overseas trip, or during a business meeting at a nearby cafe.

Features

Traditional and cloud-based POS systems also offer different features. You can’t customize a legacy system because your service provider designs it. Ultimately, you work for the system instead of having the system work for you. This can be a challenge if your business has specific needs.

On the other hand, cloud-based systems are customizable. For example, they let you track employee attendance and tell you whether you’re running low on specific items. Cloud-based POS systems can also help you analyze sales, product trends, and customer behavior. It even provides you with reports and produces graphs showing data such as:

  • Your daily, weekly, and monthly sales
  • Your fast-selling and slow-moving products
  • Ordering times

Risk of Losing Data

On-premise systems can also lose data if they crash. By using these systems, issues like bugs or hacking can add to your worries.

Meanwhile, a cloud-based POS stores everything on remote servers with minimal risk of losing data. Your business information is immediately and automatically backed up into the cloud. Even if the system crashes, you can quickly restore your data with just a few clicks of a button.

But with a cloud-based POS, you can rest easy knowing that everything is on remote servers and guarded against data breaches. This system backs up your data immediately and automatically, and restoring it only takes a few clicks (or taps).

System Updates

With traditional POS systems, you’ll have to update them on-site. You can expect some updates, perhaps at least once a year.

Meanwhile, cloud-based point-of-sale systems get more frequent updates than legacy systems. The service provider gives updates automatically and remotely. In short, you won’t have to bring the cloud-based system to the software company, and the provider won’t have to update it in your store.

Updates to a cloud-based POS fix bugs and may come with new features to help streamline your business operations. Install these updates immediately to get the most recent software and experience fewer issues while processing orders.

Internet Connection

On-premise systems don’t rely on the internet because local hardware stores their data. Your staff can use it without an Internet connection and do vital tasks smoothly.

We can’t say the same for web-based POS systems because they heavily depend on the internet. In case of a poor or lost internet connection, your service will be significantly affected. However, some plans offer offline capability where you can continue to use the POS as usual. The newly inputted data will be synced later on as you connect to the internet again.

Web-based POS systems work with Internet access. But you can’t use these systems if your store has poor or no Internet. Don’t fret, though: Some cloud-based systems will allow you to use them offline. They’ll sync the data you’ve entered once you’ve reconnected to the Internet.

Cost

A point-of-sale system’s price always plays a significant role in a business owner’s decision. In fact, some will spend a little more on this tool to enjoy convenient features.

If you go for a traditional POS system, you can expect a costly payment and maintenance fee. You may also need to pay your service provider for their labor and time, plus reinstallation if the system crashes.

Web-based POS systems provide a more straightforward solution. Many providers offer packages or subscriptions with a monthly or yearly fee. The payment also includes updates, software, and other features like a free website.

But as you choose your cloud-based system package, you’ll need to consider the following factors:

  • The size of your business
  • How many branches you have
  • The number of employees
  • How many devices you’re getting

Ultimately, a cloud-based POS with a subscription package may be ideal if you’re a small business owner. That’s because you don’t have to spend much on this system.

Hardware Design

Legacy POS systems are bulky and stationary, making them challenging to move around. Their screens can be as big as 15 inches, so you should give them enough space. But on the bright side, thieves won’t run off with a traditional POS as they’re heavy.

We can’t say the same with a web-based POS because any device with the necessary software can be your central system. Most devices are compact and lighter than a traditional POS, making them ideal for small businesses. Plus, cloud-based systems have simple designs that would quickly blend in with your store’s interior.

There’s a catch, though: Many of these devices won’t stay powered on for long. Thus, you may need to charge them.

Which POS is Best for Your Business?

Even with the differences between legacy and cloud-based POS systems, you may still be scratching your head. Entrepreneurs run their businesses differently, and you have many factors to consider. So before getting your POS, you should establish your identity and know your business needs.

That said, we’ve listed these questions to help you make an informed decision.

  • What kind of business do you have? Again, not all companies are the same. What may work for a food and beverage business (mostly restaurants and cafes) may not work for retail or merchandising stores like boutiques.
  • What is your budget? You should consider your budget as well. Will you be able to pay upfront for your POS, or should you stick to monthly payments?
  • How many employees do you have? Some point-of-sale systems allow you to track employee attendance. The more employees you have, the more helpful this feature can be.
  • Do you have other branches? Managing one physical store is already challenging, but imagine running two or more stores. As a business owner, you must stay on top of everything, such as your inventory and sales. Getting a POS to help you with these hurdles can quickly ease your workload.
  • Do you need a mobile solution? Mobile solutions will let you access your business data wherever you are. Are you on the go or more of an in-store business owner?
  • Will you use other systems with your POS? Some point-of-sale systems will only work with the required software. But you can also get a system that integrates with other systems. Consider how you’ll use your device and software to maximize functionality.

Get the Right POS System for Your Business

Traditional and cloud-based POS systems have their pros and cons. Thus, choosing the best system can be challenging. Before making your final decision, see whether your business needs a POS and whether it can work with this system. And finally, know what your business caters to and how using a POS can change your processes.

Do you want to learn more about point-of-sale systems? Visit the UTAK POS blog today for more helpful insights on these vital business tools.