Most of us interact with a point of sale even if we don’t realize it. These handy devices help make your daily transactions easier, whether you’re a business owner or a customer.
But what exactly is a POS and how does it work?
This guide will help you understand the basic terms related to a POS. We’ll discuss its purpose, features, benefits, and why you should consider getting one for your business.
What is a POS?
POS stands for point of sale––it’s the retail location where a product or service transaction is done to complete a customer’s shopping experience. When a customer walks up to your checkout counter or selects an item from your booth, these are the points when you can make a sale.
Point of sale doesn’t have to be a physical interaction; it can be the moment they click the checkout button on your website or app.
Point of Sale vs. POS System
The point of sale and POS systems sound similar but are slightly different.
A point of sale is a transaction between your business and a customer. For example, when customers line up in a grocery store, proceed to the cashier, and have their items bagged. At a typical restaurant, it’s when they pay the cashier or hand money to a waitress.
A POS system leads you towards a successful point of sale. It can refer to the software or hardware used to accomplish a transaction. This system helps streamline the checkout process and provides sales and customer behavior data, among many other benefits.
POS systems typically have hardware components, such as touchscreen computers or tablets, electronic point-of-sale terminals, barcode scanners, credit card readers, cash drawers, and receipt printers. Meanwhile, the software helps ease business operations through inventory management, data analysis, and many more.
How does a point of sale system work?
Understanding what a point of sale system is and how it works allows you to simplify your business operations. In this modern age, you must learn to adapt to changes to keep up with the competition, and one way to do so is by switching from a traditional cash register to a reliable and robust POS system.
There are four steps to a primary point of sale transaction.
- The customer decides what product or service to avail. For an online setup, this happens when a customer adds items to their cart.
- Your POS system determines the price of the purchase. It will also calculate the sales tax and update your inventory once that item is sold.
- The customer pays you. Various payment methods are available, and you can also accept loyalty points and gift cards.
- You have completed a point of sale transaction. A digital or printed receipt is created after every successful purchase.
POS system setup
Depending on your business type, you need to consider the point of sale software and hardware you’ll need. Having one in your business environment aims to speed up transactions and provide solutions for possible problems.
Programming
After setting up, you must program its software to accept the product or service you are offering. This process can be time-consuming, especially if you have plenty of data to input. But after this task, checking out your customer’s order is a breeze.
Payment
There are many ways to accept payment from your customers. The most straightforward is through cash. One of the perks of point-of-sale software is it automatically computes your customer’s change.
You can also process payment through credit or debit cards, but you must sign up with a merchant services provider. For contactless payment and customer convenience, you may also consider integrating e-wallet payments, such as GCash and Maya.
Installation
Many providers offer support or setup services. It’s crucial that all point of sale hardware is working correctly and the software doesn’t encounter any problems to avoid technical complications while processing a transaction.
Training
You and your staff should know how to operate your point of sale’s software and hardware. You can look for remote training or online demonstrations to understand how everything works. Many modern systems are user-friendly and straightforward; you can finish a transaction with a few clicks or taps on the screen.
What is a cloud-based POS system?
You’ve probably already seen a traditional POS system—a desktop computer, cash register, printer, and barcode scanner. This hardware is usually set up at a desk and can’t be moved easily.
Over time, technology has advanced further to develop the cloud. This development has enabled POS systems to be hosted by a software provider instead of relying on an on-site server. It can help you advance mobility and access your systems using any device. You can log on to your business portal and see vital sales information using a laptop, desktop, tablet, or smartphone.
Why switch to a POS system?
A dependable cash register often does the trick, and you can simply track your inventory and finances with a pen and paper. But you’re leaving room for human error that may have costly consequences.
Your staff can misread a price sticker wrong and under or overcharge a customer. They can give the wrong change, especially if they use a calculator or manually compute it. You may also experience a difficult time tracking your employee’s attendance. You won’t have these problems with a simple upgrade.
POS System Features
Inventory Tracker
Keep tabs on all your products and know which stocks are running low and which items are slow-moving with a POS system’s inventory tracker. You don’t need to physically check your inventory because the system will automatically update everything on your screen.
Price Consistency
This feature is helpful for businesses across multiple locations. Your point of sale system can create a digital product database to ensure price consistency regardless of where your customers are.
Sales Reports
A point-of-sale system will give you an overview of your business’ status. It will also create reports, including how much you earn and sell, customer behavior, and what products or services sell the most. This information guides you towards better business decisions.
Employee Management
The most efficient way to track your staff’s attendance is with a POS system because they can quickly time in and time out. It also lets you know what a team member is doing so you can stay on top of business operations. You can also use this feature to implement a reward system and keep your employees motivated.
Remote Access
You can access your business information conveniently on any POS device connected to the internet. It’s also possible to enjoy real-time updates on your operations, such as attendance, stocks, and sales.
Loyalty Program
Some systems offer a loyalty program for their customers. They reward repeat purchases with various incentives like discounts, upgrades, and freebies that aren’t available to the general public. This program lets your target market know you value their loyalty and appreciate their patronage. Conducting a loyalty program also helps increase sales and improve customer retention.
Benefits of a POS System
Saves time
A point-of-sale system helps you save time in various ways. For example, your staff won’t spend a long time computing the customer’s expenses and change since the total amount reflects on the screen with just a few clicks. Moreover, you don’t have to manually count items in your pantry as the system provides real-time updates with an auto-deduct feature.
Cost-effective
Most POS systems only charge a monthly subscription fee, so you don’t have to spend thousands on a software and hardware license.
Software updates
You may need a software update as companies continue to improve their services to you. These come at no additional charge, and you can expect bug fixes or new features to streamline your business operations.
Customer support
Many companies provide 24/7 customer support to teach you how to troubleshoot
POS system concerns. Get the most out of their product by getting actionable steps to solve your problem. They are usually free to call via a hotline or message their social media accounts.
Security
You and your customers can rest easy knowing your private information is protected. These systems ensure that payment data and order streams are encrypted and secured from data breaches.
Point of Sale Hardware
Here is some hardware commonly included in a POS system.
POS terminal machine
The terminal machine is the heart and body as it runs the point of sale software. You can often find these on a tablet or a touchscreen device, enabling maximum functionality and inherent flexibility. For example, sales clerks can go on the floor and assist customers. Meanwhile, a waiter doesn’t have to leave the dining room because they can send orders directly to the kitchen.
Printer
While it’s convenient to have a digital receipt, many customers still prefer to have it printed. These printers also include stickers that particular food and beverage establishments can use, such as cafes and milk tea businesses. They help print the customized orders of customers and enhance their experience with you.
Cash drawer
Many customers still prefer to pay in cash. These drawers often come with various compartments where you can place different monetary denominations, and there are also designated slots where you can put coins.
Barcode scanner
While some systems let you quickly click orders on your POS device, some have a barcode scanner to speed up the checkout process.
Streamline Your Business Operations with a POS
Getting a point of sale system is an easy and cost-efficient way to simplify your business. It offers various features that tackle different facets of your operations, including inventory, attendance, and sales.
Browse the UTAK POS blog to learn more about what a POS is and why you should get one for your business.