What is POS and Why is it Important for Every Business?

How many times have you checked your inventory only to discover it doesn’t match your tally? If you still use traditional cash registers, this is one of the seas of problems you encounter.

Mistakes are impossible to trace, and sales are difficult to track. With the fast evolving business scene, sticking to outdated systems gives your competitors a superior edge.

POS systems are the unsung heroes of the retail sector. They have made it easy to manage businesses seamlessly and efficiently. According to a survey on POS/Customer engagement conducted by BRB consulting, 71% of businesses will have a consolidated commerce platform by 2019.

The shift towards POS systems is due to their indispensable rewards of automating and streamlining operations.

POS System

What is POS?

Brick and mortar retailers are opting for leaner pay systems offering inexpensive, easy to use solutions. A point of sale (POS) is the central hub of any business. It is combined hardware and software systems allowing merchants to key in customer transactions and simplifies day-to-day business operations.

POS is the technology that keeps your business running. Neglecting this key aspect of your business well being can hence result in operational failure.

How does a POS system work?

POS systems combine business operations like sales, management, and inventory into a single cohesive entity. When you finalize a customer’s sale, the computer automatically deletes the sold items from the store’s inventory. The system captures the customer’s details and merges it with the specific sale made.

You are able to create an organized business report for evaluating stocks, find out whether marketing strategies are working and track performance across departments.

Hardware and software elements of a POS system

Hardware components

POS systems have severable different hardware elements to choose from for your business. Some of the important hardware components include:

  • Cash register
  • Credit card reader
  • Barcode scanner
  • Receipt printer
  • Register screen

Software components

There are two standard software positioning methods:

Cloud-based– cloud POS works using the wireless network. You are able to access your system via the internet. Unlike traditional systems, you don’t need a server to manage your business. They provide an added advantage in terms of simplicity, flexibility, cost, and function.

On-premise– this is the typical traditional software where you buy licenses upfront then install the software on your computer or server (s). You are in charge of updating and maintaining the system which needs IT skills and is also subject to human error.

Why POS is important for a merchant

1. Zero human error

How many times have you had to balance the register by the end of your shift because somebody counted the digits wrong or had to over order your stocks items due to inaccurate inventory?

Your staff members end up spending more time trying to fix their mistakes instead of engaging with the customers and closing sales, slowing business profit and growth.

Traditional cash registers rely too much on human input. And mistakes are bound to happen especially during busy times.  An efficient POS system can fix this by syncing your data, tallying totals, creating order forms and keeping track of your business operations.

2. Business Insights

The POS system syncs your data and gives you a comprehensive business report to increase your revenue and grow your business. All customer purchases are tracked, recorded and available for viewing.

Businesses can efficiently track their popular products and services, and tailor their marketing based on consumer purchase habits and demographics.

3. Distant control

Worried about your business falling apart when traveling out of town? You can control your business using the POS system through the cloud via your mobile device. The system will keep you updated on your business operations as well as manage other important tasks for you without needing your physical presence.

4. Building Integrity

Human error may cause one product to cost more in one store than in another. A quality POS system prevents this occurrence and ensures improved customer experience and consistent product pricing building your business reputation.

5. Tracking Promotions

Many microbusinesses rely on promotions to attract and retain customers. Most businesses struggle to keep track of duration, terms, and specifications of their promotions due to several promotions being run at the same time.

Failure to manage business promotions leads to a loss in sales or patrons because customer care falls off the wagon. POS system will efficiently keep track of your promotions and profits with ease.

With good POS software, you can determine the most profitable promotions and optimize customer care and create targeted advertising and marketing campaigns.

6. Managing inventory

Consistency in inventory is very important, and it can be quite a nightmare having to manage inventory without a POS system and especially for companies that have both an online and offline store.

A quality POS system allows for efficient and accurate inventory. You are also able to keep track and sort your inventory in several useful ways.

7. Boosting Productivity

No more slow checkout lines while waiting for the cashier to key in each product’s description. Using an effective POS system, a cashier can call up customers quickly. Plus they have better and faster access to the product information.

This enables them to serve their customers better and encourages more customers to visit your business and increase sales and profits.

Bottom Line

There are numerous POS brands in the market. It can be mind-numbing picking a suitable choice. How do you tell the good systems from the bad systems?

One crucial way is to read online POS software review from merchants and customers like you. This provides you with valuable insights and helps you make the best buying decision.

Recent brands are able to run seamlessly in your portable iPod or tablet with a variety of options to cater for your budget. They are easy to use and simple to navigate around.

Your POS could ultimately be the key that unlocks your business potential, so make sure you pick the right choice.

After working 5 years as a Software Analyst in reputed MNC, Rebecca decided to settle down and work from home. Having an expertise in business & being a life motivator, she loves to share similar stuff on our website by the means of her articles.