What is a POS system?
A point of sale system is a type of computer software that is used to run the day to day operations of a business. It is used to track inventory, customers, sales, and generate reports for businesses. This software also allows for the use of a POS terminal in order to accept a variety of payments; cash, momo, cards, etc.
How does a point of sale system work?
A POS system allows retail stores or restaurants to accept payments from customers and keep track of sales. It sounds simple enough, but the setup can work in different ways, depending on whether you sell online, have a physical shop, or both.
A point-of-sale system used to refer to the cash register at a store. Today, modern POS systems are entirely digital, which means you can check out a customer wherever you are. All you need is a POS app and an internet-enabled device, such as a tablet or phone.
So what does a POS system do? Usually, it works like this:
- When a customer decides to buy an item from your shop, he or she may take the item to the cashier or shop attendant. The cashier may use a bar code scanner to look up the item’s price. For online stores, this step happens when a customer finishes adding items to their cart and clicks the checkout button.
- The POS system calculates the price of the item, including any discount or sales tax. Then the system updates the inventory count to show that the item is sold.
- At this point, the customer has to make payment. He or she may decide to pay via cash, momo, debit card or gift card.
- This is the moment when you officially make a sale. The payment goes through, a digital or printed receipt is created, and you ship or hand the customer the items he or she paid for.
What types of hardware and software are needed to run a POS system?
Every POS system uses POS software, but not all businesses need POS hardware.
If you have an online store, then all of your sales happen on your website, so you don’t need POS hardware to help you accept payments. But if you have a physical store like a retail shop, you may need a computer, a barcode scanner, a receipt printer and a credit card reader. If you operate a food truck, a phone or tablet could be all you need to process orders.
Here is a list of some common types of POS hardware and software. Keep in mind that what you need depends on your business.
- Touchscreen display and computer:
The central piece often referred to as a register. It allows you to calculate and process customer transactions and comes in three main forms:
- Computer-based display with a computer case that might sit beneath the counter or attached to the display.
- Mobile-based display hardware such as an iPad with a POS app installed and a case or stand to hold the iPad.
- Purpose-built hardware with an integrated computer and display.
- Barcode scanner:
A barcode scanner reads an item’s product details so you can ring it up. It can also be a quick way to check the price, stock level, and other details.
- Credit card reader:
A card reader lets your customers securely pay by debit or credit card while in store.
- Receipt printer:
A paper receipt shows customers exactly when and what they purchased and how much they paid.
- Cash drawer:
Even if you accept contactless payments, you may still need a safe spot to keep your cash. POS software that’s connected to a cash drawer can minimise fraud by tracking exactly when the drawer is opened.
What are some of the features of a POS system?
- Inventory management:
Inventory management lets you keep tabs on all your products. Some automated inventory software can connect with your sales data and let you know when an item is running low.
- Payment processing:
Payment processing is one of the core functions of a POS system. Each time a customer buys an item, your POS system processes the transaction.
- POS reports:
POS reports give you a quick look into how much you’re selling and earning. With clear reports, you can sell more and make better business decisions.
- Cashier/Employee management:
Cashier management lets you know when your cashiers are working and how they’re performing. Your team can also use it to clock in and out, and some types of software can grant permissions so cashiers can get access to certain tasks.
- Customer relationship management (CRM):
A CRM tool that’s tied to POS software lets you see what your customers bought and when they bought it. This knowledge helps you personalise your communications, marketing and customer service.
Receipts make processing refunds easier, since there’s a digital or paper trail connected to the purchased item. They can also make your business look more polished.
Now that you have a better understanding of what a POS system is and how it works, you can check out our modern POS software.