A point of sale system is one of the most important tools any merchant use in their outlet. From ringing up sales and taking payments to tracking your inventory and storing customer profiles, the right point of sale system can keep your business running like a well-oiled machine.
In this guide, you will learn everything you need to know about point-of-sale systems, as we've created the ultimate guide to understanding this critical aspect of merchant services.
What is a Point of Sale (POS) System?
A point of sale (POS) is a combination of software and hardware that a business owner needs to run transactions. Merchants use POS systems to analyze and order their inventory, employees, customers, and sales.
Traditionally, legacy POS systems are on-premises, meaning they use on-premises servers and can only run in certain areas of your store. With an on-premise POS system, your desktop computer, cash register, receipt printer, barcode scanner, and payment processor are all set up at your front desk and cannot be moved easily.
However, with the advent of cloud-based software, merchants can use their POS systems anywhere, using remote servers via the cloud. Cloud-based POS systems are maintained by their service providers. With a cloud-based POS system, you can access your information anywhere as long as you have an internet connection.
What are the Benefits of Using a POS System?
Some main benefits of a POS system include:
1. Improved inventory management
A point-of-sale system can drastically improve your inventory management by:
-Keeping track of products,
-Automatically updating stock with every sale;
-Replacing items as needed, reducing the possibility of under-or over-ordering.
A POS system with inventory integration will allow you to streamline product management and adapt to customer demands quickly.
2. Reduced administration time
Great point of sale systems provide you with relevant real-time reports, automated processes, and algorithm-based stock allocation. Thus, you don't have to fiddle with numbers or spend hours on complex, time-consuming tasks.
3. Higher accuracy
Once you change the price of a product, it will be updated automatically – this will ensure that the cost of all products matches the amount given to the customer to ensure that there are no discrepancies in the price of the products.
4. Increased convenience for employees
Advanced POS systems are reliable, so employees don't have to deal with freezes and slow loading times. Constantly rebooting a cash register wastes a lot of time and keeps customers waiting in seemingly endless queues. It also frustrates employees and increases the amount of effort they have to put into serving customers.
5. Better customer experience
POS systems simplify the checkout process. They also improve every step of the buyer's journey—from research to post-purchase. For example, easy access to product information means a faster checkout process. Reducing lines and waiting times leads to more sales and happier clients.
In addition, unlike the manual method, a POS system allows you to track your customer details. As a result, you can easily tell the best product for each customer. This can be very useful when you are creating product offers and promotions for your customers.
6. Enhanced data security
Technology and data management continue to advance, so do cyber attacks. However, modern POS systems ensure that their payment and order flow data is encrypted, protecting your customers from fraud, and protecting your business from liability or data breaches. You can also set user accounts with different permission levels to mitigate these risks.
What Features Should You Look for in a POS System?
It’s time to dive into the particulars of how a point of sale works. The needs of every company are different, so you should think about what you want and need from a POS system before you decide which one to get. Here are some of the features to look for:
Multi-outlet Inventory Management
This feature is essential if you are running more than one outlet. You want your POS system to have centralized stock control capabilities so that you can manage products from multiple stores from a single platform.
Ideally, your POS solution should allow you to transfer stock from one location to another, as well as generate reports for each store. However, managing multiple stores on separate systems is tough, so if you have a multi-outlet retail or restaurant business (or you're planning to expand), make sure you can do it all from one solution.
Multi-channel Inventory Management
If you sell online and in-store, your sales and stock movements need to be synced across all your channels. This feature lets you have a tighter grip on your inventory, so you know exactly what you have and where. For example, you can always ensure that the products your customers order online are available in-store.
Multi-channel inventory management also allows you to offer services such as buy online, pick up in-store, so your online shoppers can choose to stop by your store for their e-commerce orders.
This feature allows you to create a profile for each of your customers. In that profile, you can track the following information:
The customer database also allows retailers to set up timed promotions (when the promotion is only valid for a certain period after which the items on the promotion return to their original prices).
Loyalty Program Management
Advanced POS systems like ScaleOcean also offer a loyalty program management feature. Loyalty programs are a great way to make customers feel valued. What you need to do is to reward their repeat purchases with incentives, such as percentage discounts and other promotions not available to the general public.
Offering loyalty programs is all about customer retention, which is up to five times cheaper than attracting new customers. Paired with a customer database, loyalty programs allow retailers to take their customers' purchase history and market-relevant offers via email, social media, or other communication channels.
Refund and Return Management
Your POS system should offer a refund and return management feature to make these processes easier for customers. This feature also ensures that you stay compliant with your company’s policies without causing trouble in the back-end system. Once a product return is made, the system will automatically update the quantity of your inventory.
Your employees are vital to the success of your business. So you should pay attention to POS systems that allow you to manage and track their activities. This helps you reward your best staff and train those who need help most.
Your POS should allow you to set specific permissions for managers and employees. With this, you can control who has access to your POS back end versus those who can only access the front end.
You should also be able to schedule your employees' shifts, track their hours worked, and generate reports detailing their performance at work (such as seeing how many transactions they processed, their average item per transaction, and their average transaction value.)
Reporting is one of the biggest reasons to buy a point of sale system. With a POS, you should be able to view updated sales figures in real-time and run reports on your labor costs, product profitability, individual employee performance, and more. A great POS system also allows you to create custom reports based on the parameters you set.
These intuitive sales, inventory, and employee reports let you turn insights into action and help you run your business smarter. Armed with that information, you can reduce labor costs, increase the return on investment (ROI) of your inventory, predict periods of high-volume sales, identify your star employees, and more.
While this may sound easy, you should make sure that your POS solution integrates easily with the applications and platforms you are using. Check to see if you can integrate your POS solution with:
-HRM and Payroll;
-And more solutions your company needs.
Now that we have covered all aspects of a POS system, the only question that remains to be answered is which POS system is best for your business?
The POS you choose has a significant impact on how you run your business daily and how you grow your business year after year. We can help you find the right POS for your business. Feel free to talk to our expert to start a conversation!