Generally, small businesses burn out due to their cost-saving and old-school practices. But a powerful retail management solution, POS, helps businesses stay on top of the retail landscape. So, what is POS, and what is the purpose of a POS system for a business?
POS or Point of Sale indicates the process from where the sales take place. It is a blend of software and hardware that concentrates on business management. It is an indispensable solution for all small business owners who need a smooth operational structure.
Regardless of whatever business you have, you need a decent POS system. It helps you make wise, data-driven business decisions to raise your sales bar.
What Is A POS System And Why Do Retailers Need One?
A point of sale (POS) system is where customers pay for products or services at your store. You have a POS transaction every time a customer purchases something at your business.
A POS system for businesses is a hub for their transactions. All aspects, including sales, inventory, and customer management, blend seamlessly into your POS.
Generally, point-of-sale systems consist of both software and hardware. Your POS system could include several physical components, for example:
- Monitor
- Tablet
- Credit card reader
- Barcode scanner
- Receipt printer
- Cash drawer
Your POS system’s location can either be physical or digital. Brick-and-mortar stores commonly employ physical POS systems, while most online businesses predominantly utilize digital systems for monitoring sales.
If you run a physical store, you may require some (or all) of these elements for your everyday business activities. Place your point-of-sale systems strategically close to impulse items to enhance the likelihood of spontaneous purchases while customers are making payments.
You can still use a POS system if you run an eCommerce business. Some point-of-sale systems only accept online payments. An online-only POS system lets customers input their card information to pay for purchases. As an online merchant, you can opt for a cloud-based POS system to help lessen startup costs and fees.
What Is the Purpose of a POS System for a Business?
There are several features of POS systems that benefit businesses. POS systems facilitate payment processing, but they’re much more than that. Businesses can also use a POS system to build sales reports, manage inventory, maintain positive relations with customers, and manage employees.
Here are functionalities your business could get with a POS system.
Payment Processing
Payment processing is what most think of when they hear the term POS system. For most businesses, this is the No. 1 feature they need from a reliable POS.
There are multiple ways a POS system can facilitate a transaction. The most basic payment processing functionality is online debit and credit card processing. E-commerce companies can leverage point-of-sale systems to make money through online transactions.
Then there are brick-and-mortar businesses. These stores will need credit card readers who can accept multiple forms of credit card payment. The most basic is a magstripe card reader. These are the traditional credit card swipers we’re used to seeing in stores.
You can also get ahead using credit card chip readers and near-field communication (NFC) readers for mobile devices. Credit card chip readers will allow customers to insert their chip-containing cards. These readers enable enhanced security features for consumers.
NFC readers let customers use mobile apps like Apple Pay and Google Pay. Customers can pull out their smartphone, open their preferred payment app, and place it near your NFC reader to complete a transaction.
Your business must stay at the forefront of payment solutions. You must accept several payment methods to keep up with your customers’ spending habits.
Transaction Management
You’ll need a POS system to account for a few aspects of transactions. This includes having a navigable inventory database, issuing receipts, and customer tipping.
A crucial component of a POS is quickly ringing up customers and having them on their way. Your employees gain access to an easy-to-use interface to quickly complete a customer’s order during the checkout process.
For every transaction, you’ll also need to be able to print a receipt or, at the very least, be able to email a digital receipt to customers. Some customers may want a physical receipt, while others are happy with having a receipt just emailed to them or receiving no receipt at all.
Additionally, if you operate a service-based business, you’ll need to give customers the option of leaving a tip for your workers. Pre-calculated percentages or customized tipping options help customers reward their workers for a well-done job.
Customer Relationship Management
Customer management and tracking your customer data is a great way to build brand loyalty for your business. POS systems can record information that creates a better relationship with your customers.
You can also use your POS system to communicate with customers after a transaction. You can send promotional emails if your customers opt-in to receive email marketing communications. Some POS systems let you communicate with customers, while others enable you to connect to your pre-existing CRM system.
Employee Management
POS systems can also help your business manage your relationship with your employees. If you have several employees working for you, you’ll need to track their hours, sales commissions, and distribution of tips.
Employees will be clocking in and clocking out for every shift they work. Not only can your POS system let employees clock in and out independently, but you can also set work schedules through your POS software.
You’ll also need to track employee commissions for completed sales and employee tip distribution. Commissions and tips can be fairly distributed to all your employees based on unique identifiers in your system.
How to Choose a POS System
If you’re searching for the right POS system for your business, consider a few factors. Check your business requirements, consider your budget, and identify the necessary software and hardware.
Begin by assessing your business. A retail e-commerce venture, for instance, demands distinct solutions compared to a restaurant. In the case of an e-commerce enterprise, specific point-of-sale software features are essential for handling sales and overseeing inventory.
Next, compare the cost structure of various POS systems. All POS systems impose a percentage transaction fee. Seek solutions striking a balance between low transaction fees and excellent features for your business. Additionally, you might incur monthly subscription charges for utilizing POS software.
Discovering the Appropriate POS Solution
A dependable point-of-sale system is crucial for running a profitable business. To receive payments from customers, establish a POS system.
Point of Sale (POS) systems go beyond just handling payments. They significantly benefit your business, aiding in inventory management and employee logistics and fostering customer brand loyalty.
Contact us today to learn what a POS system can do for your business.
