Most retailers maintain their sale records through a combination of manual methods, cash registers and Excel. By not investing in a POS system, retailers run the risk of scaling down their operations and missing crucial data that could help their business to grow otherwise. Hence, retailers no matter how small should invest in a good POS system as it helps in sales tracking, managing inventory and can easily integrate with electronic payment methods. But what is a POS system and what are the benefits it offers.
POS and POS System
The point of sale (POS) or point of purchase (POP) refers to the time and place where a retail transaction is completed. A POS system is used to describe the combination of POS software and POS terminal, the electronic hardware performing the sales transaction and processing credit card payments.
Elements of a POS System
A POS System is a computerized network that consists of hardware and software used to record the financial transactions of a retail store. The POS software is similar to the software that runs on laptops or mobiles with interface to input data about the products that a retailer sells. The POS hardware components will typically include a POS terminal, receipt printer, credit card reader, cash drawer, and a barcode scanner with support for legacy systems.
There are various POS systems available depending on different types of businesses. For example, restaurants, retail businesses, and grocery stores are different in terms of their functionality, and therefore, a POS system that meets their specific needs to be used. A restaurant POS system should be able to change menu items, communicate with the kitchen with item modifiers, print kitchen tickets, reconcile cash sales, have built-in tipping, and many more features.
Most POS systems also have helpful features like sales reporting, inventory management, price adjustments, and so on. A POS system enables retailers to route their funds to their bank accounts after each sale.
Key Features of a POS System
The right POS system will provide retailers tools to simplify and streamline crucial, time-consuming administrative operations with greater proficiency.
Some of the key features of a POS system are:
• Sales Reporting
A POS system generates reporting based on sales results. These reports can be based on daily, hourly and real-time reporting. POS system tools enable retailers to forecast based on sales trends.
• Inventory Management
A POS system keeps track of all products to maintain a properly managed inventory system. It is able to calculate inventory turnover, alert retailers when they need to reorder, and flag inventory that are not generating sales.
• Customer Management
By analyzing customer data and purchase history, a POS system can help personalize customer experience, enhance the same, and increase customer retention. This data allows the retailer to track customer loyalty incentives and use email marketing strategies to keep in touch with customers.
• Employee Management
A POS system keeps track of employee hours and sales performance. The ability to set sales targets and know who the star performers are can help a retailer reward employees for their hard work and also keep track of employees who require training to achieve sales targets.
With a wide variety of POS systems available in the market today, selecting the best one can be challenging for a retailer. To make it simple, here are a few important factors that can be considered when choosing a POS system:
• Cost (initial as well as ongoing)
• PCI compliance
• POS software features
• Adaptable to different payment modes
Investing in a POS system will definitely help small retailers lower the cost of doing business while increasing productivity. It will help them understand how profitable each product line is and identify when and how much stock to order. A good POS system is a must-have for all small retailers as it will help them run their store operations smoothly and also help in driving customer retention and loyalty.