Point of Sale (POS) Systems

A point of sale (POS), also known as a point of purchase, is a general term that describes the location and time of a given transaction. By extension, POS systems refer to any device, software and/or methods through which merchants record these transactions.
 
For example, say you are buying groceries from your local supermarket. The point of sale for this transaction is the supermarket itself, as well as the day and time at which you are picking up your groceries. Depending on how you pay for your goods, the POS system may be the cash register or the credit card machine.

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With the advancement of technology, we not only have the ability to pay for goods and services in a variety of ways, but we can also get what we need or want from many different sources. While we can go to the location of a store to purchase something, for instance, we can also order goods online, meaning that we never even have to interact with a seller in person.

As a result, modern merchants (including retail stores, restaurants, hotels and any service-providing shop) all use various types of POS systems.

In this section, we will describe the various types of POS systems available to merchants. Our articles will include information on the pros and cons of each, as well as how to set up a POS system for your small business.

Reasons to Use a POS System

Setting up a comprehensive, modern point of sale system is an essential part of creating a successful business. Along with being able to process and record transactions, an effective point of sale system can:
  • analyze consumer data to predict business trends
  • forecast “open to buy” options (or a business’ available credit to buy inventory and other necessities)
  • maintain customer relations
  • manage your inventory
  • oversee payroll costs
  • perform accounting tasks.
POS systems are efficient at handling not only the interactions between customers and merchants but also the internal operations of businesses. In addition, there are a number of other reasons to use POS systems.

Making a POS System

The type of equipment you get as you start to set up your POS system depends on the volume of transactions you expect, the cost range of your goods and/or services and the scope of the market to which you are selling. For example, while a local nail salon will likely operate just fine with a cash register and a credit card machine to process its transactions, an international antiques dealer is going to require a Web-based system and other POS software to transact his business dealings.
 
As you are setting up a POS system for your small business, make sure that you think about who your client base is and the ways in which you can make transactions easier for them. After all, the more trouble customers have when making purchases, the less likely that they will be loyal to your company or brand. Clearly, planning is essential when putting together your POS system.