Reasons to Use a POS System

More and more, small businesses are using point-of-sale (POS) systems instead of simple cash boxes or cash registers. POS systems keep track or capture data and customer information of credit cards processed, inventory and other bookkeeping information, using a variety of devices which include computers, cash registers, optical and bar code scanners, magnetic card readers, or any combination of these devices. These devices can also connect to other systems in a network, and manage inventory.

What is a Point-of-Sale System
The term "point-of-sale," or "point-of-service," refers to the place where a transaction occurs, such as at a restaurant, retail shop or hotel. A POS system is the specific hardware and software technology used at these locations. Essentially, a POS is an electronic cash register.

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Benefits of a POS System

Unlike a simple cash register, POS systems can greatly help a small business owner with all of his bookkeeping tasks. Most systems include:
  • credit card processing
  • customer relation management
  • fully integrated accounting
  • inventory control management
  • rental and payroll modules
  • service management.

Having all of these tasks linked together in one convenient system is one of the many reasons small business owners often choose to use a POS system.

What are some other reasons to use a POS system?

  • Automating functions allow business owners to run things even when absent.

  • Inventory is easier to control, since sales are recorded immediately. This is especially useful when the bookkeeping and actual stock don't match.

  • Price reductions are tracked and discounts are recorded accurately.

  • Short-term promotions are managed and recorded.

  • Time can be freed up for personnel who no longer have to keep track of counting, ordering and checking cash-register accuracy.

While it may take some time to teach employees to use a POS system, the benefits generally outweigh this inconvenience. Many companies that offer POS systems provide simple training videos that make learning POS systems easier for management and employees.

Early POS Systems
POS systems started as cash registers that operated by a crank or lever and that recorded data onto paper tape. With these systems, someone then had to transcribe this data into an accounting system.
 
From there came cash registers that used electricity. Then, in 1973, IBM released the first computer-based system. The year 1973 also saw the first UPC/EAN barcode readers. In 1986, IBM introduced the first PC-based POS systems.

Web-Based POS vs. POS Software

If people opt to not use a proprietary, stand-alone POS system, they can choose either POS software of a Web-based POS system, both of which offer numerous benefits. Some people prefer Web-based POS systems, since the POS provider automatically backs up important information. This allows business owners to access information from anywhere in the world.

With Web-based POS, business owners also don't have to purchase POS software and the systems are easy to upgrade. Also, owners can usually address technical problems instantly over the Internet.

However, some possible disadvantages of Web-based POS systems include:

  • monthly fees and start-up fees
  • needing to have the Internet connected at all times for the system to work
  • purchasing expensive hardware.

Using a software-based POS system eliminates the need for the Internet and has no monthly fees. It can also give you a greater range of hardware choices, and the software is generally easy to set up and use.

But the disadvantages of software based POS systems include:

  • having to call the manufacturer to receive any technical support
  • having to purchase upgrades or entirely new software as technology advances
  • inability to access any of the information remotely.

POS Systems for Small Business

With the inventory control software, ease of credit card processing, optional integrated e-commerce solutions and industry-specific software, a POS system can help you to more effectively manage and run your small business. Many companies even offer free training for small to medium-size businesses to help get them started. You just need to find the system that works best for you.

Resources

Fowers, Christopher (n.d.) Software or Web-Based POS System – What's Right for Your Business? Retrieved September 10, 2007, from the Top Ten Reviews Web site: http://pos-systems-review.toptenreviews.com/ software-or-web-based-pos-system.html.

Wuorio, Jeff (2007) 7 Reasons to Switch to a Point-of-Sale System. Retrieved September 10, 2007, from the Microsoft Small Business Center Web site: http://www.microsoft.com/smallbusiness/resources/technology
/business_software/7_reasons_to_switch_to_a_point_of_sale_
system.mspx.