Making a POS System

A point-of-sale (POS) system is essentially an electronic cash register that can be used anywhere transactions occur. Small and large businesses, restaurants, hotels and even casinos can all use and benefit from the various POS systems, which are sometimes called point-of-service systems.
 
When making a POS system, it's essential to find one that meets your company's needs. The vast multitude of options on the market can seem overwhelming at first, but, if you decide you're ready for the initial expense of setting up a POS system, you'll want to find one that can grow with your business.

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It's important to know where your business might be in a few years and what features you could need in the future. Planning for the foreseeable future could save you money on costly upgrades down the road.

POS Benefits

POS systems are beneficial for a number of reasons. In addition to recording customers' purchases and accepting credit and debit cards for payment, POS systems can help track inventory. Also, POS systems can collect customer data, which can be used to generate future sales.

A few more POS benefits include:

  • ability to track employee performance details
  • faster checkout
  • improved customer service
  • options for online credit card processing
  • reduced paperwork
  • reduction of pricing errors
  • streamlined management tasks.

Making a POS System: Two Options

When setting up a POS system, you have two options for new systems or system upgrades: a proprietary POS solution or a desktop PC with POS software.
  • Desktop PC with POS Software: A small business owner might feel more comfortable starting with the POS software on a desktop PC, since it's somewhat more familiar to most people. Here are some pros of a desktop PC POS:

    • interoperability with your existing back office systems
    • low maintenance
    • relatively low cost.

Despite these pros, desktop PC POS systems aren't built to withstand the heavy-duty retail environment. Typically, a PC will last only three years in a retail store.

  • Proprietary POS Solution: A proprietary POS system is a stand-alone system that functions independently of other office equipment. A proprietary POS solution is often more retail-orientated, which, depending on your business, could be extremely useful. In addition, a proprietary POS system can last up to five years. Also, a proprietary POS system might be more secure than a PC POS system.

Making a POS System: Putting Together the Pieces

Once you've decided to upgrade your business with a POS system, you'll need to gather the required hardware, software and processing components, including the following:
  • barcode printer
  • barcode scanner
  • cash drawer
  • keyboard
  • magnetic strip reader for credit card processing
  • monitor (possibly touch-screen)
  • POS software
  • receipt printer.

Many companies sell the above items as a bundled package, which can be extremely useful for a small business owner installing her first POS system. You can expect to pay approximately $2,000 to $3,000 for a complete POS hardware bundle.

Owners of larger businesses may want to buy individual pieces as they upgrade their systems.

Making You a POS System: A Few Tips

Making a POS system doesn't have to be a difficult process. If you have a computer, then you already have the first piece in place, as most computers will work with most POS software. After downloading the POS software and hooking up a printer and a cash drawer, you have a skeletal POS system in place.

However, to make the system truly work for your business, it's worth integrating your entire inventory as well as all of your accounting and pricing functions. That's when buying those barcode scanners or credit card processors comes in handy.

Here are a few tips to keep in mind when creating a POS system:

  • Before building your POS system, do your research and talk to other people in your industry.

  • Don't get talked into buying a lot of extra hardware or software that you won't use. At the same time, be open to possibilities and give yourself room to expand.

  • Find a system that meets your unique business needs.

Resources

AllBusiness.com, Inc. (2007). Do You Need a Point-of-Sale System for Your Small Business? Retrieved September 10, 2007, from the AllBusiness.com Web site: http://www.allbusiness.com/technology/technology-services/ 3313-1.html.

Hewlett-Packard Development Company (2007). Building a POS Solution. Retrieved September 10, 2007, from the HP How to Guides Web site: http://www.hp.com/sbso/productivity/howto/it-pos/index.html.