What is a Point-of-Sale (POS) System?
A point-of-sale (POS) system integrates both hardware and software components. It enables you to complete transactions and generate bills. Plus, it allows you to track recurring sales data, oversee inventory and employees, and analyse sales (KPI) performance.
What is a point-of-sale (POS) system?
A point-of-sale (POS) system helps you accept customer payments and track sales, including trends.
The POS setup varies based on whether you operate online, have an offline brick-and-mortar store, or both. It offers you advanced capabilities such as inventory management, sales performance tracking, and staff management. It also provides customer contact information collection feature, and various other functionalities.
Note: The POS software offered by us helps you manage inventory, track sales, and generate bills. The product doesn’t accept or process payments.
Why is the point of sale (POS) system important?
A point-of-sale (POS) system is a transaction processing device used by retail customers. The system comprises both hardware and software. It is build to help you with payment acceptance and in-person sales for your business. Additionally, it transfers funds to your bank account following each transaction.
It is a physical computing device often found in a physical store or a checkout point in an online store. The software with a POS devices is a complex system. It comprises of features that enable retailers, suppliers, and distributors (wholesalers) to track inventory and purchasing patterns. Plus, it ensures accurate pricing, and gathers valuable marketing data.
Usually, a point-of-sale system refers to the cash register in physical stores. Today, modern POS systems are fully digital, enabling you to process customer transactions from any location. All that's required is POS software and a computing device, such as a tablet or desktop.
What are the benefits of point-of-sale systems (POS)?
POS implementation helped organizations boost total sales by up to 200%. Here are the notable benefits of the point-of-sale system:
01. Easy Scalability
For both small and midsize businesses, investing in a comprehensive POS system can enhance the management of your evolving needs as your business grows. Many POS systems accommodate both hundreds and thousands of sales. It offers you the flexibility to use the same POS system year after year without hurdles.
02. Inventory management
Effective management of physical inventory and resources is vital. It ensures seamless day-to-day business operations. A POS system automates the updating of inventory systems each time a customer places an order online or makes a purchase from a shop. This real-time tracking facilitates anticipating stock depletion for popular items. And it helps with budget control activities by enabling timely purchases of inventory or materials as needed.
03. Payment system
Customers are opting for diverse payment methods. It's likely that without incorporating the latest payment options, your business might be missing potential opportunities. POS systems commonly come equipped with payment features. For example, UPI and QR-based payment systems, as well as other contactless payment alternatives.
04. Employee management
If you manage a retail outlet, it's likely that you have numerous hourly workers consistently clocking in and out. POS systems provide simplified time tracking and efficient scheduling. It also offers comprehensive reporting on employee activities. This functionality allows you to generate reports on employee schedules.
05. Customer management
The POS systems come equipped with fundamental customer management tools. These tools help you record customer information. It also allows you to create customer profiles for marketing purposes.
Research and reports
According to Intuit Market Research, retailers generating $300,000 in revenue have the potential to reduce costs by nearly 10 percent, amounting to $30,000 annually.
Inaccurate inventory poses a significant challenge for many retailers. It often leads to potentially painful losses if not addressed promptly.
Maintaining accurate inventory records proves to be an effective solution. By keeping thorough records of your stock levels and their locations, you mitigate the risks associated with misplaced or stolen inventory. With this data, you can make quick and informed action.
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How does a POS system work?
Fundamentally, a POS system performs essential functions by computing the total cost of selected items, handling the payment, and updating inventory levels to reflect the sale. The typical POS system workflow includes the following:
Step 1: A retail customer or procurement manager selects a product for purchase.
While shoppers explore a store's offerings, the staff can access pricing and inventory information. When the shopper is prepared to make a purchase, the staff uses a barcode scanner or unique product identification number to add selected products to their cart.
Step 2: The point-of-sale (POS) system calculates the total price.
After all items have been added to the shopper's cart, the POS system computes the total cost. It also incorporates any applicable sales tax and adjusts the inventory count to account for the items sold. At this stage, store staff also have the capability to apply discounts or promo codes.
Step 3: The retail customer makes the payment via online or offline medium.
To finalise the transaction, customers can utilise various payment options such as credit cards, debit cards, or tap cards. Customers can also use loyalty points, gift cards, cash, QR codes, or digital wallets. They have the option to perform a split payment. Split payment means combining the mentioned payment methods to cover their purchase.
Step 4: The point-of-sale transaction is completed, and the purchase receipt is shared.
Upon successful payment processing, the sale is officially completed. Subsequently, a receipt detailing the transaction is either printed or emailed to the customer. Next, the purchased products are handed over to the customer.
Point of sales (POS) system for suppliers, distributors (wholesalers), and retailers
An on-premise POS system necessitates installation on a local system and server. It is accessible only locally. Most organisations opt for on-premise systems due to their emphasis on security and control.
These systems operate without an internet connectivity. Plus, they ensure continuous functionality even during internet outages. Additionally, they incur one-time training and implementation costs, along with recurring maintenance charges.
A “must-have” point-of-sale (POS) system for your business
The retail ecosystem is evolving at an accelerated pace. It's crucial not to be behind with manual and outdated business systems. It's time to recognize the significance of POS systems and consider an upgrade to your existing sales operations.
Frequently Asked Question (FAQ)
01. What makes use of POS point of sale?
A point of sale (POS) refers to the location where a customer finalizes the payment for goods or services. It is the point at which sales taxes may become applicable.
02. How long does it take to set up a POS system?
The setup duration for a POS system varies based on the business size and system complexity. You can setup a basic system within a few hours. A more complex system may need several days, including staff training.