What Is a POS System?

In order to run a successful business, you must be able to process transactions with customers. This is where a point of sale (POS) system comes into play. A POS system is a device that allows for the processing of transactions. Even a simple cash register is technically a POS system, although nowadays a POS system is usually a mix of hardware, software, and services that gives merchants the capability to make in-person and online sales.

How Does a POS System Work?

A POS system works by mixing hardware, software, and services together to create a system that allows for fast and accurate transactions to take place.

The hardware is what you will physically see in your store or place of business (assuming your business is not completely online, as is the case with an e-commerce business). At the most basic level hardware will include a card reader, which allows you to scan credit/debit cards and accept them as payment. You may also want a full countertop terminal, which is the modern cash register. These usually include a screen for the cashier, a screen for the customer, and a cash drawer. Some terminals may be self-service, allowing for customers to complete the transaction without the need for a cashier. The final piece of POS hardware is additional accessories, such as receipt printers, barcode scanners, scales, kitchen printers and label printers.

POS software comes in two forms, on-premises and cloud-based. On-premises software is downloaded onto your POS terminal, and allows for payment processing, logs sales and labor information, and ideally syncs with whatever accounting software you use. On-premises software should only be used for a very small business with only one POS terminal. On the other hand, cloud-based software offers the same functionality while also being able to sync information from multiple POS terminals and allowing you to access it from other devices, such as a mobile phone or desktop. Due to its greater flexibility, cloud-based software is recommended for larger businesses.

The final piece of a POS system is the payment processing services. Most POS system providers will also function as a credit card processor, acting as an intermediary between the merchant, the customer, and banks. These services typically come with additional fees.

How to Use a POS System

Using a POS system is actually incredibly easy. They are designed to be intuitive and user friendly. The hardest part of using a POS system is choosing which one is right for your business. There are hundreds of options to choose from and it can feel impossible to know what the right choice is. Five Star Merchant Advocates can help you make this decision. Once you have your POS system provider, they will provide you with all of the training resources you need to ensure you and your staff are able to effectively use the system.

Benefits

A POS system offers a multitude of benefits to your business. Some of the most useful are:

Reporting and analytics: A POS system allows you to monitor sales, identify top-selling items, view monthly sales trends, and build custom reports.

Integration: Most POS systems allow for integration with other software, such as accounting and payroll.

Management: A POS system can provide you with the ability to track hours, create schedules, and schedule time off.

Industry specific features: Some POS systems are designed with a specific industry in mind, implementing tools helpful to that industry. For example, a system intended for retail may offer an advanced inventory system.

Customer support: Your system provider is available to answer any questions you may have to help ensure that you are using the POS system to the fullest of its capabilities.

These benefits mean that a business using a POS system will find that their operations run much more smoothly than they did prior to the implementation of the system.

What Are the Best POS Systems for Restaurants?

There is no one system that is best for all restaurants. Which system is ideal for your restaurant will depend on your needs and what capabilities you require in a POS system to meet those needs. However, some of our top choices are Toast, Clover, TouchBistro, and SpotOn. All of these provide POS systems that will greatly help with a restaurant’s operations. Which one is the right choice for you will depend on certain factors, such as the type of restaurant (quick service vs more upscale), whether you have a single location or multiple, and how profitable your restaurant is.

POS Systems for Small Business

Most small businesses can benefit immensely from the use of a POS system. As mentioned, they can help with inventory, management, and perhaps most importantly, payment processing. Unfortunately most small businesses also operate on extremely thin margins, meaning that the cost of payment processing is usually at the top of the list when it comes to the deciding factors of which POS system/payment processor to use. At Five Star Merchant Advocates, we can ensure that your business is using a system that is affordable, while also offering all of the capabilities you require to effectively run your business.