A Point of Sale (POS) system is an integrated software and hardware solution for retailers to manage sales. POS systems take the place of conventional cash registers by handling transactions, plus POS systems can:
A POS system is made up of 2 main parts – the hardware, such as a printer, cash drawer, and a POS terminal, and the software, which is the computer program that operates the whole system. A POS system works by connecting your credit card processing apps, accounting apps, inventory apps, and other point of sale-related business apps into a single unit.
There are 4 main types of POS software:
This software is cloud-based and comes as an app on your smartphone or tablet. It’s usually compatible with a receipt printer and a credit card swiper, but not as powerful as a full terminal POS system. It’s ideal for sole traders such as plumbers or mobile food cart owners.
The tablet version is similar to mobile POS software, but offers more features and capabilities. You could use tablet POS software to manage a large and complex retail organization, including inventory tracking, employee time tracking, payroll, and accounting. They are compatible with many POS hardware solutions to form a complete POS system for any situation.
This is a fixed POS software with full back-office capabilities. It can be cloud-based or on-premise. Terminal POS software is best suited to large retail stores, spas, malls, and other brick and mortar businesses.
This is designed to be used in kiosks and outdoor units where it's not practical to post an employee. It is often integrated with another POS system nearby, like to provide an extra sales point in a busy grocery store. It can be cloud-based or on-premise since it's not used with a mobile system.
You’ll also find POS software designed for the unique needs of specific industries, such as restaurant and hospitality businesses, apparel retail, financial services, academia and education, and pharmaceuticals POS software.
The costs of your POS software will vary depending on the type of software you choose. Mobile POS software such as a smartphone app can begin at $50 per month, while more complex software can reach several hundred dollars monthly. When you buy POS software, you’ll usually need to pay an upfront purchase price, plus an ongoing monthly or yearly payment processing fee.
Other factors that may affect the cost of your POS software include:
POS hardware is the indispensable other half of your POS system. You’ll need to get the right hardware to match the actions and transactions you want to carry out using your POS system. A basic set of POS hardware consists of:
Depending on your business, you might also need:
With a POS system, your business can retain more customers through a better, targeted loyalty program and you can also track inventory so that you never run out of stock unexpectedly. A POS system can help you run complex discount offers when appropriate.
With the right POS system, you can also analyze sales history to discover seasonal buying trends and correlations, which can come in useful when you want to increase sales. You can also remove manual error by using barcode scanners and automatic synchronization, as well as combat absenteeism with a more reliable employee tracking system.
Other major benefits include improving payment security as well as the ability to make more sales thanks to your ability to accept more types of payment.
A cloud-based POS system stores data on remote servers and can be accessed online, whereas a traditional or on-premise POS system stores data on a local server and can be accessed through an internal network. Here’s a breakdown of the main differences between a cloud-based POS and an on-premise POS:
If you have long-term business plans and if your requirements are likely to continue to evolve as your business grows, then a cloud-based POS system is probably the best choice for you. On the other hand, if you have fixed needs or a small budget, you might be best served by choosing a traditional POS system.
Asking yourself these questions will help you choose the right POS system provider:
Small to medium retail businesses that need mobile, flexible POS solutions.
Shopkeep is an all-in-one cloud-based POS system that is designed to be run on your iPad and is perfect for retail businesses. Features aren't limited according to pricing tiers, so every customer can use capabilities like accounting, marketing, payroll and time management integration, mobile integration, and complex payment processing to keep track of their retail activities.
Restaurants and food service businesses of any size.
TouchBistro is a POS system designed for use by restaurants and similar food service businesses, so it includes full ordering functionality, automated delivery tracking, real-time complex inventory tracking, split check capabilities, floor plan tools, and more. It’s designed for Apple devices and is very easy to use.
Independent retailers and restaurants
With LightSpeed you can manage your inventory with pre-loaded catalogs and a synced product history both in-store and online. Accounting integration with Quickbooks takes only a few clicks. You can also manage special orders and discounts from your Mac or iPad, and include special touches like branded receipts.