What is a POS System?
A point-of-sale system (or POS system) is a retail management system that helps vendors manage various aspects of their business.
These are some of the basic features found in POS systems:
- Payment processing
- Printing of receipts and invoices
- Sales tracking and history
- Inventory tracking and management
- Loyalty programs
- Payroll management
- Tracking of employee hours, vacation time, and sick leave
- Sales tax calculation
POS vs Cash Register
The first electronic cash registers appeared in the early 1970s but were very limited. In 1974, McDonalds became one of the first businesses to deploy cash registers that showed customers the total, including sales tax, and calculated the correct amount of change. Electronic registers stayed much the same through the 1980s and 1990s, and many brick-and-mortar stores still use them today.
POS systems first appeared in the 1990s and have become more advanced over the years. Moore’s Law observes that computing power doubles every 2 years, and it is this increased computing power that has enabled everything from smartphones to driverless cars to POS systems.
With a POS system, you get everything you would get with a regular cash register—and more. A POS system handles sales, just like a cash register. It also does countless other things, such as inventory management, payroll, and accounting. As POS systems grow in popularity, more and more functions continue to be added.
A POS system comprises a hardware and software component. The hardware is the actual device, like a computer, that the software runs on.
Many POS providers sell sleek, modern cash registers for businesses to put in their store. When you place a POS system cash register on your countertop, it has 2 screens—one facing the customer and the other facing you. The customer can see whatever you want them to see; it could be just the purchase amount or it could be advanced features like a loyalty program. You control everything from your side of the counter, from sales to inventory to everything else.
Learn more about the top POS systems in our reviews >>
5 Reasons to Use a POS System with Cash Register
1. POS Systems Process Sales More Quickly and Accurately Than Old Registers
There’s nothing the twenty-first century shopper hates more than waiting to pay. Fortunately, POS systems process sales with greater speed and accuracy than those clunky old cash registers. With a POS system with scanner, the merchant doesn’t even need a price tag. They just hold the scanner up to the barcode or QR code on the product and the price pops up on the system complete with sales tax. If you have a large store or sell remotely, you can use a mobile scanner to process the sale wherever the customer happens to be standing.
2. It’s Easier to Track Inventory with a POS System
The old way of inventory management is time consuming and costly, in terms of the amount of missed sales from not having things in stock. Thanks to POS systems, inventory management is now simple and effective. These days, even the most basic POS systems have built-in inventory tracking and analytics. When the POS system processes a sale, it automatically marks that product as sold. When stock is low, the merchant receives an alert to put more of that product in store.
3. POS Cash Registers Keep Records of All Transactions
POS systems don’t just track inventory, they also track sales. With a traditional cash register, the merchant can find themselves wasting an inordinate amount of time sorting through receipts (printed or digital) when they need to find a transaction. With a POS system, merchants can search for transaction by date, product type, sales location, and even by customer. Advanced POS systems connect sales data to marketing and loyalty programs, allowing the merchant to target customers with personalized ads.
4. POS Cash Register Systems Simplify the Accounting Process
Perhaps the most underrated aspect of a POS system is the accounting component. All the best POS systems integrate with accounting software like QuickBooks and Xero. Each time the POS system processes a sale, the details are transferred straight to the accounting program. POS systems save merchants the time and energy of having to do all their accounting manually.
5. The List of Things You Can do with a POS System is Endless
A POS system is like a smartphone: it comes with basic functionality and you can add programs or apps as you wish. QuickBooks and Xero are just 2 examples. Other apps include: “Yelp for Business Owners,” which lets businesses view analytics and connect with people who wrote reviews; a program that dispenses the right amount of change in coins; and integration with your Ecommerce store. The possibilities are endless; as POS systems grow in popularity, more apps are constantly being introduced to the market.