A point of sale, or point of purchase, is where you ring up customers and accept payments. When customers check out online, walk up to your checkout counter, or pick out an item from your stand or booth, they’re at the point of sale. You can even do this on existing hardware you already use for your business—your computer.
Your point-of-sale system is the hardware and software that enable your business to make those sales.
A point of sale (POS) system is an essential tool for any small business owner that sells products or services in person. As a business owner myself, implementing a POS system was one of the best decisions I made when starting my small retail shop. In this article I’ll explain what POS systems are the different types available, and how they can benefit small businesses like mine.
What Is A POS System?
A point of sale system refers to the hardware and software that allows a business to process in-person payments. The “point of sale” simply refers to the place where a transaction occurs – for example, a cash register at a store.
POS systems are comprised of software that’s installed on devices like computers, tablets, and mobile devices, plus hardware like card readers, cash drawers, barcode scanners, and receipt printers. Together, the software and hardware allow you to securely process debit and credit card payments, track sales and inventory, manage customers, generate reports, and more
The Core Components Of A POS System
While POS systems can include various hardware and software capabilities, most POS systems include these core components:
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POS Software: The software provides the interface for processing transactions. It’s installed on devices like iPads, tablets, laptops, or proprietary POS terminals. The software tracks sales, integrates with inventory management, generates reports, and more.
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Payment Processing: To accept debit and credit cards, POS systems integrate with payment processors like Stripe and Square. This allows secure card transactions. Some POS providers have their own built-in payment processing.
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Receipt Printer Provides paper receipts for customers after a transaction Many POS systems let you email digital receipts as well
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Cash Drawer: Holds cash, checks, and cash equivalents like gift cards safely. The POS software will automatically open the cash drawer when a transaction is completed.
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Barcode Scanner: Allows quick scanning of barcoded products for faster checkout. Especially helpful for retail businesses.
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Card Reader: The physical device that reads the credit/debit card information when a card is swiped or tapped. Card readers connect to the POS to facilitate payments.
The Types of POS Systems For Small Businesses
There are a few main types of POS systems that small businesses like mine generally use:
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Cloud-Based POS: The most popular type today, these systems are hosted remotely (“in the cloud”) and accessed via the internet. This allows access from any internet-connected device. They’re easy to set up without needing local servers.
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Locally Installed POS: These systems are installed directly on a computer or server on your premises. This gives you more control but is more complex to set up and maintain. They also limit you to that one location’s devices.
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Mobile POS: Apps turn devices like smartphones and tablets into mobile registers, ideal for small vendors, food trucks, craft fairs, and pop-up shops. They’re inexpensive and easy to transport.
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Terminal POS: An all-in-one POS terminal with built-in hardware like a screen, card reader, receipt printer, etc. Streamlined for retail and hospitality businesses. Fixed to one location.
No matter what type you choose, today’s systems are much sleeker and user-friendly than the old legacy POS systems of the past. The ongoing innovation helps small business owners like me implement modern, affordable, and versatile point of sale solutions.
Key Benefits of POS Systems for Small Businesses
Implementing my POS system completely changed my business operations for the better. Here are some of the biggest benefits I experienced:
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Accept credit/debit cards: This is an absolute must today. A POS system securely facilitates card transactions through encryption and processor integrations.
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Track sales and inventory: The software records every transaction so I can view historical sales data and get inventory insights. I know what products sell best and when to reorder.
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Gain customer insights: With the data, I better understand my customer base and purchasing trends. I can provide personalized offers to reward loyal regulars.
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Access anywhere: With a cloud-based system, I can access sales data and inventory from anywhere via my smartphone or laptop when away from the store.
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Send digital receipts: Email receipts reduce paper waste. Customers can also access receipts from anywhere.
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Save time: The POS streamlines everything, so less time is spent on manual processes like entering sales into the books. I can spend more time on the floor driving sales.
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Enhance security: Integrated credit card processing ensures every transaction meets security standards through encryption and tokenization. Cash in the drawer is also more secure.
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Improve accuracy: Scanning barcoded items, versus typing them in manually, ensures accuracy in checkout and inventory counts. Human error is reduced.
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Better compliance: Detailed sales records and reports help keep my business compliant with financial regulations. I have the data on hand if needed for an audit.
For any small retailer, restaurant, service provider, or other business handling in-person sales, deploying a POS system comes with numerous operational, customer service, and compliance benefits. The right POS solution can be transformative for scaling a small business like mine.
Choosing the Best POS System for Your Small Business
With the basics covered, how do you pick the right POS system for your unique small business? Here are some key factors I considered:
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Business Type & Size: Is the system designed for retail, restaurant, service businesses, or optimized for a specific industry? Will it scale as your grow?
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Budget: Affordable options like Square POS and PayPal Zettle start under $300 for the hardware. More advanced systems cost between $500-$3000 for the hardware alone. There are also monthly software fees.
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Features Needed: Do you just need basic POS capabilities or advanced features like detailed reporting, loyalty programs, employee management, etc? Match features to your needs.
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Hardware: Will you use a tablet setup? Terminal? Mobile solution? How much hardware do you need (terminals, scanners, etc)?
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Software Ease of Use: The software should have an intuitive interface and flexible configurations. Make sure your employees can be trained on it quickly.
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Payment Processing: Many systems offer integrated credit/debit processing. Make sure they provide competitive rates.
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Support: What support options are available if you need help? Live phone/chat support options are preferable to only having email.
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How does a POS system work at a small business?
A POS system allows your business to accept payments from customers and keep track of sales. It sounds simple enough, but the setup can look and work differently, depending on whether you sell online, have a physical storefront, or both.
A point-of-sale system used to refer to the cash register at a store. Today, modern POS systems are entirely digital, which means you can check out a customer wherever you are. All you need is a POS app and an internet-enabled device, such as a tablet or phone.
So what does a POS system do? Usually, it works like this:
- A customer decides to buy your product or service. If you have a physical store, they may ask a sales associate to ring them up. That associate could use a barcode scanner to look up the item’s price. Some POS systems, such as Square Point of Sale, also allow you to scan items with the camera on your device. For online stores, this step happens when a customer finishes adding items to their cart and clicks the checkout button.
- Your POS system calculates the price of the item, including any sales tax. Then the system updates the inventory count to show that the item is sold.
- Your customer pays. To finish their purchase, your customer will have to use their credit card, tap card, debit card, loyalty points, gift card, or cash to make the payment go through. Depending on the type of payment they choose, your customer’s bank then has to authorize the transaction.
- The point-of-sale transaction is finalized. This is the moment when you officially make a sale. The payment goes through, a digital or printed receipt is created, and you ship or hand your customer the items they bought.
What is a POS System? Definition of Point of Sale (POS) Systems with Examples
What is the best sale point system?
Restaurant point of sale systems include POS software and hardware that allow businesses to manage sales transactions. The best POS system for restaurants includes features that streamline restaurant operations. It’s also possible to track inventory, sales, and employee labor through these systems.
What are the benefits of using a sale point system?
Benefits include fast check-in, lower wait times, increased revenue collection before the service is performed, more accurate patient data, and visibility over patient flow. SalePoint has been providing solutions to higher education institutions since 1987.
What do sale point systems include?
POS systems, or point of sale systems, are the devices where sales transactions are completed. Different business industries utilize these systems, including those in the restaurant industry . Restaurant point of sale systems include POS software and hardware that allow businesses to manage sales transactions.
What is the difference between a point of sale system and a POS system?
A point of sale (POS) system is where customers make a payment for goods or services at your store. Every time a customer purchases something at your business, you have a POS transaction. A POS system serves as a hub for your business’s transactions. Everything from sales to inventory to customer management merges into your POS.
