What Is a POS System and How Does It Work?

 A Point-of-Sale (POS) system is an electronic system for recording sales transactions. POS systems are used in retail, restaurant and bar establishments to record sales transactions at the point of sale, so that they can be processed later by a central computer. POS systems also provide real time reporting via electronic data capture etc., which enable business owners to make decisions in real time.

A POS system is composed of the following major components:

(1) A software application that runs on client computers within the store or other locations. Client computers are used to process customer transactions and do commodity subtotals, tax computations and schedule alarms for reminders;

(2) A computer or terminal located at each cash register where a customer conducts transactions. The terminal displays the items being purchased, allows entry of signatures and makes change as required. Advanced models can also accept payment by debit/credit card via a payment terminal;

(3) An electronic device that communicates with the product scanner to collect information about commodities being purchased. This information is sent to the terminal for processing, including price calculation and transaction totals;

(4) A modem that transmits card authorizations to the merchant bank. The vendor receives a confirmation of the completion of each transaction. There are different types of POS software applications available in the market depending on specific business needs. Some examples include, QuickBooks Point of Sale, ShopKeep POS and Inventory Pro.

What Are the Benefits of a POS System?

POS systems help business owners streamline their operations by allowing them to manage inventory more efficiently and keep track of multiple locations from a central point. They also allow business owners to track expenses, employee hours and customer profiles on a real time basis and enable them to generate reports and graphs on demand. POS systems also allow business owners to process payments quickly and easily, which helps decrease lineups at cash registers and allows more customers to be served in a given amount of time.

POS systems also provide business owners with customer demographic information, such as purchases by category, total purchases by customer, the best selling items and average purchase amount. This information allows business owners to customize their product mix to meet customer preferences and effectively manage their inventory. They also provide detailed reports that can be used by management to track which products are selling well in specific locations, allowing changes in inventory where necessary. POS systems allow for different pricing strategies to be employed, depending on the type of establishment.

What Are Some Common POS Software Applications?

There are a number of different types of POS software applications available in the market. For example, QuickBooks Point of Sale is an integrated point-of-sale software application for businesses that sell inventory and accept credit cards at their stores, restaurants, clubs etc. ShopKeep POS is an online, cloud-based point of sale system for small businesses that's simple to learn and easy to use while Inventory Pro is a multi-location business management solution for inventory tracking that allows real time visibility into your entire company.

What Are the Different Types of POS Systems?

There are two main types of POS systems: traditional and integrated. A traditional system requires each cash register to be equipped with a separate computer that is designed specifically for POS use. Integrated systems combine the terminal used by the customer at the point of sale, known as an electronic cash register (ECR), along with other hardware components, such as scanners, scales etc., in a single unit.

What are the Significance of POS Terminals?

There are two main types of point-of-sale terminals: touch screen and keyboard, both of which have their own advantages and disadvantages. Touch screen terminals were the first type to be developed in use today, but they have certain limitations when it comes to data entry. For this reason, many of touch screen terminals now come equipped with a separate keyboard and trackball for easy data input. However, the trackballs and keyboards found on these terminals tend to wear out easily and can be expensive to replace.

Keyboard POS systems were developed to address the limitations of touch screen systems when it comes to data entry. However, they are typically more costly than touch screen terminals, and it is difficult for users to enter data on the keypad while simultaneously looking at the screen to verify that the data has been entered correctly. Another drawback of these systems is that because they often lack touch screens, customers cannot view product images or information easily.

What are the Advantages of Integrating POS with an ERP System?

Integrating your Enterprise Resource Planning (ERP) system with your point-of-sale system is one of the most effective ways to ensure that all data related to sales, inventory and customer profiles are readily accessible by business owners when they need them.