What Is POS Software Used For?

By Ruchir C.

Running a retail shop requires various managerial, administrative, and marketing capabilities. These abilities are required for your shop to operate smoothly, from ensuring you have sufficient inventory to creating quarterly sales records.

A well-functioning custom Point of Sale software can be a huge help to ensure that your business operations work in harmony and that retailers who put in the time and effort to establish a POS system before they need it will enjoy the rewards. This article will talk to two experts in the field who will give you tips on what you should look for in a point of sale (POS) and how to pick the right one for your restaurant or retail store.

It's easy for transactions to slip into the wrong hands when you're manually handling an influx of transactions every day, particularly during the pandemic, when the majority of transactions are conducted online. If not checked, this can result in incorrect reports and sales that are not properly accounted for and difficult bookkeeping.

This is why many companies use points-of-sales (POS) solutions to simplify everything from processing payments to tracking inventory. But, you might be asking, what exactly is POS software, and what could help you?

This article will discuss the software's features and how it functions with its functions, as well as its advantages. We've also put together a list of examples of well-known POS solutions. Take these as guidelines to ensure that when the time arrives for you to pick POS software, you'll be in the most advantageous position to make an informed choice.

What Is POS Software?

The Point-of-Sale (POS) software acts as the platform you use to manage your physical store and sell products in person. This is the software store employees use to search for products, place them on order from a customer and take payments. POS software also comes with useful tools for integrating integration of sales reporting, inventory management, sales reporting, and loyalty programs.

A point of sale (also known as a point of purchase) is where you can ring your customers. For example, if customers go online, walk into your counter for checkout, or select items from your booth or stand, they're selling their items.

The point-of-sale system you have is the software and hardware that allow your business to generate those sales.

The point-of-sale system, also known as POS, is where your customer can make payments for goods or services in your store. Simply put, each time an individual makes a purchase and makes a purchase, they're making a POS transaction.

The latest point-of-sale software extends beyond credit card processing to assist restaurant and retail establishments in integrating mobile POS features, alternative payment methods that do not require contactless technology, e-commerce integration options, and much more.

In Software Advice, our advisors assist buyers of small-sized business software in choosing the right retail POS software daily. We asked our senior adviser Julia Morton, who helps POS buyers with software with the need for the right Point of Sale system.

A POS device -- also called an ePOS system allows customers to purchase their desired products when they purchase. When we talk about POS systems, we're talking about the software and hardware which allow cashiers to call up sales.

A well-known POS name, Square (opens in new tab), can be described as the simplicity and complexity of the POS system by providing this great description: "A POS system allows your company to accept the payment of customers as well as track sales. It's a simple concept. However, the system can function in different ways depending on the type of business you operate. For example, you can sell products online, have a physical storefront, or both."

What Are The Benefits Of POS Software?

POS software connected to your online store can help you manage your entire business on the same system. For example, suppose retail and ecommerce stores are connected and are managed from the same location. In that case, this makes managing and expanding your business easier.

Manage Your Inventory in One Place

Suppose you sell on the internet and in your store with different systems. In that case, the odds are you're using an application programming interface (API) to exchange inventory information between both. Unfortunately, although APIs can transfer information between two systems, they're not always secure.

APIs are created by third-party developers, i.e., businesses that aren't part of your ecommerce platform or your POS software vendor. Although the API shares information between both systems, the data doesn't get shared in real-time.

In most cases, it's because the API isn't able to transfer data as quickly when it changes between the two systems. Words Felix Ilett, Head of Sales for the resort clothing brand Mister Zimi describes that relying on APIs to exchange inventory data among the POS software and an e-commerce platform comes with risks.

Get a Complete View of Your Customers

Suppose POS systems and e-commerce platforms are linked. In that case, they help you collect, track, and manage customer information more efficiently.

Shopify POS, for instance, allows you to create profiles for your customers and view their entire purchase history. Everything they purchased online or from your store is shown with the amount they've spent up to now, the number of times they've purchased, and for how long they've been a client.

Instead of exporting data and creating custom spreadsheets, your customer's information is stored centrally located and updated continuously in real-time.

This is beneficial to as well your service to customers as well as your marketing. Store personnel can easily access a customer's profile and gain information to serve them better.

Marketing teams can easily segment customer profiles and develop email lists to drive retention campaigns that keep customers interested and boost repeat purchases.

Boosts Revenue

We've previously discussed ways a POS system can boost your profits by enhancing customer service and keeping up with the pace of technological advancement. However, even with the latest features, the POS can boost revenue by increasing the number of revenue streams or channels for sales that your small-scale business can manage.

In addition to in-person sales and appointments, you could add other ways for customers to engage with your company through mobile events, online pop-up stores catering, or even subscription services. For example, salons specializing in cutting and color services may consider adding an online store selling their preferred hair-care products.

A popular restaurant for burgers might decide to venture into catering. A vintage clothing store can effortlessly take its business off the beaten path to greet customers at community events and outdoor markets.

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Automates Tasks

Automation is a fantastic method to manage your company more efficiently and precisely. If you select the correct POS, you can automate processes like scheduling employees and managing inventory.

In addition, you can modify your system to notify your staff of shortages in stock or who are about to go on overtime. This can take some of the stress out of gauging stocks and can help avoid the cost of issues such as stock shortages or excess dead stocks.

Many POS systems have built-in employee scheduling tools or integrate with top-of-the-line tools such as 7shifts and Homebase. These tools will automatically populate employees' schedules according to the availability of staff and sales and make your POS able to refuse early clock-ins or hours of overtime.

Early clock-ins and overtime that is not authorized as well as "buddy punching" (where one employee clocks in the other), are all types of time theft that can cost US employers as much as $400 billion annually.

If your business relies on a manager, it will help save time in customer management. Studies have revealed that as much as 20 percent of managers spend time writing schedules.

It is also possible to reduce expenses by automating your inventory, setting low-stock alerts, creating automatic purchase orders, and online ordering channels. Certain POS systems provide advanced functions, such as predictive analytics and management of vendors too.

Efficiently Use Labor Sources

Each company is estimated to invest around 70% of its operational expenses in managing human resources. This part of their budget is allocated to worker wages and welfare, tax-related, and more. This is why businesses are often looking to implement technological innovation to reduce the cost of labor.

Instead of implementing software for managing the workforce or POS systems, a POS solution could be a better choice. Nowadays, each POS system comes with useful features that assist payroll systems and monitor the performance of employees.

Furthermore, POS systems can automate manual tasks like cash register reconciliations or checks for the disparity. This means that staff can focus their time and energy on more pressing issues such as customer service.

Some of the most robust POS providers also provide kiosk POS systems that allow customers to purchase items independently without needing store personnel. This technology allows retail stores to provide for their customers in minutes and without delay.

Speed Up and Secure Payment Process

Data and time are important intangible assets for every company. There is a direct correlation between faster and safer service and a higher volume of customer traffic.

To help speed up and ensure secure payment procedures, a connected point-of-sale solution can simplify debit and credit card processing and ensure that human errors are not made. In reality, Finance Magnates has shown that consumers prefer cashless payments.

As a result, by 2025, approximately 75% of all transactions will be made using cards.

Furthermore, payments made via POS are said to be faster and safer than alternatives. This is because many POS systems integrate with trusted payment gateways like PayPal, Amazon Pay, or Apple Pay and will only accept valid cards.

Therefore, customers can be assured they can complete transactions swiftly without fearing payment fraud.

Alongside credit and debit cards, contactless transactions are also supported by strong POS systems. Contactless payment users need a mobile phone close to the POS terminal to complete the procedure quickly.

Instant Online or Offline Access to Your Retail Business

Cloud POS system lets you access your information from any location. This is an enormous benefit for those who travel and work remotely. Furthermore, it allows you to work online or offline, meaning there's practically no time you're unable to work.

Suppose you have an electronic point-of-sale device that supports an offline mode for POS that allows you to continue making sales even if your Wi-Fi connection fails. For instance, if it's a severe storm and your Wi-Fi goes down, you'll be able to continue selling. In addition, after you're online, your stored data will have been synchronized perfectly with no issues.

Suppose your ecommerce development and retail store data are within the same system. In that case, it's much easier to have an entire picture of your company.

Instead of exporting data from your online e-commerce platforms or POS software to create specific reports for your business, you will get an entire view of the sales for your business and can sort by sales channel. Seeing a complete picture of your revenue makes it simpler to identify what items are moving and which ones aren't.

What Are The Types Of POS Software?

It is also crucial to keep in mind that there are various types of POS software options that are available. They are based on the dimensions of the business, the type of business you run, and the system's preferred implementation.

Therefore, when you are looking to purchase a product for your business, ask whether the prospective vendors provide the kind of POS you need. This will help you save time and cash in the end. Three types of classifications are:

Mobile POS: This type of POS system is mostly used for inventory management and payments. It is ideal for mobile users since they can access it via mobile devices. However, due to the limitations in its functions, it's ideal for small-sized companies and retail stores solely for individuals.

Terminal POS: Comprised of software and hardware terminal POS systems, gives you all the features that the standard POS software can offer. This is a good alternative for people who require security and can only be used inside the office or via a controlled database. But, this kind of POS can be costly and therefore not recommended for small businesses with limited resources.

Cloud-hosted POS: Cloud-hosted POS allows you to use the features of your program online. It allows users to use any device available, including desktop computers and mobile devices, as well as other devices capable of working with your software. This type of POS can combine the versatility of a mobile POS system with the features offered by a terminal POS, which makes it an ideal choice for all businesses.

If you're looking for the different features, types, and benefits of POS systems explained in greater depth before you begin looking for platforms, look at our guide on the various characteristics and functions of POS systems.

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Conclusion

In the final analysis, POS solutions allow small independent restaurants, small-scale retailers, and even independent stores to run at the same efficiency level as large corporations. They have also never been cheaper (many well-known POS brands, such as Square and Toast, provide systems with no software costs).

If you've been struggling with the decision between POS and registers, choose an option that provides trial or short-term agreements and runs on the equipment you already have (like one of the iPad). Then, explore our guide on the top POS systems for small-scale companies to discover the best one for your needs.

Today, the most important factor in making customers happy is to be customer-centric. The easier it is for customers to purchase, the more they'll want to stay in touch with your company.

In this age of technological power, retailers must be up-to-date and keep pace with the ever-changing trends to stay at the forefront of the marketplace. With POS advantages, let your productivity rise and prosper!

The first step in getting the most value out of your point-of-sale system (or any other platform) is being interested. Many solutions are loaded with helpful features, but customers do not notice them because they do not take the time to look into the platform fully.

Don't let this happen to you. If you're using an existing POS, try playing around with it to ensure you're using all the features. It is also possible to look over the system's resources (i.e., help center and YouTube channel blog, help center, etc.) to gain more information about its various capabilities and features.

By doing this, you'll not just understand how to use the system but also get the most value from it and help take your business to the next stage.

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