From the front counter of a saloon in Ohio to modern shops and cafes all across the country, Point-of-Sale systems have been a part of American businesses for decades[1]. They allow quick, secure payments and seamless interactions between a business and its customers. With further advancements in its hardware and software, point-of-sale systems are also a central source of valuable information and powerful insights for your business.
Below, Payment Nerds discusses everything there is to know about Point-of-Sale systems — the definition of POS and what a POS does for your business. We also discuss its benefits, costs, expectations, and potential optimizations you can do to make your POS work for you. Finally, we go over some of the top POS providers to choose from.
‘POS’ Meaning Explained
The acronym “POS” may be short for a term staff would use for finicky older-generation registers. However, it’s also used as a common term in business, more specifically in checkout and payment processing — it stands for Point Of Sale.
Generally, “point of sale” means a place where something is sold within a public space or where someone pays for something[2]. Traditionally, it was used to refer to a cash register at the front of a store or cafe. However, today’s digital, interconnected world encompasses so much more.
Point-of-sale systems can now operate beyond your typical brick-and-mortar store. Mobile POS devices allow more on-the-go businesses, such as event services, food trucks, and personal trainers, to process payments with their customers quickly and easily. They also give traditional businesses more flexibility on processing payments and completing purchases.
A host of powerful and intuitive hardware and software systems also make up a modern POS, meaning a point-of-sale can handle more aspects of the sales process than just receiving payments from customers and accurately processing transactions with them.
Instead of just a basic cash drawer, today’s POS systems can be fully integrated with other digital tools, creating a powerful, centralized platform for managing multiple aspects of a business.
What a Point-of-Sale Does For Your Business
Over the past several years, POS systems have evolved from simple cash registers to complex tools that support multiple business functions. They provide ease of use and simplicity for tasks that require manual input while automating others to improve productivity and efficiency.
Here’s a breakdown of the main tasks a modern point-of-sale system can perform:
Sales Transaction Management
The basic function of every POS system is to handle the key aspects of a sale, from scanning barcodes and applying discounts to calculating totals and processing payments, whether customers are using cash, credit, debit, or a digital wallet. Performing these tasks all in rapid succession makes time waiting at the checkout counter a breeze, creating a better customer experience[3].
The latest web-connected POS terminals can also generate digital receipts instead of physical paper ones. With just an email or phone number, merchants can send customers a receipt for their purchase to their preferred email account or as a text message.
This makes many aspects of a customer’s experience easier and more convenient than ever. For example, if a customer wants to make an exchange or return, in the past, they would need to have their receipts, generated in print, in their hand. Now, they can easily find them ready to use on their smartphone.
Overall, nearly every available POS today is designed to ensure smooth and accurate transactions so businesses can give customers a more enjoyable shopping experience.
Inventory Tracking and Management
Many advanced POS systems also provide built-in inventory tracking features. These automatically track items sold and compare them to the amount left in stock, helping business owners monitor their product inventory levels in real-time.
Additionally, this feature may be programmed to send alerts in the event a particular item’s stock availability gets too low. Once the alert occurs, it can be automated to send messages for additional stock. This simplifies your inventory management processes and helps you avoid stockouts[3].
In addition, data from your POS’s inventory management system can help you identify which products or services are the most popular for your business. This way, you can efficiently spend resources on what earns you the most returns while avoiding unnecessary costs.
Customer Relationship Management (CRM)
POS systems also have customer relationship management (CRM) systems built into them or can integrate with various third-party CRMs. These platforms allow businesses to gather, store, and provide insights into customer preferences and trends.
With the right CRM tools, your business can develop customer profiles based on their purchase history, preferences, and contact information. Gathering and storing enough customer data, you can then develop more personalized products and experiences for them.
Point-of-sale systems with CRM tools also allow you to develop loyalty programs, track customers as they continue to purchase goods or book a service with you, and offer rewards and discounts for being a loyal customer for your business[3].
Even better, using your customers’ contact info, you can then send special offers, promotions, and specialty discounts directly to them, increasing the chances of them becoming a return customer.
Reporting and Analytics
Among the best POS systems, reporting and analytics features allow you to quickly and easily generate sales reports full of business-critical insights. From peak store traffic times to top-selling products and other vital trends, these features can reveal crucial information that can help improve your business operations.
In addition, these features can also help you track employee performance, highlighting which team members earn the most in sales and why. It can also showcase schedules, track work hours, and measure other aspects of performance, such as the number of chargebacks or purchase disputes they received[3]. Being able to see and measure how effective your team is or isn’t will allow you to reward good work and figure out how to adjust poor performance.
Finally, the insights you get from your POS system reporting and analytics features include the ability to make data-driven decisions about your business. With real data at the forefront, you are more likely to develop and implement strategies that will drive sales and ensure your business succeeds[3].
Get the right point-of-sale system for your business with help from Payment Nerds. We’ll set you up with a custom solution that allows you to process mobile, cash, and card payments.
Benefits of POS Software & Hardware
Investing in a POS system offers numerous advantages that go beyond simple transaction processing. It allows you to upgrade your service, restaurant, or retail operations, improving your business and its operation in many ways.
Below are some of the key benefits you’ll get from the hardware and software of your POS system:
Speed & Efficiency
First and foremost, modern POS systems streamline retail operations, making checkouts speedier and easier to process. Similarly, the modern restaurant POS system allows guests to pay right at their table, allowing them to split or share the bill as they choose while providing additional time for waiters and servers to cover more tables. By providing more functions, more options, and faster service to customers, modern POS systems help take businesses to a whole other level[4].
Greater Flexibility
Several POS systems are mobile-friendly, with some even providing a range of mobile-specific hardware that is compact and can fit in your pocket. These mobile POS devices can accept mobile and contactless card payments, often sacrificing cash. Regardless, it means businesses with a mobile POS system can accept payments almost anywhere they go, simplifying transactions for all kinds of businesses that exist beyond brick-and-mortar storefronts[5].
Improved Customer Experiences
More than anything, recent POS software systems have allowed for faster, smoother transactions and convenient digital receipts. They’ve also allowed companies to develop strategies to personalize their customer experiences. Now, after your POS system collects customer data and payment details, you’ll have the information to provide precise recommendations and loyalty rewards to customers with an extensive purchase history.
Costs of POS Systems
As your business considers investing in a POS system, one of the main factors in determining which provider you choose will be cost. Below, we break down some of the typical expenses you should expect to find when shopping for a proper POS system for your business. Here’s a list of what may be included as part of your bill:
- Hardware: One of the biggest elements in the initial cost of your new POS system is purchasing compatible hardware for it. Though this is only a one-time fee, the total cost can be quite steep, especially if your business has multiple locations or more than one checkout counter. The cost includes physical equipment such as cash registers, card readers, barcode scanners, and, in some cases, tablets. Overall hardware costs will vary widely depending on the size and type of business you’re in[6].
- Software: POS software usually requires a monthly or annual subscription. The cost varies depending on the features included, such as inventory management, CRM, and advanced reporting. Access to additional support services, integrations, and users may cost even more[6].
- Processing Fees: A processing fee is charged every time a customer makes an electronic payment using a credit card, debit card, or mobile app. These fees vary by provider but are typically a small percentage of each transaction plus a few cents[6]. To learn more about these fees, check out our article on credit card processing fees.
- Maintenance and Support: Some providers charge extra for customer support, training, and regular software updates. These services can help ensure the system runs smoothly and efficiently.
What You Should Expect When Setting Up Your POS System
Adding a new POS system to your business is like renovating the inside of a house — it’s going to take a while to get used to it. Moreover, if there are any issues with these changes and they aren’t dealt with before your business reopens to the public, it could lead to serious problems.
Below, we share a few steps you should expect to take as you set up your POS system. Of course, with the help of a professional and courteous payment processing service like Payment Nerds, you’ll be able to install a custom POS in your business with little to no problem.
Here’s what to consider as you install a new POS:
Installing the Hardware
The first step out of everything is to install the hardware. This includes the registers, card readers, barcode scanners, and other types of POS hardware you may want to include. This will likely also involve connecting them to wired and wireless internet connections within your physical store.
Setting Up the Software
After installing the physical POS devices, the next step is to power everything on and set up the software for each device. This often involves adjusting the software settings of the POS system’s operating system, including time, date, and various details of your store location.
More importantly, this will also be the time when you or your POS provider’s support team will customize your software settings. These will include your company’s specific products or service offerings, as well as additional tax rates, fees, and service charges the system will add to every customer transaction.
Training Your Employees
Whether you want to train during the setup period or after it’s completed, you should expect to train your employees in using the new POS system as part of their daily and weekly operations. Fortunately, most POS providers offer accessible and well-designed training resources for their systems. Some even provide on-site training assistance, ensuring your staff knows all the ins and outs of your new POS.
Testing All Systems
Finally, prior to opening your store again, your POS system should be tested to deal with a variety of common and uncommon events that occur at checkout, such as mistaken item scans, return requests right after purchase, and so on.
Putting the system through all these different scenarios can reveal issues that could be problematic or disastrous if they occur during real customer transactions. Usually, these sorts of tests are conducted with the assistance of your POS system’s support team.
Once all these steps are completed, you should have a ready-to-go point-of-sale system. If you are looking for a scalable, custom-fitted POS system to install or replace your existing business’s system, talk to Payment Nerds.
Top POS System Providers
Finally, we conclude our guide on point-of-sale systems with a list of potential providers. Some provide variety, while others offer their own proprietary systems for you to choose from, along with a range of features and additional services to consider. Here are just a few of the POS providers for you to choose from:
Payment Nerds
Payment Nerds offers a variety of POS solutions that can be custom-fitted to your industry’s needs and requirements. We will also make sure our POS can integrate with your existing systems, in addition to key software platforms like Quickbooks, Shopify, and along with many other management tools.
We offer cloud-based POS systems, which allow multi-franchise businesses or those with fast-paced back-office operations to track transactions, access sales reports, manage inventory, and manage other aspects of their business anywhere, anytime, and on nearly any device[7].
A few other key features of our POS system solutions:
- Scalable to your business as it expands into becoming a high-volume, multi-location enterprise[7].
- Fully secured with the latest data encryption and fraud prevention tools, all systems are PCI-DSS compliant[7].
- 24/7 support from dedicated experts ensures that you and your customers always get the assistance you need[7].
Clover
Clover is another POS systems provider that offers a range of proprietary hardware and software solutions and payment processing services. Its offering includes fully-tuned POS systems made for specific business types, such as retail and dining, but can also provide hardware and software solutions for small and enterprise businesses.
Their key features include:
- Customizable hardware options, including the Clover Station, Mini, Flex, and Kiosk[8].
- Flexible funding programs to ensure their solutions are widely available[8].
Square
A well-known POS provider, Square offers a versatile array of hardware and software, along with online solutions, to ensure its customers can seamlessly integrate its web presence with their business’s POS. It also offers pre-built POS systems specialized for specific businesses.
Some of Square’s distinct features include:
- Mobile card readers are easy to set up, and a wide array of POS hardware systems are available (ranging from $59 to $800 per piece)[9].
- Fast setup and easy-to-use payment interface.
Helcim
Another payment process that doubles as a POS system provider, Helcim offers a small line of its own products, including the Smart Terminal and Card Reader. They also offer their own iPhone application, allowing businesses to perform transactions with customers almost anywhere and anytime so long as they have the appropriate hardware[10].
Some of Helcim’s main features to consider are:
- Simple, easy-to-use devices, along with free POS software, can be used on various devices[10].
- Additional software tools include inventory management, CRM, and invoicing[10].
Conclusion
Modern POS systems offer an abundance of features that greatly benefit almost every kind of business out there. However, businesses should select the right system according to the specific needs and requirements of their industry while also providing payment processing services that are feasible and affordable. The top providers we listed above are just a few on the market — and we recommend you search thoroughly to find the best fit for your business.
At Payment Nerds, we do everything we can to provide our customers with the best payment processing services possible. To ensure we meet your expectations, we provide flexible and transparent pricing options and custom-fitted solutions, especially for those looking to install or replace their existing POS system.
If you are looking to transform your POS system or are looking for a better payment processing option, check out Payment Nerds today.
Sources
- [1] Investopedia. “What is Point of Sale (POS)?” Accessed November 6, 2024.
- [2] Cambridge Dictionary. “POS.” Accessed November 6, 2024.
- [3] TechnologyAdvice. “What is a POS System? Overview, Meaning & Best Practices.” Accessed November 6, 2024.
- [4] Business News Daily. “Small Business Guide to POS: Point-of-Sale Systems and Software.” Accessed November 6, 2024.
- [5] Business News Daily. “5 Reasons You Need a Mobile POS System for Your Restaurant.” Accessed November 6, 2024.
- [6] Business News Daily. “The Best POS Systems of 2024.” Accessed November 6, 2024.
- [7] Payment Nerds. “POS.” Accessed November 6, 2024.
- [8] Clover. Accessed November 6, 2024.
- [9] Square. “Point of Sale.” Accessed November 6, 2024.
- [10] Helcim. Accessed November 6, 2024.