As a small business owner, you are always looking for ways to make your business more efficient, cut costs and help your business grow. A POS system or Point of Sale system is a vital tool to help organize your sales, keep track of inventory, serve your customers and help out with administrative tasks.
Depending on the needs of your business, a POS system can do everything from ringing up sales, creating employee schedules and ordering new inventory. With so many options, it can be challenging to know what kind of system you need. Here we discuss the main features of POS systems for small businesses and how they can help your business thrive.
What Is a POS System?
A POS system or point of sale system lets you accept payments and keeps track of lots of valuable information for your business. A POS system consists of two main parts — the software and the hardware.
The software is the program that runs the system and can be tailored to simply calculate sales or run complicated programs that keep track of inventory, generate sales reports and expense reports and calculate employee productivity. Think of it as headquarters for your business information.
The hardware component is the physical objects that let you accept payment for sales in the form of credit cards, cash, and mobile payments. Some small businesses use tablets, receipt printers, cash drawers, card readers or registers as part of their POS hardware. Some small businesses rely on mobile POS systems, which allow you greater flexibility in location and sales options.
How Does a POS System Work?
So the primary job of a POS system is to accept payment for sales. Once it has taken the payment, the POS system has a direct connection to deliver the funds to your bank account and interact with the different credit card companies safely and securely.
A POS System can also take this information generated from the sale. The POS system keeps track of the data from the sale (e.g. cost, tax, customer information, product information, and time and date of purchase). This information can update your company inventory so you know how many of that item you have left in stock.
A POS system can also keep track of what goods are selling well and what may need a boost to help you manage your sales strategies. A POS system can also keep track of customer information so you know who your customers are, what they are buying and where they are coming from, which can help you tailor your marketing and sales promotions.
Depending on what options you choose, your POS system can also keep track of other business operations, including scheduling, marketing reports. All of these tools can be automated to help you gather the data and analyze it so you can make decisions informed by the data collected.
Who Needs a POS System?
A POS system can benefit anyone who needs to accept payment for transactions and requires security, ease of use and proper data tracking. It can provide valuable information for your business, keep your sales transactions accurate and secure and allow you to access the latest business technology.
If you accept credit cards as a payment method, it can be challenging to process the transactions securely and keep track of the sales information. A POS system makes this job easy and keeps your information and your customer’s information secure. You can also accept credit card payments on the go with a mobile POS system.
A POS system also keeps track of your sales and inventory, so you know when it is time to reorder a product before you run out of it. You can also see information about when certain items tend to sell — so if nachos typically fly off the shelves at your bar on Fridays, you’ll know to stock up the night before. You can take advantage of this information and introduce a special nacho night!
How Do You Choose the Right POS System?
Here are some things to consider:
1. What features do you need?
“Ok,” you say. “All that information is great — but I run a local gym and don’t have inventory to worry about, and I don’t take tips. Why would I need all of these features?”
It is essential to know what types of information and tools you need to run YOUR business and what is important to you. Every business is different, and what works for one kind of small business may not be helpful for another. If specific features are important to you, make sure the system you choose includes those features.
Most POS systems come equipped with basic sales abilities and can accept credit and debit cards, report on sales and keep track of inventory. If you have specific needs in your business, chances are you can also find a POS system that can help manage these. Possible specialized features include:
- Add a feature to split checks or add tips
- Add an on-line or take out ordering function
- Keep track of menu items and have the ability to communicate with the kitchen
- Monitor customers and keep track of busy days/time for staffing schedules
- Track inventory and set automatic order levels, so you don’t run out of what you need
- Keep track of customer information for easy returns and exchanges
- Plumbers, General Contractors
- Keep track of customer appointments
- Keep a record of parts and inventory and know when deliveries arrive
- Create customer invoices
- Handle payments remotely
- Keep a record of deliveries and orders arriving
- Keep detailed customer accounts for repeat customers.
- Gyms, Fitness Studios
- Integrated calendars and class schedules so you know where you need to be
- Keep track of busy dates/times for staffing schedules
An important consideration is your budget. Some POS systems are an investment, so you want to make sure you are getting what you need for the best price. You should also be clear on the costs for the initial set up and what your ongoing costs will be. Some cheap POS systems are inexpensive upfront but charge you more in fees and additional costs
Lease vs. Buying
Will you buy your system or lease it from a service provider? Be sure to consider all the costs and options. With one system, you won’t have ongoing lease fees, but you may be stuck if your system needs upgrading.
Credit Card Processing Fees
Be sure you know what the processing fees are for taking credit cards. Some companies take a fee per sale, and others take a % of the sales. Depending on your type of business, these fees can add up quickly.
Some businesses choose to charge a convenience fee to their customers to cover the cost. Many POS systems offer partnerships with credit companies that will provide you with a deal on the processing if you use their systems.
3. What security features do you need?
Whatever system you are interested in, be sure it can keep your data and your customer’s data safe and secure. There are new regulations around how businesses process data and store customer information, so make sure your system complies.
Whether you’re looking for POS systems for your restaurant or retail store, contact Point of Sales Research Group (POSRG) Canada. If you have questions about the best type of POS for your small business, we would love to help you out. We can take you through your options step by step and help you find the best POS system for you. Contact us through our website or give us a call today at (905) 332-8809.