How does POS software work?
Retail operations have been streamlined by the introduction – and subsequent development of – Point of Sale software. Everything from basic customer billing to employee management can be attended to by modern POS systems. Here’s what you need to know.
Understanding POS Systems
Basically, the POS system is what retailers will use to conduct sales, although the number of POS features and functionality will vary greatly, depending on the business size and requirements. The POS is typically a cash register, computer or tablet, used to conduct a financial transaction, while also communicating inventory information as well.
– How the POS system started
The simple cash register was the original POS system whereby the operator manually inputs the price of items, cash was placed in a drawer, and a receipt handed over. While some retailers do still use this basic POS system, modern demands – credit cards and internet banking – have prompted the evolution of this valuable system, making it much more central to financial tracking and inventory management. Often it’s worth considering a POS upgrade for more effective business operations.
POS system components
To get a better understanding of how the POS system works, here’s a look at the two basic components found in each one.
These are the physical components that make up the POS system. Typically, these will include:
- Monitor – This can be a computer monitor or tablet that displays all the relevant retail information, enabling all functions.
- Barcode scanner – The product information is read off the barcode using the scanner, integrating with inventory management systems to adjust stock levels where necessary.
- Printer – This will print receipts to hand over to the customer.
- Card reader – This will scan loyalty cards and can be used for all card-related payments.
- Cash drawer – This opens at the conclusion of transactions and can be used to store money or for cashback options.
POS software types
The second component of the POS system is the software, which is available in two main types. These include:
1. On-premise POS software
This is where the software is stored locally on a closed-computer network and does not require internet access to be run. This is beneficial in remote locations where internet access can be temperamental or non-existent.
2. Cloud-based POS software
This is an internet-based software system where the data is stored on the POS provider’s internet servers. This allows for flexibility as you’re able to access the information from any computer browser. The cloud-based system is also referred to as a software-as-a-service (SaaS).
3. Hybrid software
There is actually a third option that combines both on-premise and cloud-based POS software into a hybrid.
Learn how to use POS software
With a reliable POS software provider, you will get thorough training in the system so that you can integrate the features into everyday business. To get an understanding of the POS software and what you can expect to learn, here’s an overview of some key features.
– Billing and order processing: This is where a product is scanned or bills are ordered, generating an invoice that can be produced for the customer. Certain details such as customer and sales person’s name could be included here.
– Sales’ monitoring and reports: Every sale must be processed and stored to give an accurate overview of sales by hour, day, week, or month. The POS system will also generate a report of sales, allowing business owners insights into sales’ trends and staff performance.
– Inventory management: Tracking inventory is vital for successful business operations, and the modern POS system provides real-time inventory management to ensure accountability. This will include stock adjustment and the reasoning behind any changes.
– Refunds and replacements: If for whatever reasons, a customer wishes to exchange or return an item, a POS system will have the capacity to facilitate this process, capturing relevant details such as the individual returning an item and the reason for the return.
– Staff management: Transactions and the stored data can assist retailers in tracking employee performance, while sales’ reports can assist in managing staff hours.
– Customer experience: Sales’ transactions can also be used to track the customer’s details and preferences, allowing you to hone marketing techniques that are tailored to the individual. Some of the ways this can be done are tracking customer loyalty cards and offering selected gift cards to regulars.
Benefits of POS software
The point of sale system is a necessity for many retailers, but determining the type of POS software for your particular needs will require some input from leading suppliers. By implementing the correct POS software, your business is likely to benefit in a number of ways. Some of the more notable improvements include:
- Increased efficiency – With better tools for the job, you’ll notice streamlining of processes and fewer operational errors.
- Improved accuracy – By eliminating manual inventory control, you’re benefitting from real-time, accurate data.
- Better forecasting – The ongoing sales’ reports will give you a complete overview of operations, allowing you to better plan for future business growth.
Just make sure you get the most out of your POS software by working with a reputable supplier, preferably specialising in your particular industry.