What is a point-of-sale system?
A point-of-sale, or POS, system is the hardware and software that allows a business to process customer payments for products and services. Specifically, point-of-sale refers to the physical place where the transaction happens.
Traditionally, POS systems were physical cash registers that accepted only cash, checks, and credit cards. The term also includes receipt printers, cash drawers, barcode scanners, and other devices.
Modern mobile point-of-sale (mPOS) software and credit card readers let businesses use mobile devices, like iPads, to process customer payments from almost anywhere. And many POS systems are capable of accepting almost any type of payment, including contactless payments like Apple Pay and Google Pay.
POS systems now do more than just process payments. Many products, including the ones we have reviewed here, serve as essential business hubs that handle everything from inventory, customer, and employee management to accounting, payroll, and shipping services.
What are common features of a POS system?
Modern POS systems include a variety of features that help you manage your day-to-day business operations. Features vary by product, but here are some of the most common POS system features:
- Payment processing: This is the hardware and software required to accept customer payments. Your POS system may include terminals, credit card readers, barcode scanners, cash drawers, and online ecommerce platforms.
- Accounting and payroll: Your POS system may include accounting services or integrate with third-party software like QuickBooks. Manage your costs, revenues, invoices, and payroll to keep track of your business and find opportunities to improve profits.
- Inventory management: Many POS systems help you keep track of your product inventory, allowing you to enter specific details about each item you sell and track your product receiving, sales, and shipping.
- Employee management: Employees can clock in, process payments, and enter product and customer information with these features. And you can track staff schedules, productivity, sales activity, and more.
- Reporting and analytics: Gain valuable insights into your business with reporting and analytic features. Dashboards give you a bird’s-eye look at important information, including sales, inventory, and revenue data. Or dive into the details with sales summaries and historical comparisons with more advanced, real-time reporting features.
- Customer relationship management (CRM): CRM features let you store information about customers to understand them better. Manage customer loyalty programs, offer discounts and gift cards, or create promotional campaigns to turn one-time customers into advocates for your business.
How to choose the right POS system for your business
If you’re setting up your first POS system or considering switching to a new product, ask yourself the following questions to help make your decision.
Is the POS system built for my type of business?
Many POS systems are tailor-made and marketed to specific types of businesses, especially full-service restaurants or retail. For example, TouchBistro built its system around food and beverage businesses like quick-service restaurants, bars, and coffee shops. This POS system has powerful tools for quickly taking orders in the front of the house and keeping up with the hectic operations and inventory needs in the back.
In contrast, VendHQ and Flint mostly target small businesses in the service industry, like contractors, designers, and trainers. These businesses should look for features like invoicing, ecommerce, and CRM.
What’s more, if you manage multiple employees, you’ll want a POS solution to help you. Many systems let you individually track employee details, shifts, payroll, and more and then send that data to accounting software. Anything that helps you streamline staff management—and potentially lower labor costs—is a plus.
Weigh the costs of setting up a new POS system against the included features. Some options offer free or low-price subscription plans with scaled-down functionality. These can be great for newer, smaller businesses just getting started.
How will I need to accept payments?
Traditional POS or mPOS? That is the question. Consider how you or your staff will be taking payments from your customers. Will patrons come to you at a counter or cash register? If so, a traditional, stationary POS system may make sense.
But if you need to take payments on the go—from customers wandering around the floor or coming up to a roving truck—you’ll need a mobile POS and card reader system that accepts payments. Fortunately, most modern POS systems either include their own mPOS technology or work with existing products you can buy. Square Point of Sale, our pick for best overall POS system, has an excellent all-in-one solution for taking payments through stationary or mobile devices.
Also, make sure you know what hardware and software works with brands you’re considering. Some POS systems are built just for Android devices while others work with only Apple’s iPad. If you have existing hardware, you may want to choose a POS system that works with what you already have.
Do I need to manage a large inventory?
Some less expensive POS systems and plans are built primarily for payment processing. But what if you’re running a restaurant or retail business with hundreds of products, ingredients, or parts to keep track of? In that case, you’ll want to consider a POS system that includes or integrates with a robust inventory control system.
How much reporting and analytic information do I need?
For newer, smaller businesses, you may not need advanced and expensive POS system reporting features. But if you’re looking for deeper insights into details like profits, labor costs, and historical comparisons, look for retail POS systems that offer advanced real-time reporting.