What Is a POS System?

Small businesses use POS (point-of-sale) systems to process payments quickly and securely. But POS systems offer a host of other benefits too. Let’s take a look at how POS systems can be used by small businesses to efficiently manage inventory, customer relationships, and sales data.

Point-of-sale (POS) systems are used to handle the customer checkout process in stores, restaurants, and in any other business conducting in-person sales. Most POS systems are located at the checkout counter, but an increasing number of small businesses use mobile POS systems to process payments from a tablet or smartphone.

POS systems consist of both software, like the program or app itself, and hardware, like a touchscreen computer, barcode scanner, and receipt printer.

Modern POS systems are ideal for restaurants, retail stores, salons, and other hospitality businesses, offering a secure, streamlined checkout process. But today’s POS systems do much more than process credit cards. They’re also used to evaluate sales, track inventory, create customer reward programs, and more. These features give small-business owners in practically any industry better control over inventory management, forecasting, customer relations, and sales.

Here are just a few of the many benefits POS systems offer small-business owners:

• A streamlined checkout experience
• Increased efficiency
• Optimized inventory management
• Customer insights
• Increased accuracy (for payment processing, inventory tracking, etc)
• Greater payment flexibility

POS systems run on software that can be hosted in the cloud or installed locally. There are a variety of POS system software options available to small-business owners today, ranging from the free Square POS mobile app to the pricier Revel Systems, known for its well-rounded customer relationship management (CRM) service.

Hardware is another essential component of every POS system. (Even a simple mobile POS system requires at least a smartphone and a card reader). Most POS systems include a touchscreen monitor, along with all of the devices required to scan products and complete payment transactions.

These are some of the most common hardware elements of a POS system:

• Monitor, tablet, or smartphone
• Credit card processor
• Barcode scanner
• Cash register
• Receipt printer

The features of a POS system vary depending on the company providing the service. Some POS systems are more minimalistic, while others provide a host of features to optimize inventory management, CRM, and more.

Here are some of the most helpful POS system features for small-business owners:

• Payment processing
  • Split payments
  • Returns and refunds
• Inventory management
  • Product lookup
  • Quick keys
  • Automatic inventory ordering
  • Inventory counts
• Customer relationship management (CRM)
  • Customer purchase history
  • Loyalty programs
  • Promotions
• Reporting and analytics
  • Employee metrics
  • Stock data
  • Customer reports

There are many intuitive, affordable POS systems for small-business owners. We’ve rounded up some of the best options for easy payment processing, inventory management, customer loyalty programs, and more.

Square POS is one of the best all-around options for small-business owners. It’s free to use, comes with a free mobile reader, and makes it easy to process payments anytime, anywhere.

Shopify is the ideal POS system for retail shops. At just $9 a month, it’s affordable, robust, and highly customizable. The software can even be used for Facebook-only retail businesses, making it a great option for startups.

Compared to the other options on the list, Revel Systems comes with a hefty price tag ($99/month, plus $674 in starting fees). However, no other POS system can compare when it comes to customer relationship management, making it a popular choice for restaurants, bars, and coffee shops.

Small-business owners looking for help with inventory management should turn to Lightspeed, a POS system that comes with product bundling, automated discounts, unit cost tracking, and other powerful tools that make it easy to track and control inventory.

QuickBooks POS system easily integrates with QuickBooks accounting software. It’s a good option for existing QuickBooks users who want a streamlined POS solution.

POS systems are the modern standard for payment processing at retail stores, restaurants, and hospitality-based small businesses. Combining the power of cloud-based software and intuitive hardware, POS systems streamline the checkout experience and make it easier to track inventory and manage customer relationships.

Would you like to learn more about POS Systems? Check out Business.org for The Ultimate Guide to POS Systems.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.