POS or Point Of Sale is the place where the sales transaction takes place, most commonly a checkout counter. Hence, it doesn’t matter if you own a clothing store or a restaurant, a POS is an integral part of your store because that’s where the profit is made. POS systems use software and hardware specifically suited for this use. They function simultaneously for handling the entire business transaction which makes it user-friendly and hassle-free.
What is POS?
In simple terms, POS is the place where the exchange of products and money takes place. But, in a modern day scenario, this is not enough. So, an ideal POS system keeps track of the sales and automatically updates the shop’s inventory as and when a sales transaction takes place. This information can be used to decide when and which products should be restocked and can also be used to check the progress of the current marketing strategies.
A POS System
Functions of POS
The most essential job of any shop is to sell products. To do this, a well-maintained record of the inventory is required so that you know which items are popular and when to restock them. This record also helps to avoid understocking or overstocking of items. A POS system keeps track of all the sales leaving no room for any transaction being overlooked since the process is automated.
A point of sale system also maintains the inventory by automatically subtracting the number when each item is sold or increasing the number when an item is returned. Some POS systems even alert the owner when the stock is running low.
Since the POS system tracks the purchases of the customers, it can identify their unique shopping behaviors. This lets the system offer specific suggestions for the customers and also group them into different reward programs based on the tally of their previous purchases. A POS system also generates sales reports based on which marketing and sales strategies can be planned.
Necessities of Point of sale system
A POS system is necessary for any business irrespective of its size and industry. Medium and small businesses can use computerized sales systems to achieve higher sales performance and can provide service to more customers in the same time-frame. Increasing the use of automatic inventory systems will eliminate the need to do a manual inventory report. In a busy store, this leads to faster and a more efficient way of billing.
In addition to all these reasons and more, POS systems are used in large scale businesses. In an everyday scenario, these businesses deal with large monetary values in transactions. So it’s imperative to know what products the customers are buying and when. Employees can do a better job if they use an automatic inventory, as they don’t have to be worried about manual errors. Customer service and transactions are much faster and efficient by using computerized billing.
In some cases, a business can operate without a POS system. But, it will put a huge strain on the employees. There’s always a risk of miscalculation due to human error and a lot of these errors will affect the profit. With the ease, quickness, and flexibility of automated POS systems, an increase in the profit of any business is practically confirmed. However, for ecommerce businesses, a point of sale system is a necessity and not an option.
It’s extremely important that you consider the nature of your business before you choose a POS system. For example, a POS system for a restaurant is very different from a POS system for a retail store. Apart from that, different POS systems offer different features. Choose a POS system with features that would benefit your business the most. You will usually find a comprehensive list of all the features that come with a POS system online. Go through it an identify the one that would suit your needs the best.
A hardware-based POS is expensive and it’s not possible to return if it doesn’t suit your store. A poorly suited POS system will do more harm than good and in a worst case scenario, may also lead to a loss. A better and a more cost-effective option would be opting for cloud-based POS system. It’s based on monthly plans and you can cancel it whenever you want. Shopify offers one such software which is one of the most popular POS systems. You can manage multiple stores from a single device and all it requires is an internet connection. A trial version is also available so you can try out the software and if it suits you, you can buy it.