A point of sale (POS) system is a combination of software knitted together into a hardware system that allows for the execution of transactions as well as payment of products offered and services rendered. It also plays a key role in the simplification of the business’s day to day operations such as tracking sales and cash flow or tracking inventory. Started primarily as billing software, it has over the years morphed into a system that automates most business tasks such as payment processing with particular emphasis on credit card processing. But how does it work and why is it important that your business considers investing in one?
Components of the System
Ideally, a point of sale system is made up of basic hardware and software components meant to help it execute its processes. The hardware components include the monitor, receipt printer, and a reader for credit card processing. You then add the software that allows for the collaboration of these components. So, how does a point of sale system work?
1. Tracking Sales
One of the greatest strengths of the point of sale systems in any organization lies in its ability to track and harmonize billing across all departments. They are also generally equipped with comprehensive reporting tools that capture every aspect of accounting necessary to help your company view business operations performance and make important decisions. Advanced systems have also incorporated several payment processing tools.
2. Tracking Inventory
The point of sale system will also track your company’s inventory from purchase to sale. It simplifies the process by keeping track of your inventory and ensuring that you maintain balanced inventory levels while providing the relevant departments with regular updates.
Why Do You Need a POS System?
So, why does your business need a POS system? Here are some of the reasons to consider investing in one:
1. It Automates Most Business Processes
A point of sale system automates many aspects of your business operations and thus saves you time. For instance, it speeds up the check out process and the inventory management process as well as payroll processing given there is no need to dig through numerous receipts.
2. Keeps You Aware of Your Business Performance
Through the generation of instant reports, the business owner is able to determine the performance of their business in real time. For instance, you don’t need to go through the numerous store records to determine the inventory in stock, nor do you need numerous records from different systems and team members to determine the liquidity of the business. The system gives you a direct access to these reports in real time, whether you are in the office or connecting via the cloud.
3. Reduces Incidences of Theft and Misuse
The traditional manual payment processing systems were prone to several inefficiencies and riddled with numerous loopholes. This created room for manipulation of records that led to numerous accounting errors such as misuse of cash collected and misreporting as well as outright theft by employees. By harmonizing the sales and cash collection points, the POS system eliminates these incidences.
4. Saves You Money
The numerous inefficiencies of the traditional payment system demand that you put in place several countermeasures if you hope to eliminate accounting errors and misuse of resources. This includes separation of services such as having different attendants disburse products and collect cash, which brings down the quality of service and makes the sales process tedious.
It is also expensive given the duplicity of roles by different individuals. A POS system helps you avoid this and cut down on expenditures by including all the necessary checks and balances within the system to prevent fraud while eliminating the need for multiple employees serving the same role.
You need a point of sale system for your organization if you hope to streamline its sales, accounting and inventory management departments. More importantly, you need it if you hope to incorporate such payment options as credit card processing, reduce the incidence of fraud in cash handling, save money and keep you up to date with the performance of the business.
If you are in the market for a POS system, please call us or fill out the form on our website to connect with one of our payment specialists. We would be delighted to show you the benefits of the POS System that we offer.