Point of Sale (POS) Software

Point of Sale (POS) software typically allows merchants to process customer payments at retail locations. However, this group of software does more than just handling retail transactions. Other key functionalities of POS software include inventory control, automatic price updating, recording sales by branch and/or by employees and electronic ordering. Some products even allow you to analyze sales data, calculate taxes on buyers and update product information and accounts receivable records. More advanced features include the ability to identify customer buying habits and the ability to track which products are bringing in the most revenue.  Read the full software guide...

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What is Point of Sale (POS) Software?

Point of Sale (POS) software is any digital solution that helps businesses manage their checkout operations at physical locations.

The software assists in the tasks of scanning goods, processing payments, issuing receipts, processing loyalty points, redeeming coupons and keeping a record of the sales.

Checkout operators can also use the software to check the price and availability of products and manage returns and exchanges. On the other hand, store managers often use POS software to keep track of retail transactions and inventory data.

More advanced products calculate taxes on goods and automatically update product information and receivable records. Some products even offer reporting and analytics to help you analyze sales data, monitor customer buying habits, identify the top-selling and slow-moving products, and view sales report by location or employee.

Most products can be integrated with your existing CRM, accounting and inventory management applications to facilitate better decision-making.

Cloud-based POS solutions are growing in popularity because they offer more mobility and flexibility and require lower upfront costs. While these products typically work via the internet, some even allow you to work offline and synchronize data when your internet connection is restored.

Types of point of sales (POS) software

Depending on the type of business they serve, POS software products can be categorized into the following types.

  • Retail POS – This type of software is specially designed to handle retail transactions, which mostly occur at once. These products typically feature a simple and straightforward checkout process to help reduce customer wait times. Other key functionalities include inventory tracking, returns processing and sales reporting. Most products also have the ability to collect and store customer data, process coupons and discounts and accept split payments. More advanced retail POS solutions help implement an automated purchasing system, so you can quickly order the items running out of your stock, from a pre-approved vendor.
  • Hospitality POS – This type of POS software comes with a different set of features to suit the specific needs of hotels, restaurants or other hospitality businesses. In a restaurant, for instance, orders are not closed immediately. This means the POS software should have the ability to hold tabs open for customers until they are ready to pay. The software also allows you to add items to an open order as and when the customer orders more foods. Most products automate the process of sending orders to the kitchen, which helps avoid manual errors during order passing and improves turnaround time. Other important features include the ability to automate table bookings and reservations, manage seating arrangements, track inventory and generate sales report by date, time and item.
  • Mobile POS – While mobile POS solutions serve companies across industries, they are more useful for businesses that often conduct sales at remote locations. For instance, some companies sell their products or services at trade shows and business events. Mobile POS software allows them to process payments from their mobile device, such as, an iPad. They can also track inventory and view sales data from the remote location.
  • Saloon POS – Salons, massage parlors, spas, fitness centers and similar businesses often look for a POS solution that can also help them manage appointments. Designed specifically for buyers like these, salon POS software often packs in the basic calendaring and appointment scheduling features, in addition to the regular POS features, such as, payment processing and inventory tracking.

How to Choose POS Software for Your Business

The first thing to consider when choosing POS software for your business is what type of buyer you are. If you run a small retail store, you’ll need a simple product with the payment processing and inventory tracking functionality. Products designed for single store owners often also come with integrated CRM and accounting modules to help them manage everything from a single system.

On the other hand, large companies need a fully-featured software suite that does more than just handling retail transactions. For instance, a multi-location retailer may look for a product that allows them to view sales report for each store, create a single purchase order for all locations and track item transfers between stores. Some products even allow managers to set a custom price for products. That means you can sell the same product at different prices in different locations.

If you are looking for hospitality POS software, consider choosing features based on how your business conducts its everyday transactions. For instance, a quick service restaurant may need POS software capable of handling drive-through orders, while table-service restaurants may need a product capable of creating custom menus, handling open checks, managing table reservations and tracking inventory.

Conversely, POS software for bars often includes the age-verification functionality to help you avoid penalties due to underage service. Some bar-focused products can be connected to your pour spouts to make sure bartenders are not over pouring drinks and driving up your costs.

Products focused on other business types are also available. For instance, field service providers can find a POS solution that also offers the GPS tracking feature. POS software for pharmacies often helps comply with FDA regulations, while POS software shoe stores may offer color, size and style matrices, so you can create a custom attribute set for each item.

You should also consider some generic factors, regardless of the type of POS software you need. Here are some questions to ask.

Is the software user-friendly? – Some products present a steep learning curve to your team, while some offer a simple user interface.

What platforms does it support? –Some products support Android, iOS and web-based platforms, while some support only one or two of them.

Does it offer an open API? – POS software with an open API can be easily integrated with your other applications. Consider whether you need this.

Is the product scalable?– If your business is growing fast, consider choosing a product that will grow with you.

Does the vendor offer guides and customer support? – You may also want to check if the vendor offers phone support, chat support, FAQs and guides.

Common Features of Point of Sale (POS)

2-Factor Authentication Adds an additional layer of security by requiring an extra step in the login process. Usually external devices are required for this or a text message with a verification code is sent to the user when trying to login.
API Application Programming Interfaces (APIs) are programmatic intersections with external products or platforms that allow for custom integrations with your own solutions or other solutions you are using.
BitCoin BitCoin support - a digital currency operating independently of a central bank.
Budgeting Planning and tracking capabilities for financial budgets and plans often used to manage funds across different departments or for investor / shareholder oversight.
Contact Management Manage large amounts of personal or business contacts in a centralized system.
Customer Management Manage customer databases and/or track outstanding shipments, payments and more.
Dashboard Dashboards are digital interfaces commonly used to visualise data or give quick access to important features and functions of online platforms. They often serve as an overview gateway in software applications.
Data Export Exporting functionality can be used to streamline the migration of data sets and information across systems, platforms or applications.
Data Import Importing functionality allows you to use data sets from other systems or platforms to cut down on data entry requirements or to more easily migrate records from similar applications you have used in the past.
Data Visualization Data visualization features render a visual interpretation of data sets through the use of charts, infographics and other visual cues generally in form of a reporting dashboard.
External Integrations Integrations with other software products or platforms to improve efficiency and compatibility across systems.
Forecasting Forecast upcoming expenses, sales, revenue, user levels, etc. through the use of predictive methods and past data.
Inventory Tracking Stay on top of inventory levels, to manage the storing, reordering or production of stock items.
Multi-Currency Support of different currencies for payments, accounting purposes, taxes, reports and more.
Multi-User Supports more than just one user account and generally allows for collaboration with colleagues.
Notifications Includes notification support and sends you alerts with information on important events and other time sensitive instances. For example through push notifications on mobile phones or email notifications.
Payment Processor Integration with external payment processors like PayPal, Master or Visa, generally for credit cards and similar methods.
Supplier Management Manage suppliers and purchases required in the day-to-day operation of a business.
Third-Party Plugins/Add-Ons Offers additional features or integrations built by third-party developers in form of plugins or add-ons.

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