fbpx

What Is a POS System? (+Important POS Features and Benefits)

Restaurants

What Is a POS System? (+Important POS Features and Benefits)

November 26, 2019

small-business-pos

When opening a business, everyone has different goals and objectives with what they hope to accomplish through that business. 

One objective that is imperative to keep the business afloat to achieve all the other goals is making money. However, making money includes a lot more than just having a good sales team – it requires a systematic approach to monitor all sales and keep track of inventory and customer management to ensure more sales in the future to customers who will have a happy experience with your brand.

When opening a business, everyone has different goals and objectives with what they hope to accomplish through that business. 

One objective that is imperative to keep the business afloat to achieve all the other goals is making money. However, making money includes a lot more than just having a good sales team – it requires a systematic approach to monitor all sales and keep track of inventory and customer management to ensure more sales in the future to customers who will have a happy experience with your brand.

What is a Point of Sale?

First thing’s first, POS stands for point of sale. Point of sale is the interaction when and where a transaction occurs between a business and a customer. This is where the brand calculates how much is owed from the customers and the customer chooses a payment method.

This is also often the moment when inventory on the item purchased officially changes and customers are asked for feedback. 

Now that you know what a point of sale is, it’s time to understand what a POS system is.

pos-system-definition

What is a Point of Sale (POS) System?

A point of sale is the moment when a customer makes a purchase, changing the profits and inventory for the vendor and influencing the customer’s relationship with the brand; a POS system is the operation through which that transaction is completed.

Simply put, a POS system is a central hub where businesses can easily operate and monitor sales and store data collected from each transaction to improve and manage business better for future transactions. This includes tracking inventory, collecting data for financial reports, and keeping track of customer information. 

POS Cloud Software vs. Hardware

A POS system is created through the combination of a POS software and POS hardware. 

The software allows businesses to complete purchases and keep track of sales data – which can be done through cloud-based or local server-based technology. 

The hardware is the physical ingredients needed to integrate a full-functioning POS system. Some hardware needed for full integration includes credit card readers, receipt printers, cash drawers, and barcode scanners. It is important to note that this list varies with different inclusions depending on the business’ industry, wants, needs, and budget.

POS Systems for Every Industry

Not sure if a POS system is the right move for your brand or even industry? Luckily, a POS system can be helpful in a variety of business establishments.

Most all popular hospitality industries have POS Systems that are built specifically for their industry, including:

POS System Features and Benefits

A POS system is the operation through which a sales transaction is completed. In order to complete all those sales transactions, there are specific functions that POS systems include. 

Below outlines some of the key functions of a POS system and how they can help improve business. 

1. Processing Sales 

As POS stands for point of sale, it’s a no brainer that a POS system has to include a way to process sales transactions. This includes handling various forms of payment, such as credit cards, debit cards, cash, checks, Apple Pay, and any other form of payment you intend on accepting. 

Not only should a POS system be able to process various payment methods, it should also have features that add taxes, calculate final payments or split payments, and formulate receipts.

Additional, POS systems act as both an in-store ordering and online ordering system.

How This Benefits You

A POS system makes payment transactions work smoother and, because they allow for the collection of data from multiple transactions simultaneously and record all financial data, they are great at spotting suspicious activity quickly. Additionally, POS systems offer secure locations to store confidential information, such as credit card numbers. 

2. Inventory Management

A vast majority of POS systems include inventory management functions that monitors items and their stocks for you – rather than you needing to count inventory manually or pay for separate inventory management system. This is an easy way to keep track of all items entering and leaving your business, providing a much smoother method of monitoring inventory numbers. 

Benefits

In order to make sales, your business has to have inventory in stock that your customers want to buy. Being able to track inventory reduces errors from online purchases such as clothing items or booking hotel rooms and food or beverage purchases in restaurants, creating an easier sales process for both you and your customers, creating a better transaction experience for the customer. 

3. Customer Relationship Management

Without repeat customers, it’s nearly impossible for a business to succeed in the long term. To keep customers coming back, it’s vital to have a customer management system in place to keep track of their needs, spending history and patterns, and even offer loyalty reward programs and monitor how many points away each customer is from that $5 off reward. 

Benefits

One of the biggest benefits a POS system offers is the ability to gain a 360-view of customers, allowing your brand to better target and retarget customers with personalized marketing and experiences, growing your brand’s sales and a customer’s lifetime value with your brand. 

4. Staff Management

Similar to the importance of managing customers, staff management is imperative to ensure those who are on your business’ team are playing for the team and doing the job they are getting paid for. This includes tracking staff performance and checking cash drawer numbers in order to improve performance and increase sales. 

Benefits

POS systems are great for tracking staff performance, but they also help staff perform better in the first place with their simplicity. POS systems create easier user experiences for employees who use the system, whether cashier, inventory managers, data analysts, and on. With the POS system operating under one network, it helps integrate all the sectors in a business – and when all the sectors of a business are integrated and working smoothly with one-another, business often improves. 

5. Reporting

In order to improve business, previous business reports must be analyzed to help pinpoint where numbers may be slacking or what areas of improvement need to be made to increase sales. With a POS system tracking and managing all sales, staff, customer, inventory, and restaurant accounting, the system is in the perfect position to create routine reports to help improve your business in the future. 

Benefits

Reporting is beneficial to any organization; specifically with a POS system, reports can be built quickly and with minimal errors, helping businesses prevent fraud or loss, optimize supply chain management through inventory tracking and customer management trends, and minimize waste.

Questions to Ask When Choosing a POS System

While most POS systems offer all the above functions and benefits, there are a variety of POS systems to choose from depending on your industry needs and your brand’s wants and budget. 

Some questions to find answers to before committing to a POS system are:

  • Is it an all-in-one POS system, or will the hardwares and softwares need to be installed and synced separately? 
  • Is the system user-friendly for my staff to quickly get the hang of?
  • Does it use cloud-based or local server-based technology? 
  • What is the cost of the POS system, and are there any hidden fees?
  • Does it offer mobile features and capabilities and/or support multiple locations?
  • Does it offer a free trial, allowing me to test the POS system before fully committing and implementing it into my business?

Implementing POS Software

A POS system can be a great advantage when chosen and used correctly for your brand. 

POS systems can be seen in businesses of all types around the world today – consider the last time you got a haircut, did the salon know who you saw last time? How about when the pizza guy already knows your address for delivery just from the phone number you called to order from? It’s likely you benefit from a POS system every day without even noticing it. 

POS systems create smoother sales transactions in day-to-day purchases, making life easier for business and customers alike. If you’re looking to make the switch and integrate a POS system into your business, start asking the questions mentioned above and searching for the right POS system for your brand within your industry.

Multiply your delivery orders by joining the 2ndKitchen restaurant network, and start serve your food in local bars, breweries, hotels, and residential buildings. It’s free!

Join the conversation with thousands of customers and partners talking about the future of food service.

  • brewery-business-plan

    How to Make a Brewery Business Plan (+Free Template)

    Whether you’ve a seasoned entrepreneur or it’s your first step into the business world, the key to success for any brewery is creating (and following) a business plan. A brewery business plan is your roadmap to ensure you’re targeting the right audience and market, and keeping your business operations and financials in check. It’s a living document, providing the skeleton […]

Serve Food. Today.

Get Started. It's Free!