Point Of Sale System Basics for Retailers

Scott Coburn

Running a business has its challenges, and for entrepreneurs, choosing a Point of Sale system that meets all their daily business needs can be one of the most difficult decisions to make. Over the last few years, the culture has migrated away from old fashioned cash registers and adopted a new, highly-functioning computer technology known as a Point of Sale (POS) system. These systems have so much more to offer than just ringing up sales, and can perform a variety of inventory and customer management tasks.  

Similar to a conventional cash register, POS systems come prepared with a cash drawer, receipt printer, barcode scanner and credit card reader. Some vendors sell these systems pre-configured to your exact requirements, or you can add on to the system as your needs change with the growth of your business.

The Benefit of Inventory Management

One of the best advantages of a POS system is the ability to receive real-time, up-to-the-minute, assessments of your inventory. Every time a customer checks out at your POS, the purchased goods are immediately subtracted from your inventory list, which is maintained on the system’s hard drive.

Many business owners have to keep track of huge lists of inventory, often keeping track of SKUs numbering in the thousands, with the number of actual goods exceeding 10,000 items. Staying on top of the coming and going of thousands of items can be extremely tasking, not to mention the frustration when your numbers seem a little off.

A good point of sale system can help with this process tremendously. Most systems allow you to program an alert that notifies you when an item has reached the re-order point. When it’s time to re-order, some POS systems keep you informed of the most recent price you paid for that item, as well as the average price you’ve paid on previous orders. These numbers can help you manage the best deals with your suppliers. Once you’ve closed up shop, you can run a report that shows your inventory activity for the day, week, month and sometimes annually. This gives you the opportunity to compare current orders with those from the past, keeping you well prepared for the coming months.

Tracking inventory can be a time-killer for business owners who don’t have a lot of time to spare. But It is also one of the most necessary tasks in order to keep your business running smoothly. Having too much stock, or too little, can cost you a lot of money. As stated by the National Retail Federation, U.S. retailers lose $224 billion due to excess inventory and $45 billion from not having inventory in stock. Even though a POS system does not substitute for a physical inventory count, many business owners find that keeping track of inventory through their POS can reduce the amount of time each year spent on such a time-consuming task. The use of a wireless portable scanner in addition to a point of sale system can greatly reduce the amount of hours and work you have to put into the process.

Aside from tracking inventory, the right POS system can help you understand who your loyal customers are and what they like. The customer’s purchase history is visible a the point of check out, which means you can customize your conversation around specials or new products they might find interesting.

Shopping for the Right POS System

For your business, the POS system is so much more than just the place where transactions take place. The right equipment and software will become your management hub, the place that will help you monitor, track and take your business to the next level.

When shopping for a POS system, there are so many choices and the price can range anywhere from hundreds to tens of thousands of dollars, making your decision even more difficult. Here are a few helpful tips to guide you in the process of selecting a point-of-sale system:

Inventory Is Everything

All POS systems complete transactions and are capable of tracking inventory. But the best ones will provide the information easily and thoroughly, allowing you to set alerts for when items are running low, readily add new products, account for back-orders, and generate purchase orders for your vendors.

Don’t Sacrifice Ease-Of-Use For Functionality

Across the board, complex orders require additional features in a POS system. But functionality becomes a burden when ease-of-use is sacrificed, so consider the amount of time needed to train new employees on the new system, and choose a POS that meets in the middle.

Start Small and Grow From There

There are a lot of expenses involved with running a business, and upgrading your POS system may not be at the top of your list. If you find yourself on a slim budget, start with a basic setup and add on to the system as your needs increase. Maybe start with a barcode scanner and credit card reader, then look into adding an inventory tag printer, pole display, or PIN debit pad. Pick a system that’s best for your current situation and can adapt as you grow.

Choosing a POS system on top of your long list of tasks can seem like a chore. But with the right mind-set and a little research, you can choose the solution that not only makes daily life a lot easier, but can set you up for greater success in the long run.

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