POS System vs Cash Register: What’s The Difference?

Cash registers and POS systems are essential in sales, although they cater to businesses at different stages of growth. Cash registers are excellent for small establishments with limited inventory, while POS systems are designed for scalability. They are best for businesses with growing inventory and plans for store expansions. 

This article explores the difference between the two to help you provide the best recommendation to potential buyers.

POS vs Cash Register Compared

The primary difference between a POS system and a cash register is the scope of its functionalities. While cash registers are easy to use and affordable, their usefulness is limited to checkout processing, cash handling, some inventory tracking, and basic reporting. A POS system offers a wider selection of features for different business types. 

Electronic cash registers (ECR) are best for micro businesses such as mom-and-pop shops or small stores with limited inventory, and only require a single checkout counter. It handles cash payments efficiently and keeps proper records of all transactions that you can retrieve at the end of the day. However, you won’t be able to process non-cash payments or sales on mobile.

Caption: ECRs come in standard button or touchscreen interface.  [Image: BIMI Electronic Cash Registers]

Point-of-Sale (POS) systems are more versatile, so they are the best choice for businesses that require flexibility in their checkout solutions. Unlike ECRs, POS systems offer a mobile setup for those who accept payments away from a checkout counter. However, POS systems require more maintenance. Growing businesses will need to invest in additional hardware and software tools.

Caption: POS systems are versatile to fit most business sizes.  [Image: BIMI POS systems]

Cost

Cost is a primary consideration when choosing between POS systems and cash registers. Below is a quick cost comparison of the two:

Cash Registers

Cash registers are often a one-time purchase, so the upfront cost is the total cost. And because cash registers are stand-alone, they don’t require professional installation. It’s as simple as following the product manual in the packaging. This includes instructions on how to configure dates, taxes, and connect peripherals such as receipt printers, cash registers, and barcode scanners. 

Fully electronic cash registers can be more expensive because they come with features such as touchscreen monitors and computer operating systems. However, they remain a stand-alone unit, which makes ECRs even easier to set up. 

POS Systems

On the other hand, POS systems offer more variety, which, in turn, translates to a wider range of budget options. Both hardware and software can cost anywhere from free to thousands of dollars, depending on your requirements.

For example, upfront cost can be as little as $29 if you choose an app-based POS software. You can install a POS software for free on any compatible iPad or tablet, and invest in a $29 mobile card reader. Some providers like Lightspeed offer an industrial-grade countertop POS system, also at zero upfront cost. Naturally, multi-counter and multi-store business POS systems tend to be more expensive.

Installation and maintenance can be costly for the more complex POS system setups. This may seem like cash registers are cheaper, but the scalability of POS systems offers more value-for-money for businesses with growth plans. 

Features

From the front end, POS systems and cash registers perform similar functions. However, POS systems provide more business features behind the scenes.

Cash Registers

Cash registers are pretty straightforward. The cashier enters the product code either by manual entry, with shortcut buttons, or a barcode scanner. The total cost and sales tax are then automatically computed.  When the payment is complete, the system creates a record of the transaction.

Caption: Cash register workspace

POS Systems

POS systems perform similar functions; however, it also integrates management tools. For instance, product pricing comes within a full inventory management feature. So not only are sellers able to set item prices, but the system also adjusts the stock levels in real-time. Customer profiles are also created (or updated) after every transaction.

Other features available on POS systems include:

Caption: POS system workflow

Implementation

For the most part, cash registers are easier to set up than POS systems, though app-based POS requires minimal steps to implement. The most significant difference is in the upgrade options. 

Cash Registers

Upgrading a cash register usually means purchasing new hardware with better features as a replacement. You can also install an additional system for a new checkout counter; however, transaction records are saved separately. Older models have a built-in cash register, while newer ones are compatible with most standard cash registers and even barcode scanners.  

Electronic cash registers can come with or without software. This means implementation is more flexible, allowing you to keep the hardware even if you upgrade the software. 

POS Systems

With POS systems, businesses with multiple checkout points and multiple location requirements will likely need professional installation. This is because the whole system is interconnected in a network, unlike cash registers. On the upside, you get real-time inventory and sales updates at any time. 

The scalability and customization are also advantages because most POS peripherals are now app-based. Adding tools such as a customer display, barcode scanner, weighing scales, and mobile terminal is easy to do. You can even upgrade your POS software and apply it automatically on all your counters all at once. 

Security

Cash Registers

As a stand-alone, semi-digital system with limited functionalities, cash registers are easier to secure. The hardware can be protected by external alarms, while access to cash within the till can be tracked by assigning unique user codes. These same codes are used to monitor any changes within the software’s transaction records.   

POS Systems

On the other hand, POS systems require different layers of protection to fully secure your business. Similar to cash registers, external alarms protect the hardware, and unique user codes keep track of any changes to the information within the software. Other noteworthy POS system security features include:

• Software access based on user roles
• Transaction data encryption for card sales
• Detailed daily transaction history 
• Network firewall to protect business data
• Machine-learning fraud prevention tools 
• Backup system for internet downtimes

Payment Method Options

One of the most significant differences between POS systems and cash registers is the available payment method options. 

Cash Registers

Cash registers are primarily designed to accept cash payments. That doesn’t mean you can’t accept card payments; however, the card payment terminal is not integrated into the ECR. You will need to manually reconcile card transaction receipts with your ECR’s payment records. You will also need separate platforms to manage your merchant account and sales reports.

POS Systems

POS systems let you integrate your card payment processor so you can manage all sales data within the POS platform. Many POS system providers are also card payment aggregators, which means they help you get approved for a merchant account at the same time. Proceeds from your card sales are automatically tracked in your POS software.

Other forms of payment methods supported by POS systems include:

• Digital wallet payments
• QR code payments
• Digital checks
• Near Field Communications (NFC) payments
• Gift cards
• Government-issued prepaid cards

When To Choose a Cash Register

A cash register is suitable for businesses that:

✔ Only need a reliable means of processing transactions 

✔ Have a small, stable product range 

✔ Have a single location

✔ Have a single sales channel

✔ Primarily accepts cash payments

✔ Have a predictable sales volume

Businesses should only pay for tools that they actually use, and cash registers can record sales efficiently for small/micro businesses. When your inventory levels and pricing structure rarely change, there is no need to invest in complex configurations such as those of POS systems. Tools like role-based access are also not required when the owners man the counter. 

This also points towards a business’s growth plans. A small, stable inventory means there are limited plans for expansion into additional checkout counters, store outlets, or warehouses. Payment options also remain primarily cash, and all sales are made in-person. Businesses that depend heavily on cash flow and run on a budget will find cash registers useful.

How To Choose a Cash Register

If you find your business checks all the boxes of the ideal cash register user, how do you choose? The short answer is to find the option that matches how your business operates. Here is a quick guide to help get you started.

• Assess your transaction volume. A basic cash register is ideal if your daily transactions follow a similar pattern and do not fluctuate significantly throughout the year. Otherwise, choose a more advanced ECR that can handle transaction spikes or complex order flows.
• Consider your product and pricing structure. Basic cash registers are equipped with presets, so it functions well when product and pricing rarely change. If you offer seasonal bundled pricing and discounts, you will need an ECR that can handle simple pricing automations from the back end. 
• Evaluate your staff requirements. Consider who will use the cash register before purchasing one. Cash registers are primarily easy to use, but this can vary depending on the functions included in the system. You might be tempted to purchase an advanced ECR on discount without weighing the consequences of slow checkouts or sales errors due to poor training.
• Also, consider hardware durability. Solid hardware helps cash registers withstand spills, dust, and temperature changes within a store. This means minimizing hardware repairs, peripheral replacements, and other operating costs associated with using your cash register. 

Caption: Full advanced ECR setup in a retail store.  

When To Choose a POS System

POS systems are the better option when your business has a defined and steady growth plan that involves increasing inventory and sales exponentially. This signifies the need for more than just a simple sales, inventory, and payment processing management system. 

As a business grows, it requires an efficient means of operating sales from multiple locations and channels. It will also need an expanded management system for different business concerns, such as:

• Handling large inventory volumes efficiently and minimizing shrinkage
• Monitoring the performance of a growing number of staff assigned to different departments
• Understanding customer behavior from different demographics
• Establishing operational standards and ensuring they are implemented
• Protecting company assets and valuable business data
• Consolidating reports and analyzing different KPIs for sound business planning

In all of this, a POS system that can seamlessly handle all this information is a must-have in order to keep the business’s growth goals. 

Caption: Modern POS system setup in a restaurant setting.  

In some cases, a business starts with a cash register but successfully grows its operations to require more advanced features. It’s best that you know the signs that you need to upgrade to a POS system and prepare for the transition. Your business will benefit more from a POS system if you notice the following:

• Your customer base is growing. You notice there is more foot traffic into your store that converts into sales.
• Customers are asking for alternative payment methods. At checkout, more and more customers ask you if you accept different mobile wallets for payments.
• Your inventory turnover is increasing. This means that you will consider adding more variants to your inventory to keep up with future customer demands.
• Your growth margins all point to a need for a new location. Your sales are up, but have hit a ceiling because of your limited floor space or checkout counters.
• You need more staff to handle checkout. More staff means you have a greater need to track and secure your sales. It also means you require a system to manage staff access and shifts.

If you check one or more boxes of the above, it’s time to consider investing in a POS system.

How To Upgrade From A Cash Register To A POS System

Unfortunately, transitioning from a cash register to a POS system means having to invest in new hardware and software. However, before you do, here is a step-by-step guide to keep your transition organized.

Step 1. Evaluate your business needs. Yes, you know your inventory and sales are growing, but how much? Your inventory and transaction levels can determine the type of POS software subscription you need.

Step 2. List the additional features you require. This will help you narrow down your POS system options. POS systems offer different levels of inventory control. They also provide a wide range of POS hardware setups.  

Step 3. Consider how you intend to expand your sales. Do you plan on selling online or starting a local delivery service? Would you like to accept mobile payments? Make sure you find a POS system that supports all the ways you want to sell AND the types of payments you want to accept. 

Step 4. Canvass and compare POS system options. Create a comparison list of your POS options and choose based on what provides you with the most value for money. Make sure to consider factors such as setup, installation, ease of use, and after-sales support.

Step 5. Create a backup of your sales and inventory records. You will need to transfer all your business information to the POS system database. Most POS systems support bulk upload, so it won’t take much of your time if you have your data saved in the right format.

Step 6. Execute the installation and configure your settings. Some POS systems are self-installed, so they are easy to install on your own. Larger companies will require professional installation. Once done, take a day to go through configuring your settings before you upload your business data. Conduct process testing for all the features, especially sales.

Step 7. Upload your business information. This includes inventory, pricing, historical sales, and customer information. In businesses with multiple employees, staff access and employee information should also be set up. 

Step 8. Conduct user training. This not only includes anyone who will man the checkout counter. The training is required for anyone with some level of access to the POS based on their role in the business. And as a cloud-based system, the training will also include how to safely use the POS and protect it from unauthorized access.

POS System vs Cash Register: Which Is Best?

Whether you need a POS or a cash register, choosing the right system boils down to knowing which matches your business needs. A cash register is a reliable option for small, steady businesses whose operational requirements remain the same. If you value stability over scalability, then this is your best choice.

However, if your business is poised for growth, then scalability in your business operating system should be your main focus. The POS system can expand the cash register features into a unified business management tool. The software is designed to work with growing functionalities, and the hardware is upgraded with advanced peripherals.

The bottom line here is that there is no inferior option for as long as you invest in a system with features that you can make maximum use of. A cash register may make the most sense for many years until your business is ready to grow. Others, though their business is small, may want the mobility that a POS system offers. The right choice is always based on your business strategy.

Need help on how to choose? BIMI has 15 years of experience providing both electronic cash registers and POS systems. Whether you run a small shop or a multi-store company, BIMI’s team of experts can help you choose from options tailored to your business needs. 

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Frequently Asked Questions (FAQs)

What’s the difference between a POS and a cash register?

A cash register is a stand-alone device that can process sales and record transactions. It has limited, optional, but key integrations such as magstripe credit card readers, barcode scanners, basic price settings, and reporting features. It is often purchased as a one-time upfront cost.

A POS offers tools beyond processing and recording sales at the counter. It has software that can perform multiple tasks, such as handling complex inventory, accepting a wide variety of payment methods, and adding hardware options such as customer displays, kitchen display systems, mobile handheld checkout, and more.

What are the advantages and disadvantages of POS?

The biggest advantage of a POS system is its scalability. You can choose from a variety of software, hardware, and payment processing options depending on your current business size. At the same time, it’s also easy to upgrade the system based on your growing needs. The cost ranges from free to thousands of dollars.

One of the major concerns when using a POS system is security. While being cloud-based allows you to seamlessly run a huge, multi-store company from anywhere, this makes POS systems attractive to hackers. The cost of maintaining both hardware and software security, as well as compliance, is an additional operating expense.

What are the 4 types of POS systems?

POS systems can be categorized in many ways, but it’s primarily differentiated based on functionality. So what are the different types of POS Systems?

The modern POS systems we see in most businesses today are the terminals. This replaced the legacy cash registers at checkout counters. The mobile POS is app-based and can run on a compatible iPad or tablet for on-the-go sales.

A self-checkout kiosk is an unmanned POS system. It can scan products, accept payments, update inventory, and create reports. An online POS system runs on an e-commerce platform. It does not require hardware, but it can still allow you to make a sale from customers who can’t physically visit your store.

Is a POS more difficult to use than a cash register?

Maintaining a POS system can be more difficult than a cash register because both the software and hardware require continuous updates and upgrades. Security is also more complex than cash registers because the system is cloud-based. However, to the right business, they offer positive trade-offs.

A POS system creates automation tools that make the checkout process faster and more seamless. Price settings and variations are preset, so the cashier no longer has to rely on memory, a written list, or custom buttons for accurate pricing. So while there may be a learning curve for POS systems, the efficiency it provides is a huge factor to consider.

Are POS systems more expensive than cash registers?

The short answer is no. Like cash registers, POS systems can be inexpensive with the right provider and POS type. Most mobile POS systems can run with a compatible mobile device you already have, so all you need is to purchase a card reader. Others offer industrial-grade solutions at zero cost if you only need one terminal. 

That said, large companies with multiple stores and business management features will have to invest in expensive POS system setups. This costs thousands of dollars beyond what you would spend on most advanced cash registers. Note, however, that cash registers can not support growing businesses the same way POS systems can.

What types of businesses should use a cash register?

Businesses that do not have plans to significantly scale their operations can do well with a cash register. This means your inventory volume is stable, you have no plans of actively building your customer base, or expanding into more than one store or sales channel. You do not need advanced analytics on customer buying preferences to develop a marketing strategy. 

Some concrete examples are small mom-and-pop shops with a predictable list of inventory and foot traffic. Seasonal sellers, such as those who cater to tourists in souvenir stores, are also a prime example. 

Can I accept credit card payments at a cash register?

Most cash registers can only work with cash payments, although there are some that have built-in magstripe card readers. This is where you swipe your customer’s credit card to process the transaction. However, note that adding a card payment method means you will need to apply for a merchant account separately.

This merchant account is what will allow your business to start accepting credit card payments. Unlike cash registers, many POS systems offer this as a built-in feature, meaning once your POS system is set up, you are ready to accept credit card payments, with no extra steps required.

My cash register works fine. Why should I upgrade to a POS system?

Any business that has planned out significant growth in its operation should upgrade to a POS system. If you have been thinking about adding a new physical store, building your customer base, or expanding your sales beyond the storefront, this is the time to upgrade.

A POS system has the ability to function as a one-stop solution for all your business management needs. It also has built-in automations that replace manual day-to-day tasks, such as updating inventory and creating reports that are prone to errors.

What features are in advanced cash registers?

Electronic cash registers are advanced because they come with some business management features. This includes the ability to generate reports, set pricing, and manage basic inventory functions. The hardware is also easier to use, with a touchscreen instead of the preset buttons, card swipe readers instead of cash, and even barcode scanner integrations.

Electronic cash registers are a good trade-off if your business has outgrown the traditional cash register but does not require the complex tools of POS systems.

What are the pros and cons of cash registers?

Cash registers are generally simple and easy to use. They are also mostly inexpensive when you consider that the upfront cost is all you need to invest. Cash registers are also easy to manage. There are no complicated configurations, no business profile requirements, or compliance issues to consider when using the system.

On the other hand, cash registers offer very limited scalability. There are no options to integrate broader inventory management tasks or work with tools that help in growing customers. You also don’t have the option to upgrade your hardware or connect it to other cash registers.