Aside from processing daily transactions at a checkout counter, a POS system serves as a central platform for managing business operations. It is equipped with various tools to track and control inventory, staff movement, sales information, customer relationships, and more. Others come with industry-specific features to perform advanced tasks.
If you’re a reseller, this article gives you everything you need to show your customers why they need a POS system.
Core POS Functions
Businesses, regardless of the type, use the POS system for the following:
Processing Transactions
This is the primary customer-facing function of a POS system, replacing cash registers. It eliminates the manual task of entering product cost and recording a sale. The POS lets you scan products to ring in the price, compute the tax, and display the total transaction amount. It then lets you enter the payment information, which then completes the sale.
Accept Multiple Payment Methods
A POS system is equipped to accept cash and non-cash payments. It includes modern-day options such as mobile wallets and near field communication (NFC) methods. What’s interesting is that a POS can have a card payment service integrated into the system. This means you don’t have to keep track of card sales separately, so transaction recording is simpler.
Some POS systems even have a customer display that helps with payment processing. It lets your customer interact with the touchscreen computer, and they can choose how they want to pay and even capture their signature when needed.
Caption: All-in-one Android POS terminal in a cake shop (Image: Bimi touch screen POS system)
Maintain and Update Customer Profiles
POS systems can keep more detailed sales records. Aside from the product and total transaction cost, it can also build a customer profile for every new sale or update a customer profile for repeat transactions. Your POS system records customer name, billing address, payment type, and the last four digits of their card (if applicable).
This is one of the features that make a POS system unique. The customer relationship management function that builds your customer profiles provides crucial information to create a business strategy. You get to understand what each customer often buys, which brands they prefer, and even what type of promotion they are more attracted to.
Process Refunds and Void Transactions
With a bar code scanner, your POS system can immediately identify an item that’s already been sold. So whether your customer would like to refund or void a transaction for one item or an entire purchase, the process is completed with a few clicks from the counter. The POS system also automatically adjusts the inventory levels in real time and updates your customer records.
And because POS systems are in a cloud network, large, multi-location companies can give their customers the freedom to return items in any of their outlets. The barcode scanner will recognize the item and process the refund right away.
Automate Cash Tracking
The end-of-day cash tracking can be a stressful task if everything is done manually. A POS system is equipped to automate some of the steps, to help cashiers complete the process fast and without errors. It automatically keeps a record of all the cash that goes in and out during the day, as well as tracks the card payments, so you only need one reconciliation report for both.
The POS system can display all the transaction information in detail, from the moment the register is opened until it’s closed. This includes transaction totals, payment type, reference numbers, and even cashier ID. All that’s left to do is count the cash and go over the card receipts to reconcile the balances.
Set Product Pricing
Another helpful tool in a POS system is the automated product pricing. Once you’ve uploaded your inventory data, you can set the price for each product type. And if you run multiple stores, you only need to set the pricing once from your computer. Running promotions can be done simultaneously without a complicated setup from the back end.
Manage Inventory and Stock Levels
All POS systems come with a built-in inventory management tool. The level of control depends on the software plan you have, but essentially, it makes tracking and updating much easier. It shows you in real-time which products are selling quickly and alerts you when you’re about to run out.
This is especially useful if you have multiple stores or maintain warehouses. However, smaller businesses can also benefit from using a POS system to set stock alerts, generate reports, and even create forecasts to plan their inventory budget for the year.
Caption: Two displays POS system in a supermarket (Image: Bimi dual screen pos system)
Manage Staff Permissions and Performance
You should be able to monitor anyone with access to your cash register. POS systems help with this with a PIN-based user feature, so cashiers are required to enter their unique ID for every transaction. You can also set different levels of access based on the PIN ID, so only authorized personnel can make changes to sensitive information.
A POS system can also keep detailed records of your staff’s performance. It can show you who makes the most sales and who requires more training. Some even come with a built-in time-in and time-out system and can be connected to a payroll software.
Generate Reports and Business Analytics
You can use your POS system to generate various types of business reports. It can support everything from sales, inventory, to staff performance, depending on your software plan. The reporting function can be filtered to highlight different data points and generate tables for better visualization.
A POS system can also generate an analysis of your customers’ product and payment preferences. This is critical from a marketing perspective, where you can use this information to create customized discounts and promotions. You can plan your strategy for increasing foot traffic during peak selling season and invest only in the most popular products.
Integrate With Other Business Systems
Imagine not having to open your accounting, marketing, and payroll software separately just to run a task. This is what POS systems can do when we say they can seamlessly run your business.
Most POS systems are compatible with popular business software, so you can use them to integrate these functions.
This means you can pull accounting, marketing, and staff performance information directly from the POS database. The direct access eliminates the risk of manual errors, and any adjustment to the raw data is updated in real-time.
Retail-Specific Functions
Niche retailers often require complex inventory management tools that make POS systems highly useful.
Caption: Single-screen POS machine in a retail shop (Image: Bimi Android POS system)
Track Special Work And Warranty
You can use a POS system to manage specialized work. Retailers that offer customized products require inventory tools that can track a wide selection of raw parts. It also needs to track customer work specifications and deadlines. Additionally, each completed job comes with a warranty that also requires a tracking feature.
Instead of manually tracking all this information, the POS system can do the heavy lifting. All you need is to correctly input inventory and transaction data to keep the records reliable.
Manage Rentals and Product Repairs
If you rent out a specific product, you need a POS system that can track both your customers and your rentals. This includes a system to assess the rented items and set item charges in case of any damage or late returns. You can also use your POS to keep track of spare parts for products that need repairs or upgrades, which is unique to this business model.
Track Raw Materials
Tracking raw materials is unique to manufacturers because they use up and replenish these items in bulk. You can use a POS system to efficiently track large volumes of raw materials. This helps make sure that you never run out of supplies that can delay production. It also helps prevent overspending on materials that you don’t need.
Most POS systems that support manufacturing also integrate supplier information so you can automate your reorder process. This can be done by setting up a low-stock alert that will automatically generate a sales order invoice with details of the low-stocked item, ready for you to send out.
Expiry Tracking
POS systems can also be used to track expiry dates for products with a limited shelf life. You can configure the inventory management feature to include an expiry date and use it to identify items based on barcodes. This helps you maximize your sales by displaying items with nearer expiration dates first, or offering them with discounts and promotions.
Warehouse Management
Large businesses that stock up on products and materials often have their own warehouse. You can use your POS system to help organize and track items in your warehouse by adding codes in your inventory tool. This will correspond to a specific section in the warehouse, such as the section and palette numbers.
Then, your warehouse manager on-site has access to your inventory list from an IPAD or tablet. Based on the codes, they can find products for bulk delivery, pull out, or inventory count.
Sales Reporting by Store
A POS system is also highly useful in tracking sales records when you manage multiple store locations. Its reporting functionality can provide you with real-time sales data, which you can customize by store, counter, and even cashier ID. It also tells you which items are selling fast, so you can adjust your inventory levels on time.
Restaurant-Specific Functions
POS systems help restaurants that require a unique system of tracking products and other business processes.
Caption: Windows POS system in a KFC (Image: Bimi Windows POS system)
Product and Ingredients Tracking
Restaurants need to keep track of ingredients because it ties directly to their available products. If a certain popular item requires 5 ingredients, you won’t be able to make a sale if you miss 1, making the other 4 also useless. Using a POS will help make sure that you maximize your available ingredients and reorder them on time.
Kitchen Display System (KDS) Integration
A KDS is crucial when running a busy food-service business. Some POS systems designed specifically for restaurants come with a native kitchen display software. This is a great option for new restaurant owners on a budget. Others are compatible with popular KDS, which is helpful, especially if you already use one that you would like to keep and just upgrade to a new POS.
Either way, you can use your POS system to connect with a KDS for coordinating orders with the kitchen staff. A connected KDS also means the POS can pull information directly to update ingredient tracking.
Menu Management
Menu management also goes hand-in-hand with ingredient tracking. With this, you can use your POS system to make sure that only menu items with the available ingredients are shown to the customer. You can use the interface to remove a menu item as they are grayed out by the system, or automate it so you won’t need to adjust manually during service rush.
Some POS systems also offer a digital menu service that lets you display your items on a screen. Others give you the ability to generate a QR code for customers to access from their phone.
Table Management
This table management feature is unique in a restaurant POS system. Although, as with KDS, some offer this as a built-in solution, while others can integrate with popular providers. Use this to assign ticket orders and manage customer billing. It also lets you integrate with tools to accept or cancel reservations.
More advanced POS providers provide a handheld device option to support table management. There’s even a more affordable option where you can set up your own with an existing iPad or tablet. This will display table locations, numbers, and timers so your staff can easily keep up with the service. Some even offer tableside ordering and even payments with this feature.
Caption: All-in-One POS system with printer & scanner in a bakery (Image: Bimi POS system for small business)
Local Delivery Service Integration
Modern POS systems give you a local delivery service management feature. This is especially useful if you sell food online. You can either connect to a popular local delivery service provider or set up your own to avoid the extra cost. The POS system will let you monitor the orders coming in, send the orders to the kitchen, and track the delivery status.
Your POS will even display maps and customer contact information in case there is a delay in the delivery. For those who also integrate marketing tools, customers will have the option to leave reviews about the service.
Service-Based-Specific Functions
Businesses that offer specific services require additional tasks that are sometimes combined with other tools, such as inventory management.
Service and Package Pricing
With service as the main source of sales, you will need a way to list a menu of your services and charge customers according to your pricing strategy. You can use a POS system to manage your menu of services. Set up a range of ala carte and packages that your customers can choose from.
What’s more, a service-based POS system lets you track both customer-facing inventory and supplies separately. This ensures that you don’t run out of supplies, which can cause you to pause your service and lose sales. If you sell products that complement your service, the POS system makes sure you are never low on stock.
Appointment Setting
Appointment setting is one of the main functionalities needed to operate a service-based business. A POS system can integrate with popular tools that create a business calendar to lock in appointments, update, or cancel schedules. This can also be connected to your customer profiles, which help in providing them with customized service.
In most cases, you can also use the POS system to set up an online appointment portal. This will let customers check your business calendar and book their spots without spending minutes talking on the phone. Some POS systems even allow customers to pay for reservations online. You can also add a digital receipt and an automated confirmation note.
Room Charge Posting
Bed-and-breakfasts and hotel-type services may require a system to record room charges. You can use a POS to create customer profiles, assign them to room numbers, and open a “tab” with a running list of charges. The customer profile will also include pre-authorized credit card information that can be used to pay for those purchases.
At checkout, the POS system will generate the room charge list immediately, which helps minimize delays. The front-desk staff can proceed with charging the credit card to complete the transaction.
Memberships and Prepaid Package Management
In addition to tracking supplies and products for sale, your POS system can also be used for managing memberships and prepaid packages. Use this to tag customer profiles for membership eligibility or offer prepaid packages as a promotional strategy. Your POS system will let you create an invoice to list these purchases and set up a payment process.
Healthcare-Specific Functions
Healthcare establishments use POS systems to manage and charge for services.
Caption: Windows 10 POS system in a Hamburger shop (Image: Bimi POS system hardware)
Patient Portal Integration
Some POS integrates with patient portals. Online patient portals are significant to healthcare practices because they hold confidential patient information. Patients access them online, where they can set up an appointment, download their lab results, and see a history of their visits. In most cases, this is also where patients fill out their intake forms for faster processing.
Itemized Billing For Services
POS systems are used to process billing in healthcare facilities. This allows you to create an invoice and set up payment methods that customers can choose to pay for in-person or remotely. Additionally, your POS system can be used to track installment payments, which is particularly useful for long-term patient care or admissions in hospitals.
Inventory Control For Medical Supplies
You can also use a POS system to manage medical supplies and medicine. The inventory feature can support complex product matrices to help keep track of supply and medicine usage. It can also add user-based level access by generating unique PIN codes to track which employees are making changes to inventory data.
Integration With Practice Management Systems (PMS)
A practice management system holds confidential patient information and requires a billing system. To do this, you need to pull treatment information directly from the PMS. A POS system can be designed to provide layers of security to protect the confidential patient data. At the same time, you can also install PIN-based features to track who or when information was accessed on the system.
Bottom Line
A POS system should be used to improve the lives of business owners and employees alike. It should be able to provide a single, efficient operational platform that’s tailored to every business type. While the market is filled with a wide variety of POS options, value for money should be the user’s first priority.
Business owners should not be stuck with a POS with fewer features that will force them to invest in additional software. Nor should they pay for a POS with advanced tools that they don’t really need. By understanding what a POS system is used for and the functions it can serve, you will be able to choose the best option that maximizes your investment.
Need help on how to choose? BIMI has 15 years of experience providing tailored POS system solutions for businesses of all sizes. Explore our list of POS solutions or reach out to our in-house experts for a recommendation.
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Frequently Asked Questions (FAQs)
What types of businesses use a POS system?
Most modern businesses can benefit from a POS system. They are used by small to enterprise-level businesses in various industries such as retail, restaurant, service, and healthcare. There are different types of POS systems. A POS system can be a countertop terminal, an app-based mobile solution, an online system without hardware, or a self-checkout kiosk.
However, before investing in one, it’s important to assess your business goals and make sure that it makes sense instead of a cash register.
Is a POS system only used for accepting payments?
No. In fact, this is where POS systems stand out from cash registers. A POS system comes with native inventory management tools. It also generates a variety of business reports that include sales, inventory, customer records, and more.
A POS system is also designed to connect seamlessly with popular business platforms. As a result, they can be set up to become a central point of operations for your entire business. You can update your business data, set automations, and generate business analytics all from your merchant dashboard.
What’s the difference between a POS system and a POS terminal?
A POS system is a set of software and hardware platforms, including the cloud network, that makes it possible to create a centralized business management system. A POS system can be a single or multiple-terminal setup.
Meanwhile, a POS terminal is a type of POS that’s designed for brick-and-mortar stores. These are what replaced cash registers at checkout counters, performing the same primary functions. However, the POS terminal can be expanded to mobile POS, online POS, and even other terminal counters, making it a much larger POS system.
What’s the difference between a POS system and a Cash Register?
Actually, it is a topic about the POS system vs Cash register.
For hardware, it comes with a touch screen, while the cash register comes with a hard keyboard. And the screen size is much different: the POS system has a bigger size, which is easier to operate, while the cash register only has an LED8 display.
For software, normally, the traditional electronic cash register comes with software directly, no need to pay the software cost when you buy the cash register hardware. But for pos system, you need to pay for the software per month or per year.
What are the benefits of a POS system?
Before you plan to buy a POS system, you should know the top 7 benefits of a POS system for your modern business:
1. Improve payment efficiency
2. Reliable during high-volume transaction volumes
3. Keep the transaction price accurate and error-free
4. Support multiple payment methods
5. Make inventory management clearer
6. Analyze consumers’ purchasing preferences
7. Make the transactions more standardized and secure
Can POS systems handle wholesale and B2B pricing?
Yes, modern POS systems can support customer groups, tiered pricing, and negotiated pricing lists. The inventory can also handle bulk orders, invoicing, installment payments, and a variety of payment methods. Note, however, that this type of POS system requires more advanced tools and may cost more than other standard POS platforms.
How does a POS system help manage inventory?
A POS system is equipped with an inventory management feature. This allows you to manage an unlimited number of products, keep track of variants, create separate counts for case breaks, and assign a list price. It also lets you conduct a more reliable inventory count, control inventory levels with stock alerts, and link supplier information to automate reordering.
Once you’ve completed setting up your inventory data, updating information becomes simple. Any sales, refunds, or voids processed will reflect in your inventory data in real-time. This helps minimize revenue loss due to shrinkage and stockouts.
Can POS systems support multi-store operations?
Yes, POS systems can be designed to support multiple stores. In fact, you will find many options in the market that offer a complete suite of hardware and software tools to handle the demands of high-volume operations. This is primarily because most systems are now cloud-based. Meaning, it stores your data in the cloud, and you can make your changes to it while on the cloud.
Each transaction will update all the relevant business records in real time, so every employee will see the same inventory count and transaction statuses. Security is also in place to protect hardware and software from any attempt at data breach or theft.
Are POS systems suitable for small businesses?
POS systems are suitable for most business sizes. There are simple mobile POS systems that require very minimal upfront cost and are easy to set up. Others offer zero monthly software fees, so there’s no need to worry about the cost except for payment processing. The question that remains is whether your business growth strategy matches what a POS system can offer.
If you have no plans to grow your customer base, your sales target, or your inventory, then a cash register might be the most sensible alternative. However, if you want to push your business forward, you will need a scalable business solution like a POS system.
Do POS systems work offline?
The short answer is yes, you can still process transactions at the checkout counter even without an internet connection. However, a cloud-based system like the POS needs the internet to update the data stored in the cloud. You can continue ringing in sales at checkout, but the information is stored in the terminal until the connection is restored.
This means any inventory or sales data acquired during the event is outdated, and transactions done with credit card payment are not processed in real-time.
How do POS systems integrate with accounting software?
Most POS systems are compatible with popular accounting software such as Xero and QuickBooks. You can easily set up a one-way integration by choosing the accounting platform extension on your POS system. Once you click on the “Connect” button, it will reroute you to your accounting platform’s site and prompt you to log in with your information.
Once both are connected, your accounting platform will have access to your POS data. It can pull transaction information, timekeeping records, inventory, and sales data whenever it’s scheduled. However, note that this does not remove your accounting platform’s monthly fees. You will still need to pay, but your data transfer is seamless and free from manual errors.
When should a cash register be upgraded to a POS system?
A cash register is a reliable solution for ringing sales. However, it does not have the ability to scale its system with hardware peripherals or software upgrades to gain access to better management functions. So if your current business goal demands increasing tools such as inventory, CRM, marketing, and employee management, then it’s time to consider a POS system.
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