The Point of Sale (POS) System serves as the central element of your business. A POS is a location where your customer makes a payment for products or services at your shop. Simply put, it’s the centre where everything like sales, inventory management, payment processing, and customer management merges.
Today, modern POS systems are fully digital, which means you can check out a customer from anywhere. All you need is a POS app and an internet-enabled device, like a tablet or phone.
The point-of-sale software goes beyond credit card processing to help retailers and restaurants. A point-of-sale system is used to refer to the cash register at a store that incorporates mobile POS features and contactless payment options, e-commerce integration capabilities, and more.
How does a POS system work for a small business?
So what does a POS system do?
1. A customer decides to buy your product or service.
If you have a physical store, the sales associate could use a barcode scanner to look up the item’s price. Some POS systems, like Square Point of Sale, also allow you to visually scan items using the camera on your device. For online stores, this step happens when a customer finishes adding items to their cart and clicks the checkout button.
2. Your POS system calculates the price
Calculates the price of the item, including any sales tax, and then updates the inventory count to show that the item is sold.
3. Your customer pays.
To finish their purchase, your customer will have to use their credit card, tap card, debit card, loyalty points, gift card, or cash to make the payment go through. Depending on the type of payment they choose, your customer’s bank then has to authorize the transaction.
4. The point-of-sale transaction is finalized.
This is the moment when you officially make a sale. The payment goes through, a digital or printed receipt is created, and you ship or hand your customer the items they bought.
What are the Components of a POS system?
Every POS system comprises software and hardware components that make running the daily operations of your business. It’s important to understand what POS software options are. They are on-premise (or installed) POS terminals and a cloud-based POS system.
A cloud-based POS system with centralized payment processing, inventory management, customer loyalty program, and more.
Flexibility is key to ensuring your POS vendor works with the payment processor of your choice so that you can control cost. If you’re already using applications important to your business, make sure the POS can integrate with them seamlessly, so that you can continue using them. On-premise POS hardware, like a barcode scanner, cash drawer, card reader, receipt printer, and more.
Hardware components of a POS system
These are the common physical components required to get your POS up and running.
Monitor/tablet:
Displays the product database and enables other functions. Employee details, inspecting sales reports, and many more. Recommend replacing larger monitors with tablets.
Barcode scanner:
Scanning barcodes extract product information and add it to the checkout total. Barcode scanners can also combine with inventory management systems to automatically adjust stock levels. It automates the checkout process.
Credit card reader:
Since Non-compliant retailers face potentially huge losses on fraud credit card readers are a must.
Receipt printer:
Paper receipts remain indispensable for providing customers with a fast snapshot of their purchases or returns even Email and text receipts getting popular.
Cash drawer:
You’ll need a safe place to store cash for transactions. It may fade away in years, but cash is still king. Another benefit of cash: there are no associated credit card fees.
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