Point-of-Sale Systems: The Basics

Point-of-sale systems (POS). What seems like an afterthought is often a critical part of every business since it’s responsible for the day-to-day transactions between the store and the customer. Whether you own a physical store or an online shop, using the right POS software can help you close out sales quickly and efficiently.

But how do point-of-sales systems work? What are the best options for choosing POS systems for your business? This article will discuss everything you need to know about POS software so that you can provide a seamless buying experience for your customers.

What are point-of-sale systems?

Point-of-sale systems are hardware or software developed to handle payments, monitor sales, and keep track of inventory in your business. Think of POS systems as cash registers in a retail store or software that e-commerce websites use to secure sales.

Today, most stores use a cloud-based POS system to process credit/debit cards and store data in the cloud, allowing for secure information storage and maintaining accurate inventory numbers. An internet-enabled device like a smartphone or computer is all you need to secure sales and ensure a smooth checkout experience for buyers.

What are the features of modern point-of-sale systems?

POS systems process transactions by calculating the product’s sales price, recording the transaction, and generating receipts. Once the transaction is complete, the POS software updates the inventory numbers and saves the data onto a legacy system or cloud storage.

Apart from processing payments, here are the features that modern POS systems have to offer:

1. In-depth analytics

POS systems collect information to highlight sales trends and consumer buying habits. You can identify which products are in high demand, enabling you to capitalize on customer demand and restock those high-selling items. By understanding your customer’s product preferences, you can invest in products that generate more sales and clear out those that take longer to sell.

2. Inventory management

Maintaining adequate inventory records is crucial to generating profits and lowering inventory costs. POS systems automatically update your inventory each time you sell a product, allowing you to monitor your inventory levels at any given time.

Analyzing inventory numbers makes it easy for businesses to move stock and adapt to changing consumer demands. With POS systems, you can keep up with the latest trends and improve your warehousing efficiency.

3. Customer relationship management (CRM)

Modern POS systems can also function as customer relationship management (CRM) tools thanks to their ability to gather information like:

  • Payment methods used
  • Frequently bought items
  • Customer contact information
  • Amount spent per transaction
  • Buying frequency

Businesses armed with this information can make data-driven decisions to help improve the customer’s buying experience. You can use cross-selling techniques to generate more sales and tailor your services according to the customer’s needs and preferences. You can also enroll frequently returning customers to your loyalty program to establish customer relationships further.

4. Employee management

It may seem surprising that order processing software is capable of employee management, but modern POS systems can do just that. Today, most point-of-sales systems can track employee hours, staffing levels, and sales performance to monitor team productivity on a day-to-day basis.

Some POS systems also support multi-store management, meaning you can access sales performance and inventory at different locations using cloud-based software. You can access the data using a central account on the main branch and monitor which products need restocking. This feature is advantageous to franchises and corporations that look for added flexibility beyond the traditional POS systems.

5. Integrated Supplier Purchases

Modern POS systems are capable of buying directly from suppliers and recording transactions. Having this feature is a game-changer in terms of ensuring the stability of the business operations and helping to support good inventory management. You can easily view supplier purchases and keep track of them so you can maintain adequate stock at all times.

Integrated supplier purchases make it easier for you to plan your restocks by checking your inventory levels straight from the POS system.  In addition, a modern POS system lets limit customer orders depending on your inventory levels.

Point-of-sale system
Modern POS systems have evolved to support analytics, reporting, and even employee management.

How do you choose the right point-of-sales system?

With so many options to choose from, it can feel challenging to choose the right point-of-sale system for your business. But don’t worry, we’ve got you covered! Here are a couple of pointers to keep in mind when looking for POs software:

1. Choose POS software that’s specific to your industry

When it comes to POS software, there is no one-size-fits-all solution. Different systems will have different features that cater to the needs of specific businesses. For example, a POS system for the restaurant industry will have a unique set of features compared to a POS system built for eCommerce.

2. Define your business needs

Before you choose a POS system, it helps to define your business needs first. Does your business need strong inventory management features? Or do you want to secure faster payment processing for an improved buying experience?

Each POS system comes with its own strong suit. One system may offer superior data reporting while the other may provide more efficient employee management. Weigh in your business needs and make a decision based on how well the POS system meets them.

3. Look for flexible payment plans

A good POS system should be able to offer a subscription plan that caters to your specific needs. Whether you’re a small business owner looking to try out new software or a retail giant that wants to upgrade its outdated system, the right POS system will have a subscription plan that works best for you.

Conduct market research on the leading POS systems in your industry and compare their pricing/feature set. The last thing you want is to get stuck with a POS system that isn’t suitable for your business, so look for software that provides flexible payment plans that allow you to make monthly subscriptions.


Modern point-of-sale systems have become an integral part of any business thanks to their diverse features and convenient payment processing. As more and more eCommerce stores pop up, choosing the right POS system has never been more important. Hopefully, the information in this article can help you make an informed choice and utilize your POS system to its full potential.

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