ON THIS PAGE:
Steps On How A POS Works
What are The Different Parts of a POS System?
On-Premise vs. Cloud-Based Point of Sale Systems
What a Modern POS Can Do For You
A point of sale system was a cash register that could simply record and analyze the day’s sale in the past.The current main function of point of sale systems remains the same.
However, with today’s technology, these systems become more often. Often, business owners themselves aren’t very familiar with how POS software works, even though it’s one of the most important aspects of running a successful business.
Steps On How A POS Works
How does a POS work,which usually has five steps,or certainly less.Here are the five steps.
1. Customer chooses desired items
2. These items are scanned into the POS
3. The POS software calculates the price
4. The customer pays with cash or card
5. The transaction is accurately and securely completed
In general,A POS system includes the software and hardware that the business can be done, whether in store or online. While all POS systems serve the same basic purpose (that is, executing purchases) since they were invented, they also perform many more vital functions for both the store and the customer now.
What Are The Different Parts of A POS System?
We can’t talk about how POS systems work without first discussing its components.These solutions are generally made of two key parts: POS software and POS hardware.
POS software
POS software is the program or application that executes the various functions required at the point of sale. As the most important part of the system, the primary function of the software is to process transactions and store data.Modern systems provide an array of functions that taper to specific business demands. These functions aid company management in many tasks, including sales analysis, manage inventory,employee management, and customer relationship management.
On-Premise vs. Cloud-Based Point of Sale Systems
POS software can also be classified as either being cloud-based or on-premise. The former can be accessed over the internet anytime and anywhere, while the latter is hosted locally on your own server or computer.
Cloud-based point of sale systems usually work through a SaaS (Software as a Service) model, and providers charge a subscription fee for the software. On-premise POS systems are installed on your computer, and you typically have to pay for the software upfront or pay a licensing fee.
Many are opting for cloud-based software because they’re more accessible and scalable. With cloud-based solutions, you can access the software from any device as long as you have an internet connection, making it easy to check in on business.Updates happen automatically, and you simply have to download the latest version of the software.
With on-premise software, the solution “lives” in your device or server, so you’re in charge of maintaining and updating the software. Some small businesses that prioritize in-store sales and have one POS terminal or prefer to have their data on-site usually choose on-premises software.
Hardware includes the physical components of your point of sale system. Think of hardware as the body of your POS, while software is the mind. Below are the most common hardware used with a POS system.
POS terminal – This is the device on which the POS software physically runs. It can be a desktop computer, laptop or mobile device (e.g, smartphone or tablet). Some POS providers may offer specially-designed hardware that works with their proprietary software. Different types of terminal work better for different types of stores and products, depending on space, scale, mobility, and more
POS display screen –This usually refers to the screen that consumers can see,for short the consumer display.It is usually used in large supermarkets and commercial complexes.This is very friendly to consumers,who can clearly see and check things they buy and price they need to pay.
Card reader – If you accept credit and debit card payments (and you totally should), you need a credit and debit card reader to facilitate the payment processes. The type of card reader machine you need will depend on your point of sale software and terminal. The most basic is a magnetic-stripe card reader. These are the traditional credit card readers we’re used to seeing in stores.Now more advanced is the use of credit card chip readers and near-field communication (NFC) readers for mobile devices.
Barcode scanner – Ideal for stores that have a large catalog, a barcode scanner saves you time from having to manually type or search for products. Just scan the barcode and your POS will automatically add the product to the transaction.
Receipt printer – If you provide physical receipts to shoppers, then you need a device to print those receipts. This is where the receipt printer comes in. When connected with your POS system, the printer will automatically produce a receipt when the transaction is complete.
Cash drawer – This device primarily holds cash, so you can cater to customers who prefer this payment method. Your cash drawer stores cash so you can collect payments and dispense change when necessary.
Not all POS systems will have every single device above. If you send out email receipts for example, then you don’t need a receipt printer. If you only accept credit card payments or do business on-the-go, then a cash drawer isn’t necessary.
The two must-haves in any POS system are the display and payment terminal.
What a Modern POS Can Do For You
The POS is no longer simply a cash register. It can include built-in functions to make your business much easier to operate. Currently available POS software can perform a multitude of functions to help with inventory management, loyalty programs, employee payroll, sales tracking, and more.
One clear advantage of modern solutions is that they are easily enhanced with third-party add-ons. By integrating other software applications, your POS system functions smartly and seamlessly across all aspects of running a small or large business operation.
Tracking Sales
Built-in performance indicators, conversion rates, and product reports provide key data and sales trends. These tools can provide a variety of information, including identifying struggling products or measuring performance between different store locations. In concert with other programs, this information assists business owners in showing seasonal trends and so much more. By analyzing the past it can help you predict the future.
Loyalty Programs and CRM
While POS software facilitates sales it can simultaneously track who is purchasing what items and how frequently. Cloud-based systems can be easily integrated with customer relationship management (CRM) databases to build reward programs, target specific customers, and reach out to lapsed clientele to get them back in the store.
Inventory Management
A cloud-based POS system can automatically account for all items within a company’s inventory across multiple brick-and-mortar locations and eCommerce sales. Tracking key performance indicators (KPI) and conducting ABC analysis allows businesses to optimize their efficiency and fully understand their inventory. Smart tools such as automatic reordering save time and energy for business operators.
Built-in Credit Card Processing
Many cloud-based systems will offer pre-integrated credit card processing that skip the need for a separate processing solution. This can be a good fit for some businesses, particularly those that have very few transactions or are looking to save money upfront on hardware costs.
However, it’s always best to do your own research and determine if this option will cost you more than using a separate processor. Often, when the POS and processing solutions are bundled, the processing rates will be artificially inflated above market price. Some cloud-based POS systems, though, are called “agnostic” and will allow you to use the most affordable processor you can find.
Employee Management
The same POS screen that is used to execute sales can also allow people to clock in and out. Employee data collection can easily track sales and efficiency for specific workers. Multiple custom security features are available such as records of void or sale cancellation to protect the cash register, and tapered permission levels to tailor the access of individual workers.
ARTICLE SOURCES
1. https://koronapos.com/blog/how-does-a-pos-system-work/#1
2. https://www.lightspeedhq.com/blog/how-does-pos-system-work/
3. https://www.techradar.com/news/how-does-a-pos-system-work