In the old days we had a cash register which is a cross between a calculator and a cash box. These days we have a POS System to transact a sale or order and take cash or credit card payment. In this guide, we will look at why you might need a POS terminal, what you kneed to know and how to buy the right one for your retail environment, cafe or restaurant.
A Point of Sales system (terminal or machine) is an electronic device that allows a physical transaction to occur between a merchant and a customer for a product or service. This is much more than an EFTPOS terminal which we have covered in a separate guide. Put more simply it’s the device they use at McDonald’s to enter your order and take your money.
WHY do I need a POS System or Terminal?
A POS system will automate your process of completeing a transaction rather than writing on paper, using a calculator or simple cash register.
Retail POS software brings many benefits to retailers aside from simply completing transactions. These include:
- Sales reporting and analytics: Provides retailers with insight into their sales, helping users make informed decisions that strengthen the business.
- Inventory management: Automates stock control and helps retailers determine optimal product counts and when and how to reorder top-selling products.
- Customer management capabilities: Help retailers automatically record and track valuable customer information, enabling stronger relationships, and encouraging repeat business.
WHAT do I need to know about POS systems?
They come in various flavours and can be from simple to very complex. You could have a solution as a stallholder, a restaurant, or a retail store. In a retail store with such a system you could scan a bar code to have the item automatically added to a sale, take payment, adjust instore inventory, and pass sale information through to your accounting system. Additionally, in a restaurant you could take an order via a smartphone, add a table number and have the order print out in the kitchen.
Many POS solutions today will help you run and grow your entire business, with information such as detailed sales reports and analytics, employee management and tracking software, inventory management, and gift cards.
HOW to choose the right POS system?
As a small business, it will make much more sense to try to find an off the shelf system rather than going for a custom solution that will have large upfront costs. The benefit of using a POS system is that it can simplify and automate many of your administration tasks freeing your time up to spend growing your business rather than maintaining it. These cloud solutions will also integrate with your accounting package (see our essential guide on accounting packages and cloud solutions) prepopulating all the data so no manual input is required.
Even though this solution is cloud-based it will still require some hardware at the point of sale like a smartphone, tablet, PC, or dedicated terminal which you will interact with. A cloud-based solution is one where the computing and software sit external to your business and for a monthly fee, you get the functionality without having to invest and maintain expensive backend computing hardware and dedicated software.
When choosing a POS system you should consider
- Stand-alone system or Cloud-based?
- Does the package suit Australian conditions, for example GST?
- Will it work offline? You need it to still function if the internet goes down.
- Does the provider have appropriate security in place to stop others from accessing your data?
- Does the solution come with hardware or do I need to buy separate hardware like a tablet?
- Cost – how much per month per terminal/store?
- Usability – Can it easily be used day to day with minimal training?
- Fast & efficient – How quickly can the operator complete a transaction? Nothing worse than keeping a customer waiting
- Will it meet your future needs? Can you easily add extra terminals?
- Does it support value add functionality that might assist your business? For example, inventory tracking
- Will it integrate into your existing or planned accounting package?
- Does it support EFTPOS or can EFTPOS be integrated?
- What reporting is available and how easy is it to interrogate and interpret?
- Is customer support available and during what hours?
Some of the companies providing cloud POS solutions in Australia today include Hike Up, Kounta, Retail Express, Square, and Vend.
Now that you have selected a POS system you also need to consider what additional physical hardware you might need beyond the terminal, tablet or smartphone, such as a cash draw, printer, EFTPOS terminal, bar code scanner, tablet mounting bracket, or contactless credit card reader.
SUMMARY – Off the shelf POS solution
A bit of time invested in this solution will pay dividends in years to come, streamlining your business and freeing up manpower to work on other parts of your business. An off the shelf solution will meet the needs of most small businesses.