Like it or not, if you want to be able to scale your business, you’re going to need a point-of-sale system.
You may not think you need one right now, and depending on the nature of your business, you may be right about that.
But at some point, you’re probably going to want to expand your business, and without a point-of-sale system in place, that could be practically impossible.
Without a point-of-sale system, transactions will have to be manually processed, and inventory will have to be manually updated, both of which can be incredibly time-consuming.
As a result, transactions and inventory management will be more prone to human error, and you may be limited to only accepting cash, meaning you might have to turn away a lot of customers.
At the same time, you’re not going to have access to all the benefits and features of a point-of-sale system, like being able to offer a better experience for customers, the ability to accept various forms of payment, sales reporting and analysis capabilities, and better record-keeping, which can help to ensure compliance with legal and regulatory obligations.
Unfortunately, similar to pretty much everything else in this industry, picking a point-of-sale system can be incredibly convoluted, and most payment processors aren’t trying to make it any easier.
With that in mind, and in keeping with our commitment to provide absolute clarity for our customers, we figured we should publish an article explaining how to pick a point-of-sale system.
So, if you’re wondering how to choose a point-of-sale system, and you need some advice, then we hope you take the time to keep reading.
Because in this article, we’re going to explain what a point-of-sale system is, what options are available when choosing one of these systems, and what you need to know to choose the system that’s right for your business.
What Is a Point-of-Sale System?
For those of you who aren’t quite sure, a point-of-sale (POS) system is a combination of hardware and software used by businesses to complete sales transactions with customers. A typical system includes the following elements:
Hardware
These systems are made up of many different hardware components, including:
- Computer or Tablet: This serves as the central processing unit and runs the POS software.
- Barcode Scanner: Used to scan product barcodes.
- Cash Register or Cash Drawer: For storing cash, checks, and other forms of payment.
- Receipt Printer: To provide customers with a printed receipt.
- Card Reader or Terminal: Used for processing credit and debit card payments.
- Customer Display: Shows customers the transaction details and prices.
- Touch Screen Monitor: Allows staff to input items and complete transactions with a touch screen interface.
- Peripheral Devices: A POS system can also include devices such as receipt printers, kitchen printers (for restaurants), and scales (for businesses selling products by weight).
Software
These systems run on software that may include the following features:
- User Interface: The software interface where the cashier or staff enters items, processes payments, and generates receipts.
- Inventory Management: Helps businesses track stock levels, reorder products, and manage product information.
- Sales Reporting and Analytics: Generates sales reports, tracks trends, and provides insights into business performance.
- Payment Processing: Integrates with payment gateways to process various methods of payment.
- Customer Database: Stores customer information and may be used for loyalty programs and marketing.
- Employee Management: Tracks employees’ hours, permissions, and performance.
- Barcode Scanning: This allows you to scan product barcodes for things such as inventory management, order fulfillment, and checkout.
What Options Are Available When Choosing a Point-of-Sale System?
The choice of a POS system should be based on careful consideration of the specific requirements and scale of your business, as well as your budget and long-term growth plans.
That being said, it’s important to research and evaluate all your options, so you can determine which one best fits the needs of your business.
And now that you know what’s included in a typical point-of-sale system, let’s explore the options that are available. These options can be categorized into three main types:
Traditional On-Premises POS Systems
These are traditional, locally installed systems that run on dedicated hardware, which is located within the premises of a business.
The advantages of this option include a high level of control and customization, the ability to operate offline in case of internet outages, and the fact that it’s a one-time software purchase.
However, these kinds of systems often require a significant upfront investment, tend to require regular software updates, may have limited scalability, and maintenance can be costly.
Cloud-Based POS Systems
These are web-based, Software as a Service (SaaS) systems, which are hosted in the cloud and accessed via the internet.
These systems offer several benefits, including lower upfront costs, automatic software updates, better scalability, accessibility from anywhere with an internet connection, and support for mobile devices, along with integrated data backup and security.
But despite all these advantages, these systems offer limited control over the software, pose potential data security concerns, will not work without being connected to the internet, and while they do require less of an initial investment, you’re going to have to pay ongoing subscription fees, so keep that in mind.
Mobile POS Systems
These systems run on mobile devices, such as smartphones and tablets, often with peripheral hardware like card readers and receipt printers.
This kind of system offers the benefits of portability and greater flexibility, and depending on the nature of the business, the mobility it offers may be absolutely essential.
However, this type of system tends to have less functionality compared to full-scale systems, may not be suitable for larger businesses, and is also dependent on battery life and device durability.
Within these categories, you can also choose from various feature sets and functionalities to meet the specific needs of your business, including:
- Retail-Specific POS: These systems are tailored for retail businesses and typically include features such as inventory management, barcode scanning, and customer loyalty programs.
- Restaurant-Specific POS: Designed for food-service establishments, these systems often include table management, menu customization, and kitchen display integration.
- E-commerce Integration: Some systems integrate with online sales channels, allowing businesses to manage in-store and online sales from a single platform.
- Omnichannel Solutions: These systems enable businesses to sell across multiple channels, including brick-and-mortar stores, online stores, and marketplaces, with integrated inventory and sales data.
- Mobile Payments: Many modern POS systems support mobile wallet payments like Apple Pay, Google Pay, and PayPal, as well as contactless payments.
- Customer Relationship Management (CRM): Some systems offer CRM features to track customer data, preferences, and purchase history for targeted marketing and loyalty programs.
- Reporting and Analytics: You can also choose systems that provide robust reporting and analytics tools for tracking sales, inventory, and other key metrics.
How to Choose a Point-of-Sale System
Now that we’ve explored what a point-of-sale system is, along with its components, potential features, and the various options that are available when it comes to these systems, you’ve got a much better idea of what you’re going to need for your business.
But, as we already mentioned, the payment processing industry is notoriously convoluted, and as a result, just understanding these concepts may not be enough for you to make the right choice.
With that in mind, aside from everything we’ve already discussed, we also want to offer some advice on how to choose a point-of-sale system, so you can avoid potential pitfalls and make the best decision for your business. Here’s what you need to consider when picking a POS system:
Budget
Before you even start weighing your options, make sure to develop a clear budget and compare the total cost of ownership for different systems to what you’re actually able to afford.
And remember that you need to factor in not only the initial setup costs, but also things like monthly subscription fees (if applicable), hardware expenses, and ongoing maintenance.
Business Type and Industry
The type of business and industry you’re in can significantly influence the type of system you need, and the kind of features the system will require.
So, regardless of the industry you’re operating in, make sure that the point-of-sale system you choose offers everything you need, and if possible, try not to settle for something that doesn’t quite cut it.
Otherwise, at some point, you’ll probably end up having to scrap the system you have and replace it with something more suitable, and that can cost you a lot of money.
Features and Functionality
Before choosing a point-of-sale system, make sure to identify the essential features your business requires.
But keep in mind that some systems only offer a specific set of features, and they can’t be modified, so once you’ve installed them, you’re pretty much stuck with what you’ve got unless you want to purchase an entirely new system.
And considering that these systems can cost several thousand dollars to install, this is something you’ve got to get right the first time.
Scalability and Versatility
When making your decision, you’ve got to think long and hard about the future of your business, particularly as it relates to how you plan on diversifying or expanding.
Ask yourself: Can this system grow with my business? And does it offer all the features that I need now and the ones I might need in the future?
Some systems will be incredibly convenient for one specific type of service offering, but if you’re looking to diversify or expand your business, they may end up being completely incompatible.
Integration
Some systems will be able to integrate with other software and tools your business uses, such as accounting software, e-commerce platforms, or payment gateways, but others will not.
So, if you already have specific tools or software in place that you know you can’t part with, make sure that the system you’re choosing is going to be compatible.
Mobility
Depending on your business, you may want a mobile POS system that allows you to process transactions on smartphones or tablets.
For some businesses, this won’t even be applicable, but for those that require on-the-go sales, such as pop-up shops or food trucks, this is an invaluable feature.
Payment Options
No matter what kind of business you own, or what industry you’re in, make sure that your system can accept all major forms of payment, including debit cards, credit cards, mobile wallets, contactless payments, and cash.
Otherwise, you may end up having to turn potential customers away, and that’s never a good thing.
Hardware Compatibility
If you already have hardware in place, and you don’t want to have to replace everything, make sure that any system you’re considering is compatible with your existing hardware, such as barcode scanners, receipt printers, and cash drawers.
If not, then you may end up having to replace everything, and that can be very expensive.
Support and Training
Consider the level of customer support and training offered by any POS provider you’re thinking about choosing.
Reliable support can be critical for addressing any issues and if anything does go wrong, you’re going to want to be with a company that will be able to fix the problem fast.
Customization
Make sure to determine if a potential system allows for customization to meet your unique needs.
Depending on the nature of your business, you may need a system to be customized. But if a system is too rigid, and can’t be modified, then it may not be a viable option.
Reporting and Analytics
Robust reporting and analytics tools are valuable for tracking sales trends, monitoring inventory levels, and making informed business decisions.
These features are incredibly insightful and can save you a lot of time, so if possible, make sure your system includes this functionality.
Data Backup and Recovery
You should also inquire about a potential system’s data backup and recovery capabilities.
Losing important data can be an absolute nightmare, so for any system you’re considering, make sure that your sales data and business records will be easily recoverable in the case of a system failure.
Consider a Smaller Local Provider
There are many companies out there that can provide point-of-sale systems, but if you want to save money, choosing a smaller local provider is probably your best option.
Banks and other large corporations offer these services, as well, but they’re pretty much all going to charge you more than a smaller local provider would.
These companies have massive overheads and a never-ending stream of customers, so they have to charge more, and there’s really no incentive for them to give you a good deal anyway.
At the same time, a lot of them also have systems that are highly specialized, meaning they’re quite rigid and don’t offer a lot of options for customization.
But if you go with a smaller local provider, not only is it going to be cheaper, but they’re also more likely to offer an array of options that can accommodate all aspects of your business.
Are you still struggling to pick the right point-of-sale system for your business? We offer a full range of options, competitive pricing, and only the best quality equipment. Give us a call today to find out how we can help.
