What is a Point-of-Sale (POS) System?
Simply put, a POS system is a special set of hardware and software that enables a business transaction between a customer and a company to take place. While this sounds simple enough, a proper POS system is your number one tool in offering your customers better service, increasing efficiency and business organization, reducing employee errors, reducing overall costs, and improving your company image.
What Does a POS System Do?
We have all seen the cash register at check out, where the employee scans our items, swipes our credit cards and hands us the receipt. I suppose this could even be done with a calculator and a pad of paper? Why invest in a complete set of hardware and software? What else is going on behind the scenes?
A POS system offers you real-time inventory management. You (and therefore your customers), will know what you have in stock when you have it. Stock can be scanned directly into the system upon arrival with a barcode scanner and deducted automatically upon sale. Alerts can be set up to notify you when hot selling items are running low. In a time of high competition where customers want what they want immediately, a POS System helps you not lose the sale to the store down the street. In addition, reports can clearly show you what items are not selling, and just taking up valuable shelf space. Product barcode labels can be printed with your stock-keeping unit (SKU), a scannable bar code, most often seen printed on product labels. The barcode label allows the automatic tracking of inventory movement, produced as needed with an attached barcode printer.
Invoicing is not just done so that we can hand the customer their receipt. What about invoices for purchases, rentals, consignments or repairs? Invoicing done manually is complex and very time-consuming. With the right POS System in place recording and grouping your invoices can be done automatically, not only to provide you with a correct record of accounts, but to give you an essential snapshot of the health of your business at any given time.
Perhaps most importantly, prices are auto-calculated, credit card terminals are integrated, errors are reduced, resulting in a faster check-out experience. Nobody likes to wait in lines.
Customer Management (and loyalty!)
Customer Data is an invaluable, and an often untapped, resource for a business. Customer data can be compiled in a POS System, giving you an accurate view of your target market segments and who your loyal customers are. Marketing programs can then be targeted directly, substantially increasing the likelihood of a profitable response. Loyalty programs can be created that actually give the customer reasons to come back.
A POS System is a great asset in managing employees and optimizing scheduling. You will be able to see sales per employee, what time slot, and their hours worked. With an overview of employee performance, training can be provided where improvement is required. Furthermore, peak sale hours are easily identified allowing you to optimize employee time on the floor.
You’ve learned from the reports generated by your POS System that certain items just aren’t selling? With a POS System you can easily manage promotions and free up the wasted shelf space. Select items, select the type of discount and the promo duration and all you will have to do is activate them when wanted.
Overall Business Organization
With a POS System in place, your business will be more organized. And a more organized business is more efficient, more productive, and more profitable. POS Systems offer you the ability to have information on sales, inventory, customers, and suppliers all within one software platform, providing you with the complete picture of your company’s health.