POS software, or Point of Sale software, is used to complete a transaction when a customer makes a payment for products or services at a store. In other words, when a customer purchases items at a store, a point of sale transaction is being completed. POS software is the central component of a business where all aspects come together such as sales, inventory, and customer relationship management. POS software has the components of a cash register and a computer where cashiers input the purchased products, tally the cost, and receive the payment to complete the transaction.
POS software vs. cash registers
POS software is similar to a cash register in that both handle transactions, but the similarity ends there. A POS system also integrates credit card transactions, and it gives a retail business a central point for tracking inventory, customer loyalty, the effectiveness of sales people, and more. Through analytics, POS software can tell you which customers to reward, which products to promote or discount, and which salespeople are your most important. In short, a POS system goes well beyond a tradition cash register to improve your profitability.
Types of POS software
POS software is generally classified into:
This is the most basic type of POS software, and can be used to manage and process payments and perform inventory tracking.
This POS software is the most commonly used system by businesses because it has advanced functionalities at a reasonable cost. Terminal POS can be both software and hardware-based, with added features like cash drawers and barcode scanners.
Cloud-hosted POS systems can be set up online or in the cloud along with your existing hardware, such as computers, printers, and tablets. Businesses of all sizes can benefit from this setup because of its affordability, convenience, and scalability.
Benefits of POS software
POS software helps retail businesses function more smoothly by:
- Giving a good overview of the business and keeping track of cash flows
- Providing advanced reporting to identify the most and least profitable products
- Keeping track of deliveries and inventories
- Changing product pricing and automatically updating it in the system
Components of POS software
POS systems have two basic components: hardware and software.
Hardware is the physical setup of machines, which can either be a tablet linked to a cloud-based system or a cash register connected to a PC. It can come with add-ons such as a barcode scanner, receipt printer, cash drawer, and card machine for processing credit or debit card payments.
The software works alongside hardware and stores and manages information within a database. It is important to choose flexible software that works with a business’s payment/gateway processor of choice.