All businesses need point-of-sale systems (POS systems).
Whether you operate an online retail business, a brick-and-mortar store, or a restaurant, you need a point-of-sale system (or POS system) to accept payments, sell your products, and grow your business.
The question is: How do you use a POS system to grow your business?
I have the answer to this question and more.
I wrote this article to discuss how you can use POS systems in different store settings and how they can help grow your business.
Table of Contents
A POS system is the hardware and software that allow businesses to make sales and accept payments.
Each POS solution is different. Thus, there’s no single answer to how it can help grow your business.
Nevertheless, you can expect most modern point-of-sale systems to have similar functionalities.
However, most POS systems today also offer add-ons and integrations for inventory management, customer relationship management, accounting software, contactless payments, sales reporting, etc.
Like most tools, a POS system is only as good as its user. The only way to maximize your POS system is to understand all its ins and outs.
Point-of-sale systems are similar to command centers.
They allow businesses to manage inventory, help staff find items, process sales, and streamline collaboration between multiple departments.
Robust POS systems will enable you to route funds automatically to your bank account after each sale.
Here are standard POS functions that can help grow your business.
Every time your customer buys your product, your sale system can process a wide range of transactions, from cash and mobile wallet to magstripe credit cards and chip cards.
With detailed sales reports, you can make better business decisions, minimize stockouts, and take advantage of opportunities.
Sales reports should also include sales per product (or product type), customer (or customer group), cost of goods, gross sales, profit margins, and taxes.
A robust inventory management software, regardless of business size, is critical. It can help you manage sudden demand changes, track all your supplies, and provide an excellent customer experience.
A CRM-enabled POS system lets you personalize your marketing efforts and customer service.
Employee management software provides insights, allowing you to make better plans, manage your human resources efficiently, and increase productivity.
For restaurants and businesses from the hospitality and service industry, a POS solution allowing customers to give a digital tip during the checkout process is essential.
Your business must issue receipts for all purchases.
Receipts ensure clear communication with customers and make processing refunds easier.
A product performance report tells you how many products you sold over a specific period, which products earn the highest profit, and how fast they sell.
This report lets you know which items are worth investing in and which ones to stop selling.
All modern POS systems have two elements: the management dashboard and the POS terminal.
These components support functions most retailers and restaurant owners need.
Here’s what POS software can do and how it can help retailers and restaurant owners grow their businesses.
One of the most critical functions of a retail POS system is to ring transactions and process payments.
Here’s how the process goes.
If you have a streamlined product line, you can create order screens with color-coded buttons or images for each item.
Another option is to integrate a barcode scanner into your POS terminal so your team can add each product and add it to the sale.
You can add items through these processes:
- Scan a product’s barcode.
- Use a sell-screen shortcut or “Quick Keys.”
- Search for an item on the sell screen (Most POS software have a search bar functionality.).
Today’s customers demand more personalized service and communications from brands. Thus, connecting the sale to a customer profile to improve sales forecasts and reports is advisable.
Connecting each sale to a customer profile is crucial when running a loyalty program where you must count customers’ points.
For new customers, you can create a profile right at the time of purchase. For repeat buyers, you can simply add them to the sale system.
After adding your items to the sale, you can apply discounts, rewards, and other promotions to entice new customers to sign up for your loyalty program. You must manually adjust the item price if your retail POS system doesn’t have this feature.
Most modern POS Systems accept a wide range of payment types, from cash and credit cards to contactless payments, checks, and gift cards.
If you’re using customer tracking, you can connect the customer and the staff member who processed the transaction. This information is helpful if you need to assess your team’s performance and process a return.
You can add special notes to a sale (ex., a customer has a special request) to ensure personalized service, resulting in higher customer satisfaction.
Most restaurant POS systems are easy to install, while others have an app you can download to your mobile device.
Follow these steps to use restaurant POS systems.
List all the menus and add them according to their categories.
You may also want to add the corresponding image for each item you sell at your restaurant.
Listing food items is arguably the most critical task when using POS systems. Thus, make sure that you include add-ons, sugar percentages, toppings, and other special notes.
Remember, the listing is the section customers see every time they order from you. I recommend you use professional-quality images and detailed descriptions for your menu.
In most restaurants, two or more people have to use a POS system, so you must set up multiple user accounts.
The type of POS hardware a restaurant needs primarily depends on its size and requirements. However, all solutions should have the following hardware.
- Cash drawer or cash register
- Card machine
- QR codes
- Scanner device
- Receipt printer
Both retail stores and restaurants need POS hardware to process payments via credit cards, cash, gift certificates, mobile devices, and more.
Many companies from the retail and restaurant industry also need POS systems to print receipts, scan bar codes, and store cash in registers.
If you’re still evaluating the most appropriate POS solution for your business, this list of POS hardware can serve as your starter kit.
- Connected devices such as tablets and computers
- A cash register to process and calculate customer transactions
- A credit card reader to accommodate customers paying through credit cards and contactless payments like Apple Pay
- A receipt printer to print out customer and credit card slips
- A cash drawer to store money
- A barcode scanner to quickly read a product’s details (price, stock level, etc.)
Companies with cloud-based POS systems can integrate with these platforms.
- Customer database
- Payment processor
- Accounting software
- Inventory management
- Employee management
- Ecommerce platform
Through integrations and add-ons, your data flows smoothly from one system to another, allowing each department to work toward common goals and minimize errors and gaps.
For example, businesses that integrate their point-of-sales systems and CRM solution can streamline their sales and marketing efforts, saving time and money.
CRM-enabled point-of-sale systems can also complete these tasks.
- Implement loyalty programs.
- Track customer spending.
- Personalize communications with customers.
- Streamline inter-departmental collaboration.
Aside from CRMs, businesses often integrate their point-of-sale systems with inventory management solutions, accounting software, and online shopping cart.
Modern consumers expect highly personalized communication from brands.
Businesses now consider CRM capabilities a necessity rather than a value-added feature.
Not all POS systems are the same, though.
If you’re looking for a CRM-enabled solution, choose one with these features.
Your customer database stores valuable information such as demographics, contact details, online behavior, and purchasing history. It allows you to improve customer retention and nurture relationship through personalized communications.
Businesses segmenting their customers can better understand their target audience, allowing them to create tailored messaging and promotions. For instance, a retail store can build a group of VIP shoppers who can enjoy exclusive perks.
Offering loyalty programs is one way to improve customer retention, generate sales, increase referrals, and promote overall growth.
Use third-party integrations if your POS system has no built-in loyalty offerings.
There are three ways to integrate different solutions with POS systems.
Check with your vendor and see if they have preferred add-ons or existing integrations with other solutions. For example, businesses with online retail stores can use their vendor’s recommended shopping carts.
Using the recommended integrations is generally easy because the POS vendors have already created the integration for the users.
If your POS software doesn’t have an existing integration with your preferred solution, you need to access your app’s application programming interface to change it.
The DIY route requires some technical know-how, so if you have little coding knowledge, you must find an expert partner.
Many POS system vendors have networks of experts and technology partners who can help you set up your system.
The right POS system can process and track sales and manage inventory.
Ideal functions will vary depending on your business needs, but your POS software should be able to set up a product catalog.
More advanced POS systems have the following features.
If you have online and physical stores, you need multi-channel inventory management to sync your sales and stock movements across these channels. Doing so prevents stockouts and missed sales opportunities.
A centralized stock control capability is essential for running multiple stores. It allows you to generate sales reports for each branch and transfer stock from one location to another.
Use this feature to purchase replacement stock automatically, minimizing stockout risks.
Ideally, choose a POS system with built-in stock-taking capabilities to stay on top of your inventory levels.
POS solutions allow businesses to create multiple user profiles, allowing different staff members to log in to the system.
It may seem like a minor function, but it’s vital because it helps managers detect suspicious returns and transactions.
Several POS systems also function as time clocks and trackers, letting employees use the system to log in. More advanced solutions have schedule-building tools, while others have integrations with third-party scheduling software.
Depending on your business type, you may also need to block early clock-ins (to control labor costs), track individual commissions or tips, or set permissions to give employees access to specific tools.
The best POS system for your business should automatically generate valuable reports, including sales by item, sales over a given period, items frequently bought together, and more.
You can access most reports in the management dashboard, although other systems provide reports through their POS terminal.
Each solution has customization features, built-in reports, and forecasting. Take the time to learn its offerings.
Many POS solutions allow users to download Excel or CSV format. This capability is ideal when dealing with a large inventory and complex accounting requirements.
POS reports can help you understand your business better, especially regarding sales.
You can quickly determine which items sell fast, which season or period is the most profitable, who are the best salespeople, and more.
Some POS solutions even allow you to build custom reports to track information that matters most to your business.
I hope the information I shared helped you understand POS systems and how they can help grow your business.
Use what you’ve learned in my article to pick the best possible POS solution for your brand.
If you’re opening a new online or brick-and-mortar store, you should learn how to set up a POS system.