The type of system you purchase will depend on your specific goals. Most businesses use POS systems to improve efficiency, save money, and manage inventory and information better. Though the reasons a business may choose to use a POS system will vary, there are some benefits to using the system that are available to both large and small companies.
Improved Transaction Processing
Well designed POS systems can process transactions quickly and with few errors. A good example is the POS systems used by most restaurants. Without a system, servers usually take orders by hand and physically “place” the order with the kitchen. If the server has bad handwriting, forgot to write something down, or is very busy, all aspects of the transaction will be impacted.
A POS system can also be linked to a merchant processing account to make transaction processing even faster. By combining the cash register functionality of a POS system and credit card processing functions, employees can complete transactions in less time and in less steps, reducing the margin for error.
Electronic Record Keeping
POS systems allow for better record keeping than traditional cash registers. For one, most information about transactions can be stored electronically, eliminating the need for employees to tally sales themselves or save receipts. All relevant information about a transaction can be captured and stored by the system: the employee that made the sale, the sale items and amount, whether the sale was part of a promotion or special offer, and the date and time of the transaction. If you use a commission based structure or accept tips, this can be especially helpful for computing pay amounts and employee tax withholding totals.
Inventory and Information Management
If you own a retail store, you already know the importance of inventory management. The best way to know when to reorder is to know how much of a product you have on hand. Service businesses like spas, salons, and hotels can also take advantage of the information management features a POS system provides. Most POS systems have reporting functions that allow managers or owners to generate information in an easy to read format, for example, bottles of shampoo used per employee per month, or percentage or rooms booked at least three days in advance. The more accurate information you have, the better you can make strategic decisions about ordering, sales promotions, hiring, and staffing.
Tracking Sales and Promotions
POS software allows a business to monitor and manage promotions and special offers as they occur. Bars that offer a “Happy Hour” can generate a report after the specified time is over to determine how many drinks were sold at a discounted price, and if those same guests arrived early and purchased drinks or food at full price before the promotional time began, thus calculating the actual profit of the promotion. Sales can be similarly tracked, allowing a business owner to truly gage whether selling more products at a steeper discount is worthwhile. A system can also give you the ability to track customers, so you can see which customers spend the most during given times. The more information you have, the more targeted your marketing efforts will be.
The number one reason most businesses use a POS system is cost savings. Whether you are keeping track of your inventory, monitoring employee sales efforts, or saving time by processing transactions faster, a POS system will ultimately save your business money if used correctly. Good POS systems cut down on theft and unauthorized employee discounts, because inventory is reported accurately and with regularity. You can make business decisions on real-time data, and plan better for future promotions and sales.