If you run any sort of retail business, you are almost certainly already using some sort of point of sale (POS) system. The old-fashioned cash register, limited as it is, is a very basic POS system. However, current computer technology means today’s POS systems can be extremely powerful, allowing adaptation to many different business models and maximizing flexibility in operations.
In addition to reporting that can present sales data in a dizzying array of formats, you can introduce such innovations as loyalty programs with specialized pricing. Though it might seem daunting, setting up point of sale software is actually relatively easy.
It is the software that makes these POS systems so powerful. A cash register is, after all, little more than an adding machine with a cash drawer. Tying in even basic barcode scanning and database integration represented a tremendous leap forward and labor savings.
Current software can enable far more customization. Happy hour pricing in a restaurant, for example, can be automatically applied to all eligible items during set times (and even on particular days) without any additional action by the server.
Many POS systems come as packages of hardware and software; this is especially true for restaurant systems. However, it is possible to purchase standalone POS software that will run on any standard laptop or desktop computer (assuming it meets basic compatibility requirements, of course).
Available accessories such as cash drawers, customer displays, barcode scanners, and card readers can turn one of these computers into a full-fledged POS system. For example, Intuit, the maker of QuickBooks accounting software, offers QuickBooks Point of Sale, a POS software package along these lines with numerous optional accessories.
As you evaluate POS software systems, one factor to consider is credit card processing integration. While it is certainly possible to use a standalone terminal with POS software, integration provides a substantial time savings. The checkout process will be faster since there will be no need to ring the sale in the POS system and then enter the card transaction information into the terminal.
Daily closeout will also be faster and easier, since reconciling the day’s batch against credit cards tendered will be almost automatic. Just eliminating the occasional headache of tracking down a discrepancy caused by data mis-keyed in either the terminal or the POS system will be a boon.
Credit card processing can be integrated with POS software in three ways. One is full integration, meaning the POS software has a “virtual terminal” built in. The main limitation is that software manufacturers tend to require you to use their proprietary merchant processing service, which limits your options.
The second is dedicated terminal software that resides alongside the POS software on your computer. This option is fine as long as the two pieces of software can talk to each other, and as long as they continue to do so through future upgrades of the terminal software, the POS software, or both.
The final option is the newest: a web-based payment gateway that requires no software at all on the local machine. The issue here is internet connectivity, since any web-based system naturally becomes next to useless if connectivity is lost.
Another step in POS software setup that can be a huge time saver is integrating the POS system with your accounting system. If these two systems can communicate, it eliminates the need to manually enter or transfer data from one to the other.
Your POS system has lots of information that your accounting system needs, from changes in inventory due to sales and returns to daily sales reporting to the breakdown of the day’s sales by tender method. (Cash and checks will go to the bank for immediate deposit, of course; credit card sales will deposit a couple of days later and have to be tracked separately and reconciled.)
Having to manually handle this data takes work and introduces lots of opportunity for error. If, on the other hand, most of it will move automatically, you’ve just saved yourself lots of time (and we all know time is money.)
Even if you handle some or all of the bookkeeping for your business personally, your time would be far more valuable to the company if you spent it building the business instead of crunching numbers. Computers are great at handling numbers, after all, so why not let them do what they do best?
POS software is a great way to enhance the productivity of your retail business. Integrating a carefully-chosen POS system with credit card processing and your accounting software will bring you even more benefits. You’ll be pleasantly surprised at how easy it is to set up a point of sale software system.
About The Guest Author: Peter Real is the Director of Development for a software company named Direct Pay Systems. Direct Pay Systems helps companies of all sizes implement software solutions custom-tailored to integrate their sales, bookkeeping, and merchant services.
Cash Register Photo via Shutterstock