Just how complicated should a business's Point of Sale (POS) System be? The answer to this question is based largely on the type of business seeking to purchase a POS system. Retail and hospitality merchants have greatly differing needs from a POS system.
Retail merchants require less complex systems than restaurant, hotel, or other hospitality business organizations. Many retail POS system designs will support matrixes that allow owners to categorize clothing inventory in terms of size or color. This allows the creation of a single price entry, while permitting the account manager to keep track of sales with respect to a particular color or size. Some retail POS system customers also want their system to support kits. This term is used to describe offers like "buy one get one free" or "four for five dollars."
In comparison, restaurant POS system customers are focused on efficiency. Restaurant POS systems are designed to transmit orders. This decreases the potential for error in a customer's order, and increasing the speed with which the order is relayed to the food maker. In fast food restaurants, these systems are set up so that a cashier can take a customer's order on a terminal at the front of the restaurant. This order is then displayed on a monitor visible to the person preparing the food. In restaurants with sit-down service or in fine dining restaurants, these POS systems are also used to maintain a table's check and to identify the server responsible for a given table.
Hotel POS system customers also require the ability to apply room service charges or dining room service charges to a guest's room check. Good hotel POS systems are capable of doing this, as long as they integrate properly with the software application system used by the hotel for property management. Owners should determine that these systems interface properly before purchasing a POS system.
Retail POS Systems
Whether a POS system will be profitable depends largely on revenue. Owners who gross at least $700,000 annually in sales will almost always benefit from the increased efficiency offered by a POS system. For those with revenues less than $700,000 annually, an electronic cash register will probably be more useful.
POS systems offer a number of benefits. First, they allow business owners to save money by decreasing shrinkage. This term is used to describe inventory that is lost or stolen or wasted. POS systems also ensure correct pricing for every inventory item. Finally, these systems will generate a sales report that helps owners to identify which items generate a greater profit margin when sold.
POS systems also generate a wealth of information. They allow owners to track particular items, list total sales, and generate profit reports. POS systems also make it easier for business managers to maintain profitable inventory and to track inventory. POS software also reminds a manager or owner when it is time to order more stock, as well as to store mailing addresses for the most profitable customers. This is helpful for targeted marketing campaigns.
POS systems can also help owners to increase their business's productivity. These electronic inventory systems decrease the amount of paperwork, as well as the hours invested in that paperwork, required to run a business properly. Of course, these benefits will occur only if the user is properly trained and understands the function of a POS system. Otherwise, even the best system will only be as helpful as any other cash register.
Be aware that power supply problems can affect the usefulness and stability of a POS computer system. If appliances or other devices are connected to the electrical circuit used by the POS system, power filtering may be necessary to prevent surges or noise from interfering with the system's operation. Many owners opt to install a special dedicated electric circuit that features a ground apart from that of the rest of the electrical system used by the business.
Computers and Software Applications for POS Systems
The main part of a POS terminal is the computer. Some owners opt to buy a separate computer and assemble the components of the system themselves, while others opt for a single purchase in a complete PC-based POS system. Buying the computer separately can be more expensive, and the seller won't be responsible for the whole POS system.
Additionally, the purchaser will need to ensure that the computer and POS system are compatible. Furthermore, using the system for any purpose besides POS is highly inadvisable; even though POS systems don't require much RAM to operate, a crash could be disastrous.
The software application system is also very important, so when a purchaser is ready to select POS system software, he or she should be aware of the following:
- POS Software packages: Most are very similar, and typically offer the same functions: item display, sale price, applicable tax, voids, payment method, and discounts. They also typically track inventory. Restaurant POS software is slightly more sophisticated and will also allow check creation, tracking orders by server, create a waiting list, and other restaurant-related functions.
- Internet Data Boards: These are available with some application packages, and allow owners to view data concerning the day's business via an Internet connection. This can be very useful for franchise owners or those who have businesses at multiple sites.
- Multi-management: This allows an owner to use certain preferences for all businesses, while creating variations for other preferences depending on the site location.
- Frequent diner program support: Often, restaurants use frequent diner programs to reward valuable return customers. Some also use this to track sales and direct target marketing campaigns to return customers.
A basic POS system is generally less expensive, and the cost of the POS software increases as more features are added. Since different software applications offer slightly different benefits and drawbacks, investigate everything carefully before making a purchase. For example, some retailers might find software that supports gift card transactions to be very important, while other owners might require POS software that interfaces adequately with liquor control devices.
The flexibility and versatility of the application are also important. For example, the ease of making programming changes for the POS software can be very important if prices or merchandise change quickly or frequently. Some software can be modified and set to take effect at a later date. This can be especially helpful during the busy Christmas season. Likewise, merchants who offer discounts or sales promotions will want to choose software that supports this.
The ability of the POS software to interface easily with accounting software can be quite important. Some applications will only generate the journal entries, while others will carry over directly to the accounting software. This may also be a factor of the type of reports produced by the POS software. Evaluate the reports and consider which will be most effective for your business. Finally, be sure that the POS software's ability to process credit cards functions properly with the business's current merchant account. Otherwise, the business won't be able to accept credit cards properly.
Compatibility between POS hardware and software is another important factor. Some computer users prefer certain types of operating systems or computers. Some applications will function on any system, which allows the purchaser to select his or her preferred system. Others require the use of a proprietary hardware system, so owners will have to return to those specific point of sale vendors to purchase any upgrades or extra equipment.
Software applications are updated regularly for security and ease of use. Most owners will eventually need to purchase hardware upgrades as well. While proprietary hardware can be a little more expensive sometimes, upgrades are always going to be necessary, and knowing where to get the upgrade, as well as knowing that the upgrade was designed to interact flawlessly with the software application, is often as valuable as the few dollars that could be saved with a generic upgrade.
Choosing the Right POS System Hardware
Typically, a POS system includes a display monitor, a cash drawer, a printer for receipts, and some type of input keyboard or device. Typical input devices include touch screens, scanners, handheld terminals, or programmable keyboards.
Touch screens are very easy to use and usually are marketed as a flat-panel LCD screen, which requires much less space and is much more convenient than a conventional CRT monitor. Some owners opt for overlay screens, but these don't work nearly as well and can break down easily. In contrast, a standard keyboard can be very helpful in supermarkets or large department stores. These POS keyboards are programmable and very easy to use; many even feature an internal magnetic stripe reader so that a credit card can be easily processed.
Some businesses, including restaurant owners newly purchasing POS systems, opt for handheld terminals instead. These allow a server to take an order at the table via a software application that uses handwriting recognition techniques. The order is transmitted more quickly, and servers then have more time to interact with and serve customers because they are not constantly running back and forth to submit a table's order.
Another popular input device is the POS system scanner. These scanners read the bar code on merchandise. Many different types of scanners are available depending on a business's needs. CCD scanners are popular with smaller retailers. These are inexpensive scanners that use charged-couple device, or CCD technology, to read a bar code, but must be held close to the merchandise to read the code. Alternatively, laser scanners will scan at a greater distance.
Businesses with higher volumes of sales may want to consider an auto-sensing laser scanner, which turns on and scans merchandise only when it is placed before the scanner. For very large businesses, such as supermarkets or large department stores, omnidirectional scanners are a must. These allow the cashier or the customer to scan most easily, because the scanner can read the bar code from any angle.
POS Receipt Printers
POS systems use printers to create a credit card payment slip or customer receipt. Some POS printers are also used for delivering orders to the kitchen or bar. POS systems use either dot matrix printers or thermal printers. Dot matrix printers are useful in warmer areas, such as kitchens, where thermal printers would not work effectively. The cost of ribbons and paper makes them comparable in expense to the thermal printer. In comparison, thermal printers are slightly more expensive, but they are quicker and offer increased reliability. They are often perfect for printing customer receipts or credit card payment slips.
POS Cash Registers
These are used for the storage of payment receipts, gift certificates, cash, or any other means of payment. Sturdily constructed drawers that open and close easily and will last for a long time are very important. The ability to replace parts is important, because some parts wear easily no matter how well they are made.
Additional Point of Sale System Hardware
Several other hardware devices are important in a POS system. For example, a customer display, which is often referred to as a pole display, allows customers to view the merchandise and pricing information. A magnetic stripe reader reads the magnetic stripe on the back of a credit card, which is essential for credit card payments. Owners of POS systems that do not offer this feature will probably want to invest in a standalone model for easier credit card transactions.
Some POS systems feature added security measures like fingerprint ID readers. This ensures that the employee logging into a system is the employee to whom that designated access code belongs. This helps prevent the theft of password information. Check readers are also important to some merchants. These systems use a technology known as magnetic ink character recognition, or MICR, to verify essential checking account information. Retailers who accept a high volume of checks should consider purchasing a POS system that includes this feature.
Consider these factors, as well as an item's durability, before purchasing a POS system. Some keyboards are spill-proof, while others are less sensitive to dust than others. Handheld devices can be dropped, so evaluate the durability of a device when purchasing it.
Warranty and Support for POS System Customers
Even a savvy amateur should avoid trying to construct a POS system independently. Too many software issues and equipment glitches can arise and leave the business electronically stranded. Spend the necessary money and have an expert install a tested system instead.
Before buying though, investigate customer support and warranty information. How long will the manufacturer guarantee the product against defects or equipment malfunctions? How difficult or expensive are repairs or replacements likely to be? How available is technical support? The answer to these questions will predict the quality and success of the system, and help to guarantee a happy business owner with happy customers. Additionally, many POS systems come from well known businesses including products such as the QuickBooks point of sale system, Intuit point of sale, and Radiant point of sale systems, so users will have an easy time finding point of sale system reviews of these popular offerings.
Some manufacturers offer multiple types of technical support. Some offer 24-hour phone support, while others offer phone support only during normal business hours. Other manufacturers offer remote Internet support, allowing technicians to provide remote repairs or maintenance quickly. A few even offer in-person support, in which a field service technician is sent to a business to make repairs.
In the event that repairs cannot be easily or quickly made, check to see if the vendor offers loaner equipment. This can be a valuable service, as it allows the business to continue operating as usual until the POS system is again operational.
Purchasing a POS system is a big investment, so take your time and carefully consider all the business details before buying. Choose the system that is right for your establishment, and make sure adequate customer support is available in the event of a problem. After it is installed, sit back and watch productivity and revenue numbers climb!