What is POS?

Retail shops and hospitality businesses come in all different shapes and sizes. You've got your brick-and-mortar clothing stores, your online boutiques, your full-service restaurants, bars, food trucks, and hotels. However, there's one thing they've all got in common. That thing? Every shop needs to have a solid point-of-sale (POS) system.

Your POS system has an important role to play in your business. It drives your entire checkout process. You can use it to ring up sales, take payments, and make sure that all payment transactions are processed efficiently. 

But what is a POS system, exactly? 

How does it work? 

And where do you start with picking one for your business?

In this complete guide, we’re giving you the lowdown on the inner workings of POS systems. By the end, you'll know what steps to take when checking out your customers, and the important role that POS solutions (like inventory management and customer relationship management) play in managing your retail or hospitality store’s back office operations. 

Point of sale definition

A point of sale system (sometimes called a POS machine or point of purchase system) is the hardware and software used to make in-store and online sales at your business. It's also your record-keeping solution for transactions, letting you to track revenue, customers, stock levels, and more. 

POS systems can come in a lot of different shapes and sizes. Some people use a computer, along with some other hardware like receipt printers and cash registers. Others use mobile devices like ipad solutions. The right POS solution for you will depend on your business needs and the experience you want to give your customers.

Check out our 'How to use a POS system' guide for more information!

Evolution of  POS systems 

Modern POS systems have come a long way from old-fashioned cash registers (you know, the ones that make the really nice ‘cha-ching’ noise as you open the drawer).

These days, they're offering a whole range of services beyond just processing sales.

One big change is how they've gone digital. Instead of clunky hardware, modern POS systems often run on sleek tablets, computers or countertops, making them more versatile and easier to use. They've also gotten smarter, with built-in features like inventory tracking and real-time sales reporting, giving businesses a clear picture of their operations at all times. Plus, they're more connected than ever, integrating with other software and tools to streamline tasks like accounting and marketing.

Benefits of using a POS system in your business

Once you’ve worked out the ins and outs of using your POS system, your company will see huge benefits like:

• Faster checkout experience: A modern retail POS system makes the checkout process quicker and easier for both your brilliant team of cashiers and your customers. This means that your employees can spend more time and energy on connecting with your shoppers, instead of dealing with tech issues. For example, with Epos Now Payments you can save up to four hours a month during sales.
• Greater visibility into your performance: A lot of the more modern, cloud-based point of sale systems have built-in data and analytics meaning there's no need for manual data entry. This means that you'll be able to generate reports on a lot of different areas of your business. We're talking inventory data, sales data, employee data and customer data, all collated into an easy-to-read report.
• A better handle on your inventory: As a retailer, your main focus is on your inventory, which means the physical goods you sell. It's super important to keep track of what you have in stock and manage it effectively. Luckily, with the right POS system, keeping tabs on your inventory is totally possible. Look for a POS solution that helps you with inventory management tasks like adding products one by one or in large batches, ordering and getting new products into your inventory, and doing regular counts of your inventory to make sure everything adds up.

POS equipment 

Now that you've got a really clear understanding of what a POS system is, let's take a look at the different elements that make them up:

What is point of sale software?

POS software, or point of sale software, is basically the programme that helps run all the tasks you need to make when you’re making a sale. Think of it as the brain behind the checkout process. At its most basic level, POS software can be used to work out how much each transaction costs, keep track of your sales, and monitor inventory.

But there’s more to POS software than just the basic functions. Most POS systems (well the modern ones at least) come with advanced features that can really enhance your business operations. Take Epos Now, for example. Our POS solutions offer features completely tailored to your specific business. We're talking loyalty programs that keep your customer satisfaction high and keep them coming back, reporting capabilities that give you detailed analytics on your business processes, employee management tools and other handy apps.

What is point of sale hardware? 

POS hardware refers to the physical components of your POS system. Think of POS hardware as the body, while your POS software is the brain. Check out some of the most common hardware out there below:

• POS terminals – This is the device that your POS software runs on.This may be a desktop computer, a laptop or mobile device (like an iPad, tablet POS, or smartphone). POS providers like Epos Now offer specially designed, easy-to-use hardware.
• Credit card terminal – Suppose you accept credit card payments (and by the way you absolutely should, check out our blog on why), you'll need to have a credit card terminal. This will work to facilitate the payment processes. The type of credit card reader you'll need depends on your POS software and your terminal. Talk to your POS system provider to make sure that you’re using card readers compatible with their POS solution. 
• Barcode scanner – If you're a retail shop with a large catalog of products, a barcode scanner will likely be needed. With it, you won't have to manually type in product numbers or search for products. Instead, you'll just need to scan the barcode and your POS system automatically adds the product to the transaction. 
• Receipt printer – A lot of shoppers will need physical receipts. Because of this, you'll need a device to print those much-needed receipts. When connected with your POS system, the receipt printer automatically produces receipts once you've completed the transaction.
• Cash drawers (AKA cash register) – This is where your cash is held. A cash drawer or cash register stores your legal tender so you can collect payments and hand out change.

Considerations to choose the right POS terminal for your business needs 

There are hundreds of POS systems out there, so do you choose? In this section, we'll run you through everything you need to know about picking out the best POS system for your company.

Different POS machines for different business types 

One of the first things you're going to want to consider is the type of POS system you want. Gone are the days when you just have a simple, old-fashioned cash register. There are now so many different types of POS systems out there like:

• Cloud-based POS systems: Like the Epos Now Complete Solution, this POS system stores data in the cloud, allowing access and changes from anywhere.
• Mobile POS systems: Portable and modern solutions where the POS software operates on a mobile POS system, like tablet POS devices or smartphones.
• Legacy POS systems: Also called on-premises, these are countertop POS systems that operate differently from newer systems. They store data locally. This means that all of your transactions and info are saved on specific devices within a closed network.
• Multichannel POS systems: These are systems for businesses that work across lots of different channels, like physical stores, online platforms, and mobile apps.

Check out our complete 'Different types of POS systems' guide for more information and to help you decide.

How easy is it to integrate the POS solution into existing business tools? 

Another consideration is how simple and straightforward it is to integrate the POS solution into your business tools. With Epos Now, for example, this is extremely easy. Our POS system is designed to enhance your business operations and make managing different aspects of your business easier. Here's how it can fit into your current setup:

• All-in-one package: Epos Now offers a complete EPOS solution that includes a sleek POS system, a built-in printer, a payment terminal, and a cash drawer. This setup ensures that you have everything you need right out of the box.
• Easy setup and onboarding: With Epos Now, setting up and training your staff is quick and simple. The system is intuitive, so you can have your team up and running in minutes. Their 1-on-1 onboarding ensures that you and your staff are comfortable using the system from day one.
• Real-time insights and reporting: Access vital business insights on-the-go from any device. Epos Now offers real-time reporting on staff performance, customer behavior, sales, margins, and stock levels. This lets you to make informed decisions no matter where you are.
• Multi-channel ready: Epos Now supports online, delivery, and collection services. This means you can synchronize your online and physical locations, reach more customers, and offer convenient services like Click & Collect.
• Seamless integration: The system can connect to over 100 apps, including leading accounting software, CRM tools, and payment systems. This flexibility ensures that you can continue using your preferred tools while benefiting from the advanced features of Epos Now.
• Industry-specific solutions: Whether you’re in retail or hospitality, Epos Now offers tailored features to meet your specific needs. From real-time inventory management and powerful reporting in retail to table and kitchen management and online ordering in hospitality, the system is designed to boost efficiency and customer satisfaction.
• Reliable support: Epos Now provides 24/7 technical POS support and unlimited training, ensuring that you always have the help you need. Their expert advice and resources, like a comprehensive blog portal, help you get the most out of your POS system

Compare POS providers and choose the best POS plan for you

When deciding which POS provider to go for, consider:

• PCI Compliance: Look for POS providers that adhere to Payment Card Industry Data Security Standard (PCI DSS) requirements to safeguard sensitive information.
• Support: Evaluate the level of support offered by each POS provider, including availability (24/7 support is ideal), response time, and the quality of assistance provided.
• Features and functionality: Compare the features and functionality offered by different POS providers to ensure they meet your business requirements. Think about things like inventory management, reporting capabilities, integration with third-party applications, and scalability.
• Cost: Consider factors such as setup fees, transaction fees, monthly subscriptions, and any additional costs for hardware or software upgrades.
• User experience: A user-friendly interface can improve efficiency and productivity in day-to-day operations. So make sure your POS provider has one.

POS system’s best practices for your business operations

To get the most out of your POS system, follow these best practices:

• Make sure you've got a solid POS: First, be sure that your POS system meets your needs and the needs of your business. Look at your current processes, including checkout, inventory management, and reporting—and choose a POS that supports these workflows. If you need to accept mobile payments, for example, then pick a POS that works with the right credit card terminals. Don't forget to also consider your back office and operations. Do you have the data to make informed decisions about inventory and sales? Can you integrate all parts of your business? Answering these questions will help you identify the capabilities you need in a POS system, so you can find the best solution for your business.
• Train your team: Got a POS system you already know and love? Make sure that you and your team know exactly how to use it fully. Get training and support from your POS vendor. Check if your provider offers training sessions. These are great when you're starting out, as they help you get familiar with the system's features and how they fit your business. For instance, Epos Now offers premium onboarding, account management, and other services to help you maximize the software. They also provide 24/7 support, so you can reach out anytime, day or night.
• Monitor inventory: A good POS system can track your inventory in real time. This means you always know what’s in stock, what’s running low, and what’s selling well. Use this feature to avoid stockouts, which can lead to lost sales, and overstocking, which ties up cash in unsold goods. Set up alerts for low stock levels so you can reorder in time. Regularly review your inventory reports to spot trends and adjust your ordering. This helps you keep your shelves stocked with the right products, keeping customers happy and sales steady.