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What is POS software?

Category: Sales Software

pos2Today thousands of companies, both small businesses and big enterprises, are using are using a point of sale (POS) software in order to improve the efficiency of their business. As a matter of fact, you can choose from a wide range of top POS software services. These services can offer both basic solutions and features  as well as very complex, advanced tools. Most of these will also give you the option to try out a free demo or a free trial version of the product.

In addition, based on an online review of what are POS software programs available, there are at least about 30 vertical markets that software providers have customized and tweaked their POS software solution to handle.

The term however (“POS software”) can be a little bit deceptive since many POS software programs do more tasks and not just “point of sale” duties. This is the reason why some use the term “retail management software” instead of “POS software”. In addition, each POS software solution can be drastically different from another. The term is merely a phrase that software providers came up with when describing the software.

pos2

What is POS software?

So, just to be clear, what is POS software? What is this term that I need to know about, and why is it important for my business?

To be quite simplistic about it, a POS software program is used at one’s office or business location at which goods and services are sold to clients or customers. In short, POS software is like your business cash register—only better.

When your business uses a POS software solution, all your customer sales and transactions are made and recorded using your computer. You basically inform your computer the goods and services you are selling and giving, their selling price, as well as the quantity sold. The software program calculates the total costs, even tax, and informs you if you need to give back change to the customer. In addition, it also records each sale you do and tracks everything.

Since the program remembers all the sales you made, it can then automate various kinds of tasks and features for you. For instance, the solution can calculate your total sales for the day, the total sales tax you have, and even the number of times you sold an item or service during a certain time period.

This is POS software in its barest form. However, there can be a lot more to it.

Read more:  Lead Management Software Benefits That Are Really Important For Small Business

Nowadays, a lot of POS software options can become your complete and fully-functional retail management system that can automate and streamline major areas of your business. A POS software solution might include the following features, among others

  • Point of Sale
  • Accounts Receivable
  • Accounts Payable
  • Inventory Control
  • Shop Management
  • Automatic Purchase Order Creation
  • Customer Tracking and Follow Up
  • Automatic Price Updates
  • Payroll
  • Bar Code Scanning
  • General Ledger
  • EDI (Electronic Ordering)

An example of a POS system

What are some common misconceptions about POS software?

Many business owners tend to think that because POS software tools merely track your business inventory and books, all such software systems basically are the same thing. This is one of the most common misconceptions about POS software. Every solution has different functionalities, features, benefits, weaknesses, as well as intended uses. You may think that these differences are merely little, but they can have a big impact on your business. For example,

When you start your POS software evaluation and screening process, you will immediately see some very distinct differences.

Finding the right POS software, therefore, is important to any business, giving you a better level of control when it comes to operations, improving efficiency, increasing profits, and fine-tuning your business model. Aside from being more efficient compared with cash registers, a POS software solution allows you to make detailed reports, helping management to craft business decisions that are more informed. When transferring from the traditional cash register to a POS software, you need to consider your business needs and check out from the market which POS system can offer you the right solutions. The business benefits and return on investment can make buying the right POS system well worth your company’s effort and time.

What are the benefits of using a POS system?

  • Significant returns on investment. A POS system can help you significant returns, especially if your business has expected big annual revenues.
  • Huge money savings. A computerized system cut reduce inventory shrinkage due to waste, theft, and misuse. A POS solution can help assure that your items or products are sold for the correct price. It can also give you sales reports that are more detailed, helping you focus on the higher-margin items.
  • Detailed information. A POS solution can immediately tell business owners the number of units of a particular product or service has been sold in a day (or say, last month or last week), how much income each software use has in his or her cash drawer, and how much of it is considered profit. Sales reports that are detailed make it easier for you to evaluate the stocks you have, which stocks you should have more, and which you should order less. With an efficient POPS system, you can spot sales trends, track inventory, and use historical data to forecast business needs better. In addition, a POS software program can alert you when stock is becoming low. The solution can also allow you to get the names and addresses of your clients and customers as part of your standard business transactions. You can use this information later for targeted incentive and advertising programs.
  • Increased productivity. POS software systems can drastically reduce the time you spend analyzing sales figures, doing inventory, and tracking important but otherwise repetitive paperwork. The savings not only include time but also your peace of mind.

By Nestor Gilbert

Senior writer for FinancesOnline. If he is not writing about the booming SaaS and B2B industry, with special focus on developments in CRM and business intelligence software spaces, he is editing manuscripts for aspiring and veteran authors. He has compiled years of experience editing book titles and writing for popular marketing and technical publications.

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