Point-of-sale (POS) systems are the core operating system of a successful retail business. The best POS systems help you manage stock, price products and accept and process a variety of payment methods securely and easily. Currently about 70 percent of retail businesses in the US rely on POS systems to ring up sales and manage their stores.
Point-of-sale systems can help manage every part of your retail business, including:
• Ringing up sales
• Quotes and invoicing
• Managing fulfilment of orders
• Purchase and receiving and managing inventory
• Pricing products
• Selling services
• Financial reporting
With so many POS options in the market, understanding how to choose the best POS system can be a challenge. This article tries to cover what you need to know about choosing the best POS system for your store.
What Is a POS System – and Can it Help You?
‘Point of sale’ can be simply defined as where sales are made, so a point-of-sale system is the system that helps you sell goods in your store. Prior to cheap computers, this was a cash register. As PCs became affordable, POS systems evolved into retail management software installed on PCs. With the introduction of the iPad, POS moved onto tablets and other mobile devices. Payment terminals became smaller and more mobile. Today, modern POS software is usually a cloud-based system that offer easy remote access, mobility and the ability to connect with and process payments on a variety of devices.
Retail businesses are increasingly upgrading their old POS systems to these more modern platforms – as the new POS systems offer a variety of advantages.
• Improve operations – Modern POS systems can help better manage your inventory and price your items. Having real time inventory instantly available can help you make better purchasing decisions.
• Flexible checkout and payment processing – Modern point-of-sale systems give you the ability to accept whatever form of payment your customers prefer. This helps to remove friction from the checkout process and makes the buying experience easier and more convenient for your customers.
• Capture customer data – Modern POS systems are great at capturing customer data. If you email receipts, you can capture customer email addresses for your marketing activities. This can help you better understand your customers behaviors and needs
• Simplify reporting and analysis – Modern POS systems can help you better analyze sales and provide insights into your business performance. Track everything from inventory to employee productivity.
For more information on what is a POS system and what it can do for you, please see our blog post What is a POS System?
What to Do Before you Start Your Search for the Best POS System for Your Needs
When starting your search for the best POS system, we suggest to first make an outline your retail business’s key requirement:
• Do you have any key business requirements – Each type of business is different. Are there any key requirements of your store or your retail vertical?
• What is unique about your business – Is there anything special about your business that will need to be managed by your POS system?
• Do you have any issues that the new POS system must address?
• Is this a replacement POS system or a new POS system? If a replacement, what did you like or not like about your current POS system?
• How do you ring up sales? Do you want to enter the item’s name in the system or scan barcodes? Do you need to print your own labels?
• How many people will be using the system? Do you need employee controls or remote access?
• What is the technical expertise of your employees? Will your employees be able to manage a complex system or do you want something simpler?
• Where will you ring up sales and take payments? Do you want a fixed POS station or something more mobile?
• What are your expansion plans? Will the best POS system for your current needs satisfy these future plans?
Things to Consider When Deciding on a New POS System
Once you have analyzed your business requirements, the next step is evaluating which POS systems best meet your needs. Some things to consider when evaluating the best POS system for you needs include:
Ability to Satisfy Key Requirements – Most POS systems claim to have a lot of features. However, all POS systems have differences, either better quality features or more of the features that are critical to your business. By far the most important thing is to find a POS system that meets most if not all your critical business needs. Your system should make things easier for you and not cause you to do time consuming workarounds or manual tasks to compensate for shortcomings in the POS system. Make sure the POS system you choose has all the features for your business needs.
Hardware Requirements – Your POS hardware requirements will depend on the size and type of your business. If you are a small retail start up, perhaps a tablet, card reader, and cash box will be adequate. If you have a larger retail store, you may need multiple POS and payment terminals, receipt printers, barcode scanners, and even an inventory scanner. Some POS companies sell proprietary all-in-one systems that can only be used with their software. Square does this. Others sell cheaply made pre-configured packages or kits that will not hold up over time. Some systems are written specifically for iPads or Android devices. Make sure you understand the cost and form factor of the hardware recommended or required by your POS provider.
Cost – The cost of the system is also important, as you need to maintain your margins. Be sure to consider both upfront costs and ongoing costs.
• Upfront Cost – Upfront costs include hardware costs, network security and configuration, training, data conversion.
• Ongoing Costs – Also consider the ongoing costs. With modern POS systems, this is usually a monthly subscription. If you are intersted in a Free POS system, please see our article Choosing the Best Free POS System.
• Card processing fees – Typically, processors charge a small percentage of the total sale amount, plus an additional, nominal flat fee. Some POS vendors, such as MicroBiz offer payment processing options. Other POS vendors, such as Clover are owned by payment processors and do not offer payment options. processors, such Be sure to lean towards a POS provider that gives you several options for integrated processing. If your POS vendor only offers one option, you will be stuck the paying whatever fee that charge, unless you are willing to start over with a completely new POS system.
Start Up Time and Resources- Understand what is included for free when starting up and what costs extra. Does the POS system provide access to catalogs or allow the easy import of data? Is training included? How difficult is it to install and configure the software?
Security – Security is essential, particularly around payments. Any POS system being considered should be compliant with security standards established by the Payment Card Industry (PCI). Be sure to understand what steps the POS system vendor has taken to secure the card payments, such as a semi-integrated connection between the terminal and the POS system and end-to-end encryption of data exchanged between the terminal and the processor.
Simplification of Tasks – The other questions are around what tasks your new POS system can help you simplify. A good POS system should help you simplify many redundant tasks, such as:
• Buying new stock: Does the POS system always tell you what’s in stock and help you order items from vendors?
• Merchandising: How does the system help with pricing and marking items for sale?
• Printing barcode labels: Where can you print price tags from? Can you print tags in bulk?
• Managing returns: Is there an easy way to take returns from customers?
• Accounting: Is there an integration with any popular accounting systems? POS solutions that integrate directly with accounting systems such as QuickBooks can help avoid manual entry of data into two systems.
• Managing employees: Is there an employee time clock to keep track of employee time and hours?
• Managing inventory: Does the POS system tell you what is in stock and at what location?
Ease of Set-up – Your POS system should also be easy enough to set up and use so that you do not need to refer to a user many manuals or call tech support all the time.
Quality of Support – Be sure to find out how support is offered (Email, chat, Phone, online) and how much it costs. Also understand what hours support is offered. A great place to check on quality of support is online reviews. Does the company have positive or negative reviews for its support? Be sure to research what other customers are saying about the company, its support and its products.
Reputation of Software Vendor – When you purchase a POS system, you are also entering a business relationship with the company selling the POS system. Is the POS vendor financially viable? Is POS its primary business? Many sellers of POS systems are payment processors, which may be more focused on selling payment services than whether the POS software meets the needs of your business.
Industry Experience of Software Vendor – What experience does the vendor have serving your specific retail vertical? Is the company a vendor a processor, reseller or software developer? Resellers and payment processors may be reselling a system developed by a third party, so will not have in-depth knowledge of the software or the ability to fix issues. Software developers tend to do a better job dealing with technical issues or enhancements to the software.
Reporting and Analytics – Modern POS systems do a great job of gathering and organizing operating data. Many also offer flexible reporting to help you analyze operations and better run your business. Solid reporting critical. But be careful to avoid POS companies that are overselling ‘AI’ solutions that are offered as expensive add-ons. Much of this information may already be available in standard reporting. Any POS system that you choose should have detailed sales reports and a dashboard that provides info on sales in real time.
Picking the Best POS System for Your Business
Now that you’ve considered all the key features of the best POS system for you, you should focus on finding the best solution for you.
Fit With Budget – The system you pick should fit with your budget. No sense burdening your profits with an unnecessarily expensive POS system. Conversely, a free POS system may make your employees very inefficient. Cloud-based POS systems usually have different pricing tiers, where the cost depends on features and integrations and/or the number of stores and register terminals. Additionally, consider all costs – including the cost of processing fees associated with the POS system.
Ability to Scale with Your Business – Hopefully, your business will grow over time. Be sure to consider your future needs – one, five, and 10 years from now. Be realistic in your growth plans, as being overoptimistic may cause you to select an overly expensive or complex system. But be sure to think about how your POS system will help you grow.
Pace of New Capabilities and Features – Does the POS system allow upgrades and what is the cost? Are there paid modules or integrations available to help you grow? Will the cost of these add-ons materially increase the cost of the POS system?
Apps and Add-ons – Are there are apps or add-ons for the POS system that can help you better run your retail business. Does it have a app marketplace or a set of native integrations to popular third-party apps that integrate with the POS. The top POS systems integrate with popular 3rd party apps to expand the capabilities of their POS system and automate the exchange of data between the systems managing different parts of your business. Check to see if the point-of-sale system integrates with 3rd party software apps that you are already using. Be sure to understand exactly how the integration works as well as any limitations – as all integrations work differently.
Check References – Once you have narrowed down your choices, check in with other businesses that are using the POS system. You can also ask the vendor for references or ask the sales reps of key vendors to check around. Another great place to check on quality of the POS software system is online reviews. Does the company have positive or negative reviews for its service?
Sign up for a Free Trial or Online Demo – Most POS system vendors offer online demo demos or free trials of their POS software. These activities let you see the software in action – and allow you to test for specific features and learn how the POS system operates overall. Be sure to make notes of whether the software is missing any critical feature or if there is a particular feature that you do not like.
Be Sure to Choose the Best POS System for Your Business
A POS system is the mission critical application for many small to mid-sized retail businesses. As a result, be sure to consider all major requirements of your business before deciding on what is the best POS system for you.
