Point of sale (POS) systems have come a long way, and businesses that want to stay ahead are choosing these systems over traditional cash registers. This is because today's POS systems go beyond just processing transactions; they are also packed with features that can help boost sales, improve staff performance and make business owners' lives easier overall. To help business owners better understand POS systems, here is a primer on what to look for and how to find the best option for your business. For a more in-depth look at POS systems, check out our Credit Card Processing Buyer's Guide and our roundup of the Best POS Systems.
Parts of a POS system
In addition to accepting credit cards and cash payments, POS systems offer all-in-one solutions that let businesses be more efficient or even run their entire operations from their POS software. Advanced features include inventory management, customer relationship management (CRM), budgeting, analytics and reporting, and marketing tools. The systems can also connect to third-party apps and solutions businesses already use, helping to save time and prevent headaches by automatically syncing data in real time as sales occur.
A POS system consists of two main parts: the hardware and the software. The hardware is what the employees and customers use to conduct transactions. Hardware can be as simple as a tablet (typically an iPad) or mobile phone paired with a credit card reader, or as complex as a full terminal complete with a monitor, cash drawers, barcode scanners, credit and debit card scanner, keyboard, mouse, and printer. [You can see our recommendations for the best POS system for retailers here.]
For restaurants, hardware packages typically include a touch-screen monitor, terminal, receipt printer, cash drawer and card reader. Like retailers, restaurants also have a mobile POS option — typical setups consist of an iPad or iPad mini, cash drawers, and a kitchen printer. [You can see our recommendation for the best restaurant POS systems here.]
While these are common packages, most providers also give business owners the flexibility of picking and choosing only the hardware they need, which helps keep costs down.
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The software is what runs the system. This ranges anywhere from a simple mobile app to cloud- or Web-based software to on-premise programs that are installed into terminal devices themselves. Typically, each provider offers its own software package. However, the packages all have some of the same features, including being compatible with most accounting software to help with budgeting. In addition, some software packages can keep track of inventory, process gift cards, create purchase orders, manage vendors and customers, and track employee performance.
In addition, each specialty package, such as the one for restaurants and bars, offers its own unique features. Examples for a bar may include the ability track bar tabs, split checks and manage special pricing for certain events, like happy hour.
What to look for in a POS system
There are a wide variety of choices for business owners considering transitioning to a POS system. Among the most important things to look for when choosing a system are:
- Terminal and peripherals: The best POS providers offer mobile and touch-screen systems, as well as barcode printers, customer displays and PIN pads.
- POS software: Each POS system is only as good as the software that runs it. It is critical that business owners choose a system that offers software with the features they are looking for. This depends on a business's industry and unique needs, and whether the company is choosing a traditional or mobile POS system.
- Mobile and wireless technology: At the very least, business owners should want a POS system that offers wireless table-side or inventory tools. The best providers offer software that is compatible with most Apple and Android mobile devices.
- After-purchase care: Good customer support is a must. A POS system becomes the brains of a business, so when the system has a problem, it can bring the whole operation to a standstill. Finding a POS system provider that offers afterhours telephone support, installation assistance, training and remote support should be a priority for business owners.
The best POS systems
With so many different options for POS systems, it can often be hard for business owners to figure out which systems are the best. To help owners find the right system, Business News Daily has done extensive research and analysis to compile this list of the best POS systems for small business. Our list include the best POS system for retailers, restaurants and small businesses overall, as well as the best mobile POS system for the iPad. Additionally, we have included a roundup of dozens of POS system vendors that we considered for our best picks.
Updated on June 16, 2015. Additional reporting by Chad Brooks.