How to Set Up a POS System

What is a POS system?

A point-of-sale (POS) system is a combination of hardware and software that allows businesses to process orders, facilitate transactions and manage their operations. Many POS systems can be customized to suit a wide range of business sizes and industries. For example, businesses that mainly handle online orders might use only POS software. Brick-and-mortar setups, such as restaurants and retail shops, might use a mix of hardware devices and software programs.

Types of POS systems for small businesses

Cloud-based systems are the easiest POS systems to set up. Tablet POS systems are usually cloud-based and require reliable internet access. Others are hybrid systems that use a local server but save your data to the cloud, which allows you to access back-office features like reporting online from any device with a browser. [Interested in seeing our findings? See what we think the best POS system is for your business.]

How to set up a POS system

Once your tablet is connected to your internet, follow these steps to simplify your POS installation.

• Download the app. Visit the App Store (for Apple devices) or Google Play Store (for Android devices), and download the app for the POS system on your tablet.
• Log in to the app. Open the app you just downloaded. If you already have an account, enter your login credentials. If you’re new to the service, follow the onscreen prompts to create a new account.
• Plug in the card reader. Depending on the POS system and card reader model, you may need to plug the reader into the device’s headphone jack or lightning port. Some card readers also connect via Bluetooth. Your POS system’s instruction manual should tell you how to pair your card reader with your device.
• Connect the receipt printer. These devices can connect to your POS system through a wired or Bluetooth connection. If you’re using a wired connection, an Ethernet cable provides a faster, more stable link. Pair the printer with your device via a Bluetooth connection if you’re looking for a more flexible option.
• Connect the printer to the cash drawer. Many POS receipt printers have ports that can send a signal to open your cash drawer. If your cash drawer is compatible with your receipt printer, your manufacturer’s instruction will provide specific instructions for connecting it.
• Connect the barcode scanner to the tablet. If you’re using a barcode scanner, connect it to your tablet or smartphone via Bluetooth.

Some systems may require you to use a specific router. For example, with iPad-specific POS systems, you need to use an AirPort Express or AirPort Extreme router. If the system is a hybrid that uses the cloud for data storage and back-office tasks but runs on a local server, you’ll also need to connect a computer to the system.

In addition to hardware, a complete POS installation includes setting up the software for your system. After you log into your account, go to the Settings menu and configure the account settings to your liking. Here are some additional things you can do:

• Customize receipts with your business name, logo, address and other information, such as your return policy.
• Set up sales tax rates.
• Add your inventory, along with product names, prices, descriptions, brand names, supplier names and quantities.
• Decide whether to require or skip signatures for transactions.
• Set up tipping options, if appropriate for your business.
• Add employees and assign roles or manage permissions.
• Connect to third-party integrations. 

You can then add or import information about the items you sell into your POS systems. If you have a retail store, you’ll need to create a product catalog and add your inventory. If you have a restaurant, you’ll need to create menus and a floor plan and add your inventory. You may also want to add contact information for your customers and suppliers. 

If you’re switching systems and want to migrate your data, or if you have many items to add to the system, look for a downloadable spreadsheet template that you can copy and paste your product data into and upload to your new system.

How different industries use POS systems

Depending on the type of company you run, such as a hospitality business or a restaurant, you might have a different type of POS system or different features to set up. 

“The primary use … of a point of sale is to accept payments,” said Cristopher Carillo, co-founder of Allied Payments. “The differences in systems lie in the ways the business utilizes the other features of the POS. One of the most common functions is sales management. Knowing what is being sold and when can help businesses continue offering customers what they want.” 

Another common use for department stores, bars and liquor stores is inventory management, Carillo added. Merchants can enter the number of items in stock and track the products sold. That way, they’ll be aware if stock of products or ingredients drops low. 

Other features to consider, Carillo said, are those that accept or account for coupons (typically used at grocery stores) and track customer purchasing habits for loyalty programs and promotions.

“For grocery implementations, you will see the addition of a scale that usually also includes … two scanners — one horizontal and one vertical,” added Jeff Hall, senior consultant at Wesbey Associates LLC. “Restaurant implementations lose the scanner and usually the keyboard, with the display functioning as the keyboard through a touchscreen. In hospitality, the register also loses the scanner but adds a mouse. For traditional brick-and-mortar retail, you get the register, scanner, cash drawer and payment card terminal.” 

Zachary Weiner, chief financial officer of Discover NIGHT, recommends restaurants use POS systems with counter-to-kitchen order systems for better accuracy. 

“When a customer replaces an order at the counter, it automatically transmits the request to the kitchen for staff to prepare,” he explained. “This improved system is more accurate and less prone to human error, which helps improve customer satisfaction and boost employee morale.” 

Because these systems offer so many uses and features, you need to protect both the hardware and software of your POS systems so you don’t put consumer data at risk. 

“Because of the multiuse of the POS device in the retail, restaurant and hospitality industries, we need to be concerned about the security of that device, since it can have internet access as well as access to corporate networks, websites and applications,” said Hall. “These POS solutions are at risk of becoming infected with viruses and malware if they are not properly secured and protected.”

Hall added that business owners should be careful in how they protect payment card terminals from skimming devices. He recommends inspecting terminals regularly to ensure no skimmers have been installed.

Options for POS installation

Although setup requirements vary by system, many new POS systems are tablet-based and easier to install than their legacy counterparts. Setup instructions are usually available on vendor websites, so you can determine whether you can set up the system yourself or  require help. Many companies offer video tutorials or step-by-step guides to walk you through the process. Some provide remote assistance, and others can recommend local installation partners who can set up the POS system for you, though these services cost extra.

More advanced POS systems may have complex setup requirements, and the company may charge a setup and installation fee upfront to preconfigure your system before shipping it, so it’s plug-and-play once you receive it. Alternatively, the company may offer remote or onsite setup assistance, data migration and training services, and you pay either a set fee or by the hour for these services. [Related Content: Learn the Benefits on Why POS Systems Are Still the Best Choice for Many Businesses]

POS system installation compatibility

Before you choose a POS system, you need to determine whether there are any parts that you already own and want to use and if there are any services you want to be able to use with the system. If so, you need to check for compatibility before choosing a POS system so there aren’t any unpleasant surprises and expenses. Here are some items to check before you select a system: 

• Verify that the POS system integrates with your credit card processor and your card reader or terminal.
• If you already own tablets that you intend to use with your new POS system, make sure it supports them. Look at the platform (e.g., Apple, Android or Windows) and tablet model (for example, the iPad Pro or Samsung Galaxy S8).
• Make sure the operating system (such as iOS 16 or Android 13 Tiramisu) on your tablet is up to date and compatible with the POS app.
• If you already own other pieces of POS hardware that you want to use with your system, such as a receipt printer or cash drawer, check with the POS software company to make sure it’s compatible.
• If you plan to integrate the POS system with business programs you already own or want to use, such as your accounting software or payroll service, verify that integrations or plugins are available, and find out if there’s an extra cost to use them. Many POS systems have app stores or marketplaces with integrations that make it easy to connect third-party software to the system. Some apps are free; others come with a monthly fee, and a few have a setup or installation fee. Here are our reviews of several popular POS systems: Clover, Lightspeed, Square and TouchBistro.
• If you currently use a POS system, export your data to CSV or Excel spreadsheets before your account expires so you can import it into your new system rather than creating it all from scratch.

A simple yet advantageous process

Setting up a POS system can be quite straightforward, and it’s a step that can transform your business operations. Whether you choose a simple POS system you can set up yourself or a more advanced one that a company installs for you, provide ample time to set up the system before you plan to use it. You’ll need to train your employees and allow them to get familiar with the system, too. A well-prepared team, after all, is often a successful one.

Shayna Waltower and Sammi Caramela contributed to this article. Source interviews were conducted for a previous version of this article.