What is a POS system and how does it work?

A Point of Sale, or POS, system is a computerised system used by businesses to facilitate sales transactions and is generally comprised of three parts: the hardware, the software, and the backend. The hardware includes the cash drawer, the receipt printer, and the barcode scanner. The software is the program that runs on the computer and tells the hardware what to do. The backend is the database where sales and inventory information is stored. All must work together seamlessly to be an efficient system.
Most people are familiar with the hardware components of a POS system, such as the cash register, receipt printer, barcode scanner, and touchscreen or keypad and also understand these components serve distinct purposes. Sometimes, but not always, these are integrated into a single countertop unit.

The cash register is used to calculate the sale amount and to store information about the sale, such as the date, time, and item purchased.

• The receipt printer prints a receipt for the customer, which includes the sale amount, the business name, and a description of the purchased items.
• The barcode scanner is used to scan the barcode on the product, which automatically populates information about the product into the POS system.
• The touchscreen or keypad is used to enter information such as the customer's name and address.

The software and backend of the system are more complex and less commonly understood, though this is where the magic happens.

Quite often, POS systems are used in conjunction with other software applications, such as accounting programs like Xero, to help businesses manage their operations at a financial reporting level too.

When integrated with the POS system, accounting software can be used to track inventory levels, sales, and expenses and then provide businesses with a complete view of their financial status. The value of the information provided certainly outweighs any costs that may be associated with establishing the POS system.

Choose a POS System That Benefits Your Business

When you're starting or growing a business, you'll want the right tools to manage your finances and day-to-day operations. There are many point-of-sale systems available, and it's important to choose one that fits your business. An off-the-shelf system may not handle all your needs and that's where Megabits can help with a bespoke POS system solution that's perfect for you.

At the end of the day, a solid POS system will have the ability to handle your inventory, track sales and customers, and manage your budget.

Specifically, you should look for the following key features when exploring your POS system options

1. Ease of use - The system should be easy to use, especially for your employees.
2. Compatibility - The system should be compatible with your existing hardware and software.
3. Flexibility - The system should be flexible enough to suit your business's needs.
4. Features - The system should include the features you need, such as inventory management, customer management, and reporting.
5. Price - The system should fit your budget.

Retail shops, restaurants, and service companies are just some examples of businesses that use POS systems to manage inventory, track sales, and create customer profiles. In reality, all businesses can benefit from the right POS system to improve efficiency and customer service. The Megabits team can help you determine the best POS system for your business today, including sales, inventory management and customer tracking features, so why not get in touch?