A point of sale system (POS) is a machine that you can use to register and accept card or cash payments from your customers.
A POS system can also be called a cash register or a till. However, a point of sale system usually has more functionality than a cash register or till, that’s just used to create receipts and store cash.
What is a point of sale system?
The term point of sale system refers to both the hardware and software that’s used to log transactions and receive payments.
In a brick-and-mortar store, a POS consists of a countertop terminal, an app, and a card reader. These days, businesses can even use their phones to log transactions and receive card payments.
If it’s a grocery store or clothing store, for example, it’ll also include a barcode scanner.
The checkout in an online store is also a form of POS, where sales are logged and payment is processed.
What can a POS do?
A point of sale system can do many things, such as:
- Register payments
- Accept card payments
- Store cash payments
- Produce receipts for your customers
- Perform reconciliation, where all transactions are tallied and recorded
- Generate sales reports
- Integrate with your inventory management system, to reduce inventory numbers when you make a sale
- Integrate with your accounting software to bookkeep transactions
A good POS can make the process of handling payments, managing your inventory, bookkeeping transactions, and producing receipts much smoother for you.
Who needs a POS?
Any business that handles cash and card payments at the time of purchase, needs a point of sale system.
Examples include retail businesses such as clothing stores and grocery stores—including online stores—as well as businesses in the hospitality industry, such as hotels, restaurants, cafés, and bars.
The alternative to having a POS is to invoice your customers for goods and services instead. If you invoice customers, you’ll get paid after the sale.
