What is a point of sale system (POS)

A Point of Sale (POS) system is a comprehensive solution utilised by businesses to facilitate and document retail transactions. More than merely processing cash payments, a POS system must adhere to meticulous accounting regulations concerning cash and card transactions.

What is a point of sale system (POS)

A Point of Sale (POS) system is a comprehensive solution utilised by businesses to facilitate and document retail transactions. More than merely processing cash payments, a POS system must adhere to meticulous accounting regulations concerning cash and card transactions.

A POS system encompasses far more than just an EFTPOS (Electronic Funds Transfer at Point Of Sale) terminal. It processes the transaction data, interfaces with payment gateways, registers the payment, and has capabilities to handle various payment methods. Moreover, a POS system should be capable of generating specific reports, printing customer receipts, and displaying the current time, among other functionalities.

Retail establishments and hospitality venues like restaurants typically require a POS system to process transactions. ‘Cash sales’ within this framework refers to transactions where payment is rendered immediately upon purchase, irrespective of the payment method, which could include cash, card, mobile payments like PayID, or integrated solutions like Square.

Daily reconciliation, also known as the ‘end-of-day’ process, is an obligatory practice where the day’s transactions are tallied and recorded on the POS system.

Understanding Product-Certified POS Systems

In Australia, businesses handling cash transactions are obliged to use a POS system that is product-certified. Such certification ascertains that the system meets the Australian standards, ensuring regulatory compliance. Upon acquiring a POS system through purchase, lease, or other arrangements, evidence of product certification must be provided.

For an up-to-date list of certified POS systems as per the Australian standards, businesses should refer to the pertinent governmental authorities.

Failing to operate with a certified POS system when required can result in significant fines, as businesses are legally mandated to formalise all sales accurately through a compliant system or, alternatively, issue invoices for each transaction.

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Exemptions to POS System Requirements

Exceptions to the mandatory use of POS systems do exist under specific circumstances, such as:

  • If your annual turnover does not exceed a set threshold (akin to the 50,000 kroner threshold applicable in Norway).
  • When cash transactions are infrequent or fall below a designated benchmark.
  • During sales executed through vending machines.
  • At unmanned sales points.
  • When meticulously issued cash invoices are employed.

Businesses exempt from POS system obligations must nonetheless maintain thorough records of all sales transactions. Methods for achieving this may include employing sequentially ordered sales receipt books or accurately detailing the exchange of goods and monetary transactions.

  • A pre-numbered bound book.
  • A pre-numbered sales receipt.
  • A statement of delivered and received goods and cash.

Additionally, businesses not utilising a POS system must be prepared to offer a physical receipt should the customer request one. It’s essential to maintain a receipt book on hand for such scenarios.

Regardless of the system in place, daily cash reconciliation is imperative. This involves counting and recording the total money held at the close of business each day, thereby ensuring the integrity of financial records.