What is a POS system


So, you're opening up a new restaurant, takeaway or deli and you want to accept credit and debit card payments from your customers. You'll need to put a couple of things in place before you can do that.

First, you'll need a merchant account. This is a special type of account that allows you to process electronic transactions both online and in-store. You can open a merchant account with your regular bank or choose one of the many specialist providers available.

Second, you will need a Point-of-Sale system (POS). This is the hardware and software used to physically take payment.

In this article, we're going to look more closely at what a POS system is and how you can use them to improve the efficiency of your business.

What is a POS System?

A point-of-sale system consists of the hardware and software used to take electronic and cash payments. When a customer walks up to the counter or checkout to pay for their items. The cashier scans them into the POS system.

POS System

Once scanned, the items are totalled and the cashier requests payment. Most POS systems allow payment to be taken using cash, credit/debit card and contactless technologies.

Once payment is received a receipt is printed for the customer and inventory is updated. When implemented properly, POS systems allow accurate record-keeping and streamline business processes.

How does a POS system work at a small business?

POS systems vary in their complexity. While a basic system will allow you to collect payment. A more complex system can be integrated with stock control and accounting software where they form part of a complete business management system.

Advancements in technology have brought enterprise level POS functionality to small businesses. Now a small shop or cafe or deli can benefit from a range of exciting features such as automated stock control that were previously out of reach.

Because of the complexity of modern POS machines, it may help to run through how they are deployed in a typical retail or hospitality environment. The following represents a typical store transaction, but the process can be adapted for any type of business.

Step 1: The customer chooses the products they wish to buy and brings them to the checkout for payment. The cashier then scans the barcode of each product into the POS system.

Step 2: The POS system adds up the total amount due including GST. Most POS systems also temporarily remove items from inventory at this point. This helps to keep your inventory accurate in real-time.

Step 3: The cashier requests payment. Most POS systems offer the option of cash, credit/debit card and gift card payments. But increasingly even basic systems allow card payments to be taken using contactless technology such as Apple Pay or Google Pay.

Step 4: Once payment is confirmed the transaction is completed. The items are permanently removed from inventory and a receipt is printed for the customer. If the customer paid by credit/debit card the funds are credited to your merchant account.

What types of hardware and software does a POS system typically include?

The hardware and software of the POS system can vary depending on your requirements. Fortunately, POS systems are modular, allowing you to easily add the features you need when you need them.

Let's take a look at the different types of software and hardware options available:

Common hardware options

POS terminal Box:

POS terminal Box

This is the brain of the system. Most POS machines are PC based which allows them to be easily connected to a network using Wi-Fi or ethernet. They are available as both separate POS terminal box or can be integrated into a touchscreen panel PC.

Touch screen Terminal:

Touch Screen Panel PC - FEC PP9635

This is the interface the cashier uses to interact with the system. Touch screen displays can be integrated into the POS terminal. Or they can be tablet based POS which allows cashiers to take payment from anywhere in the store.

Receipt printer:

Receipt printer

This is used to print receipts for the customer. But they can also be used to print orders for restaurants and delis. Several types of printers are available but most of them are high-speed thermal printers which are ideal for high-volume transactions.

Cash drawers: This is used to securely store and distribute cash. Several types are available including cash draws and flip top cash drawer models.

Barcode scanners:

Barcode scanners

These are used to scan products into the POS. Several types are available including 1-D Laser for superfast and accurate scanning and LED scanners for easy point and shoot capture.

Credit card reader: This is the device used to scan credit/debit cards data into the POS. In most cases, the card reader is issued by your merchant account supplier. Most card readers now include proximity readers allowing you to accept contactless payments.

Common POS software features

POS software is available as either an on-premise solution like InPOS. Or as a web-based solution like FreeFlowHub. They both offer a range of features to help you improve the customer experience and manage your business.

Payment processing: This allows you to process cash and credit/debit card transactions along with payments made using contactless technology such as Apple Pay and Google Pay. Most systems also allow you to process card-not-present transactions such as online or telephone orders.

Inventory management: Provides automatic inventory control, allowing stock from processed orders to be automatically removed from inventory. This can greatly improve the efficiency of your business and allows you to monitor inventory in real-time.

Self-service kiosk: Minimise queuing and improve the customer experience by deploying self-service kiosks. These can easily be tailored to the needs of your business with options available for; restaurants, takeaways, delis, butchers and retail stores.

Delivery management: This allows you to integrate your store with an in-house or third-party delivery service. Managers can easily allocate orders to delivery drivers while customers can keep track of their orders online.

Table-side ordering: This allows you to input orders directly from the table to the kitchen. Using table-side ordering can greatly improve efficiency and reduce errors, thereby keeping your staff productive and your customers happy.

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