What is a POS System? Everything You Need to Know!

A Point of Sale system, or POS for short, is a computerized system used by businesses to manage their sales transactions. A POS system can be used in a variety of industries, including retail, food service, and hospitality.

POS systems typically include a cash register, a barcode scanner, and a computer. The cash register records sales transactions, and the barcode scanner is used to scan product barcodes. The computer typically runs special software that helps manage sales transactions and track inventory.

Functionally, a POS system can do a lot of things. It can ring up sales, print receipts, track inventory levels, and manage customer loyalty programs. In addition, many POS systems now include features such as gift card and coupon integration, online ordering, and electronic payment processing.

POS systems were first used in the early 1900s by large grocery stores to manage their checkout lines. At that time, POS systems were little more than adding machines connected to printers. The first computerized system was developed for McDonald's in the 1970s.

Today, POS systems are used by businesses of all sizes to manage their sales transactions. In fact, a recent study by the National Retail Federation found that 89% of retailers use a POS system. If you're thinking about starting a business or upgrading your current system, here are some things to consider:

Types of POS Systems

There are two main types of POS systems: traditional and cloud based. Traditional POS systems rely on local hardware, usually a dedicated computer that runs specialized software. Cloud-based POS systems are similar in that they have local hardware, but the processing is done in the cloud using remote servers. The advantage of cloud-based systems is that it can lower costs by moving from a dedicated system to a shared resource model.

Hardware vs. Software-Based Systems

POS systems can also be divided into hardware and software based solutions. Both have their pros and cons. Hardware based systems are known for being more reliable, whereas software-based versions tend to be cost effective. Software-based systems are also made to be customizable, making it easier for businesses with special needs to find a solution that fits their needs.

Mobile vs. Stationary Systems

POS systems can also come in stationary or mobile versions. Mobile POS systems tend to be used by businesses that move around. This includes things like food trucks and markets where inventory needs to be tracked in real-time. Stationary POS systems are typically used by businesses that have a set location, like a retail store or restaurant.

Integrated vs. Standalone Systems

POS systems can also be integrated or standalone. Integrated systems are those that are connected to other business applications, such as accounting software or customer relations management (CRM) systems. Standalone systems are those that only manage sales transactions and do not connect to any other applications.

Costs of POS Systems

POS systems can vary in price depending on the features and functionality that is included. Entry-level systems typically start at around $1,000, but more advanced systems can cost upwards of $10,000. Additional costs can include things like software licenses, installation fees, and support contracts.