There are endless sub-systems and branches in the world of accounting. Keeping track of them all, especially if you are not an expert in the field, can be very tricky. While the several systems may appear unnecessary at first glance, each of them is created for a specific purpose. If you are reading this article, then the chances are you’re wondering how the point of sale systems work. We are here to tell you all about it.
What Is POS?
A point of sale system, or POS system, allows businesses to receive payments from customers while keeping a record of all the sales. As you can infer from the name, it’s when the customers come to you at the register or check out at your online store. The system for each store set up, either brick and mortar storefronts or online shops, operates differently. Back in the day, a POS system strictly referred to physical cash registers at stores. However, with the modern-day digital shift, customers can check out their orders regardless of where they are in the world with no more than a smart device and a stable internet connection.
What Do You Need?
While a customer only needs an electronic device and internet to purchase your products or services, you will need a little more than that. Depending on your store set-up, you will have to invest in a hardware or software solution, or even both, to implement an efficient POS system. There are generally different types of hardware options. Registers, credit card readers, receipt printers, cash drawers, and barcode scanners are among the most common types of point of sale hardware. Exploring different POS machine options can also be a great idea. Several machines have contactless payment, cash, chip and credit cards, and cardless transactions. Solutions may also come with inventory, customer relationship, and employee management features, as well as offer POS reports. Some solutions also offer a tipping support feature, allowing clients to add tips as they check out digitally. This can be especially advantageous for restaurants or any other businesses where customers can tip.
How It Works
After customers choose their desired products at your physical store, the responsible employee should look up the item’s price using a barcode scanner or the visual scanner on a POS machine. Your system is supposed to show the price of the item including any additional sales taxes. Then, your inventory count is updated to show the sale of the product. Your customer will pay using their preferred method. In some cases, you will have to wait for the bank to approve the transaction. After the transaction is finalized and the payment is made, you will hand off the printed receipt, along with the items to the customer.
If you are a new business owner, getting enough information and a deep understanding of the various types of accounting systems can be very challenging. This is especially the case for entrepreneurs who have no background in accounting. Fortunately, as technology evolves, easier and more efficient solutions, such as POS machines, are available. Not only do they help employees perform simple financial procedures, but they also offer various beneficial features, like CRM, employee management, and tipping support.