As many retailers already know, a point-of-sale system (POS system) is one of the most valuable tools you can invest in.
Not only is it the focal point of streamlining the checkout process, but it can serve as a powerful business management and insights tool. The downfall: merchants often don’t take the time to do the research and understand what to look for in a POS system before they jump in and buy one. The result: frustrated, unhappy merchants and POS providers alike.
Hopefully, with this quick five-minute read, we can turn those frowns upside down and provide you with the proper expertise to do the research, ask the right questions, and know what to look for when buying a new POS or upgrading an existing one.
Affordability - How Much Does a POS System Cost
We will address this first. Not because it’s most important, but because we understand it’s importance to you, the merchant. We know price plays a big role in determining which point-of-sale system to choose, but it shouldn’t be the only factor, or even the most important.
The easiest way to put this is the old cliche ‘you get what you pay for.’ This holds true for POS systems and scores of other products you purchase daily. Just as a dollar store barbie is different from a Mattel Barbie, in price and quality. The Mattel version is made from a higher quality, more durable plastic, whereas the dollar store version simply is not. Hence, the drastically reduced price compared to the name brand.
So, what do Barbies have to do with knowing what to look for in a POS system? The lesson is the same, don’t sacrifice quality over cost. Determining quality is something partially unique to every business owner. When we refer to the quality, we are talking about the attributes that complement your needs, and overall, what features and functions the POS must have for you to run your business properly.
Once you decide on a budget, make a list of all your nice-to-haves and must-have point of sale features and use that as a starting point for your research. If you’re upgrading from an existing POS, make a list of what functionality is missing from your current one that would simplify day-to-day business operations. For example, if you take credit card payments on a separate device that’s not integrated into your POS. The reconciliation process at the end of each day would be quicker and more accurate if you had integrated payments - a good feature to look for in a POS system. Most importantly, be realistic. Don’t expect to get a robust POS system, complete with all the bells and whistles for $10 a month. Depending on your specific needs, you can get a quality point-of-sale system from $69 per month to $200 per month, plus hardware costs.
Features and Functionality: Must-Haves vs. Nice-to-Haves
Hand in hand with cost, affordability, and quality are features and functionality. Why, you ask? Typically, there is a strong correlation between added features and functionality to higher costs. The good news is, you don’t have to break the bank to get a lot of the features you need. Thanks to cloud technology and the widely adopted Software-as-a-Service (SaaS) business model, point-of-sale providers can keep costs down without sacrificing functionality. This translates into more features and savings for you.
Here are some features to consider before choosing a POS system.
Reporting. Robust reporting capabilities are essential and not an area where you want to cut corners. Without the proper reports, you won’t have the data to guide your business decisions. How are you going to differentiate between your hottest sellers and dead inventory? Aside from your standard inventory reports, here are a few others to keep in mind for more accurate retail insights.
- Sales by item, category, and department
- Individual transaction detail
- Sales by tender type
- Sales by customer
- Discount report
- Pay ins and payouts
- Tax reports
- Shift summary
- X and Z reports
Employee Management. POS software that allows employees to clock in and out from the register will enable you to easily track staff hours, manage schedules and submit payroll on a recurring basis.
Customer Management. In today’s digital age, this is an important one. How can you market to your customers when you don’t know who they are? Easy, you can’t. Being able to distinguish between your most loyal customers and the casual ones will help you make better marketing decisions which lead to increased sales.
Future-Proof. Today, you might just need a POS system for your brick-and-mortar store. Tomorrow, you may want to venture into the world of ecommerce - which requires a platform to host your online store. Three years down the road you open a second store. Now are you going to manage your brick-and-mortar inventory for two stores and your ecommerce inventory without living a retail nightmare? With a point-of-sale system that can support multiple locations, multiple registers, and integrate into an ecommerce platform. Don’t just look for a POS system that is going to meet your needs today. Look for one that is going to meet your needs years down the road as your business grows and expands.
Customer Support. At some point, you are probably going to need support from your POS provider. Whether it’s a hardware malfunction or just something you’re not quite sure how to do and are looking for a little guidance. You’ll want to understand the level of support you’re going to receive from your POS provider. Do they offer 24/7/365 support? Is it phone support, email support, detailed online documentation, or all of the above?
Ease of Use
Usability is another key factor to consider when choosing a POS system. A point-of-sale system should be easy to set up and have an intuitive user interface and back office management tools. The best way to find out is to ask for a demo from the provider. This way you can get an inside look at the system to help determine if it’s something you feel comfortable using. You also want to make sure it’s something your staff is comfortable using and is easy to setup.
Another great way to determine ease of use is to talk to other shop owners who are already using the POS system. In other words, don’t be afraid to ask for references or case studies. If at all possible, ask for ones that are in the same industry for an apples to apples comparison.
The invention of Apple’s iPad has raised the bar in user experience and design. Opting for an iPad POS system that leverages the existing design features and capabilities that most iOS users are familiar with, will eliminate some of the confusion that comes with learning a new product. For example: Since you swipe left when deleting an email on the iPhone, naturally it makes sense that you should also swipe left to remove an item from an order on your iPad point of sale system.
Your POS system will have an impact on all areas of your business, from the way manage your inventory to how you interact with your customers. It’s essential to take the time and make sure you get it right. Knowing what to look for in a POS system doesn’t have to be a grueling task, but it does have to be a methodical one. Take the time and do your homework. Putting in the hard work now will pay dividends in the future and can save you a lot of heartache and money in the long run.
Do you need extra funds for your small business? An SBA loan is the best bet for small businesses with low rates, long terms and low monthly payments. Visit SmartBiz Loans® today and discover in about five minutes if you’re qualified to apply for an SBA loan with one of our bank partners.
About the Author
As Content Writer at ShopKeep, the number #1-rated iPad Point of Sale System, Nicole Walters leverages her background in communications and her extensive experience in the payment and POS industry to create valuable content that addresses real problems and solutions for small business owners.