Your traditional cash register might have served you well, but you’ve heard that it’s time to upgrade to something capable of so much more: point of sale software. Combined with the right hardware, they create a POS system, which enables you to manage multiple aspects of your business from one centralized digital platform. 

What is POS software really, though, and how can you benefit from it? 

What POS software is

Your POS hardware entails equipment like a monitor, tablet, display, cash drawer, barcode scanner, and more. These physical components do not do the work by themselves, though—they need an internal program to operate, a database that belongs uniquely to your store. 

POS software has two sides. The frontend is what your customers interact with when they pay for products: they’ll swipe their cards, sign off on their transactions (such as with a finger on a touchscreen), enter their email addresses for receipts if they desire, and they’re done. 

While the frontend works swiftly to expedite the checkout process, the backend includes an assortment of features such as report generation and warehouse inventory management tools. You can access the backend separately and review the data it analyzes throughout the day. 

The kinds of POS software

Generally, there are two kinds of POS software: local and cloud-based. 

Locally-installed systems require on-site servers. This way, you store information on your premises on a closed network that is not dependent on the internet. The system works even in the event of an internet outage, but you will have to pay software licensing fees. You will most likely need professional help setting the system up, so the upfront costs can be expensive, and you will need to update the software manually on a regular basis. 

Cloud-based systems store data remotely on a third-party’s servers. This third-party is a company that handles licensing and sells its software as a service for you to use for a monthly fee (or for a small percentage of every transaction). 

While there are security risks to storing data somewhere off-site, providers are always developing safer products that prevent the likelihood of a cyber attack. Cloud-based systems are internet-dependent, so you can access your database from a tablet or mobile device. 

Some advantages of POS software

If you use a traditional cash register, it’s essential to save up all of your receipts in order to balance your till later, and you have to create monthly or quarterly sales reports yourself (a crucial task, but it leaves room for error and can affect the way you conduct your business). This system can probably not accept mobile payments—only cash and credit or debit cards. 

POS software automates many of the tedious tasks involved in running a business for you. Instead of managing your sales, inventory, customer relationships, and payroll separately, a POS system provides relevant tools for all of these aspects in one place. Plus, it can accept multiple kinds of payment, including mobile payments. 

Some standard POS software features

Many cloud-based POS software options offer robust features (and some are industry-specific, such as for clothing retailers or restaurants), but here are a few of the standard ones you should expect: 

Sales reporting: How would you like to see sales reports daily? POS software can prioritize the metrics you care about and convey it to you in a digestible manner. What were your most popular items? Which didn’t sell as well as you thought? You can make data-driven decisions when you have detailed insight into how your business is performing. 

Inventory management: Inventory management software exists, but it’s much more convenient when it’s integrated into your POS system. Whenever a customer purchases a product, that product is automatically subtracted from the database. 

When a customer asks one of your employees about the same item, the employee will be able to tell them accurate information about availability and pricing. Plus, the information will be right at their fingertips on a screen; they won’t even need to check the backroom. 

Customer relationship management: Who does your customer base consist of? You might think you need to market to one demographic when really another is shopping with you more often. The better you understand your customers—without being too invasive, of course—the more effectively you can appeal to them. The best POS software can create digital gift cards and generate personalized discounts and promotions. 

There is much more that POS software can do, such as connecting multiple stores, integrating calendar appointments, tracking deliveries—the possibilities are vast. You can also implement an electronic POS system into an eCommerce store so that you can sell online. How do you hope to benefit from POS software?