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What Is The Advantage Of A POS System?

Expert Market guide to credit card processing and merchant accounts

What is the difference between a cash register and a POS?

A cash register's main purpose is to process sales. At the end of the day, it can also tell you what has been sold and how much you have taken. This data is then manually transferred into accounts or stock lists.

A POS (Point of Sale) system is much more advanced. These are set up with software that can link to other networks. They can therefore store endless data about stock and clients - instantly and electronically.

Another advantage which a POS system has over a cash register is that it allows for the attachment of a scanner. For example, the type which is often used at self service checkouts."

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POS Advantages

There many reasons for a business to use a POS rather than a traditional cash register. The key advantages of a POS are detailed below.

Improved Efficiency

Whilst the POS system offers a variety of positives to the business manager or director, let's first explore the advantages it offers to the main system’s user (i.e. the employees) who would be having direct contact with both the system and customer each day.

Indeed, it's fairly safe to say, a POS system can improve the user’s confidence in a number of ways. For instance, they would not have to spend as much time memorizing product prices, or else manually inputting vast amounts of data as they would on a traditional cash register.

This would allow them to offer better customer service, which may ultimately grant your company a more loyal customer base, simply owing to the fact the people they serve have spoken to a friendly, calm, face.

In addition to this, while traditional cash register systems can cause quite a few issues and headaches when the user makes a mistake, Point of Sale system errors can easily be rectified with just a couple of quick clicks.

Point Of Sale system

The error rate for both machines is also extremely different. In fact, according to statistics, whilst individuals having to manually input each transaction on a traditional cash register can cause a mistake with every 300 characters typed, Point of Sale system errors are few and far between, with only one substitution error for every 15,000 to 36 trillion barcode characters scanned.

Not only will this help boost staff confidence in the system they use, it will also save the company money if previous mistakes have led to employees under-charging customers.

Furthermore, whereas inputting an item’s data using the traditional cash register system can take an estimated 6 seconds, scanning an item using a Point of Sale system’s bar code reader takes a far shorter time - only 0.3 of a second.

This speeding up of the entire transaction process doesn't merely make life easier for staff, it also means a faster, more efficient turnover - and with the potential for more customers per hour, this would certainly help boost a company's revenue in the long term.

Stock Management

Traditional approaches to stock management require merchants to physically review their current level of stock on a regular basis. Naturally, this can be a laborious and time consuming process, especially for large scale businesses.

Modern point of sale systems enable all stock to be scanned upon delivery and entered into a digital database. Merchants can therefore review their overall stock levels at a glance and make accurate purchasing decisions accordingly.

Accurate Reports

Most modern POS systems also offer merchants access to a variety of customizable reports. These reports can include critical information such as daily takings and outgoings, providing merchants with an understanding of the overall success of their business.

They can also provide information relating to the stock management process mentioned above.

Advanced reporting capabilities can identify common sales trends, such as seasonal variations in product demand. This allows merchants to organize their stock levels in advance, ensuring they have enough stock to meet customer demand and thereby maximizing their potential takings.

Additionally, these historical reports enable merchants to identify areas of unnecessary overspend and take appropriate action.

Employee Tracking

The ability to track employee activity can be another reason to utilize a POS system. Through the use of unique identification codes (sometimes referred to as clerk codes), individual employees can be linked to specific transactions, regardless of how many members of staff use the same machine.

By tracking staff behavior, merchants can identify individuals with particularly strong or weak sales figures, fostering a spirit of healthy competition in a business and allowing appropriate action to be taken with regard to weaker employees.

Moreover, the knowledge that their transactions are being tracked discourages instances of employee theft.

Price Consistency

For merchants operating a large scale business across multiple locations, maintaining the consistency of prices across all outlets can be problematic.

However, by implementing a POS system, merchants can have access to a digital product database. Through this database, merchants can amend product prices, special one-off deals and so forth, and these amendments can be automatically applied across all business locations.

Maintaining such consistency is beneficial for several reasons, specifically with regards to customer service.

Consistent pricing helps to ensure customers receive the same level of service, regardless of which business location they use. As a consequence, customers are more likely to utilize a company's services in the future.

Invest in a POS

Making one small decision when starting a business can often lead to far greater things. Investing in a modern POS could do just that. Although the initial cost of these systems may be higher than that of a simple cash register, the benefits it brings to staff, to customers, and primarily to you, most certainly can't be denied.