A Guide to the Different Types of POS Systems
If you’re a retail business on the up-and-up or if your business outfit is already an established one, then you may have already heard about using a POS for retail management. For those who are not already familiar with the term, a point-of-sale system, or POS system for short, is a system that facilitates your customer’s payments for the goods or services that they’ve bought from you.
Before the digital era, the term “POS” was largely synonymous with the cash register. But in recent times, most businesses have adopted fully digitalized systems that integrate sales, accounting, inventory management, customer relationship management (CRM), human resources, and other aspects of business operations via the cloud. This is the kind of POS that you should consider getting for your business, knowing that the investment will pay off handsomely in both the short and long term.
However, you may not be aware that there are multiple types of POS, and choosing the right one that can fit your business can be challenging. To help you make a fully informed decision when it comes to picking the right POS system for your business, here’s a handy guide to how POS systems work, the different general types of POS systems that are commercially available today, and how to select the ideal POS system for your business.
How a POS Works and the Benefits of Using a POS System: The Basics
Before choosing between the different types of POS systems available in the market, it may be good idea to understand how a POS system is supposed to work and just how much a successful POS upgrade matters to your organization. To that end, here’s a briefer on what you should expect from your modern-day POS system.
A Brief History of Modern POS Systems
Though many people are under the impression that POS systems are fairly new innovations, the predecessor of the modern-day POS dates as far back as the 1800s. James Ritty, a saloon owner based in Ohio, invented the first mechanical cash register in 1879 as a way to become more efficient with bookkeeping as well as to discourage petty theft among his staff.
Ritty got the idea from a machine he encountered while on a steamship bound for Europe. Intrigued by the machine’s ability to count the number of times the ship’s propeller moved, Ritty sought to apply the same principles of regularity and trackability for his own saloon’s total receipts. Thus, the mechanical cash register was born and soon sold to the National Cash Register Corporation less than a decade later.
The 1950s saw the advent of digital cash registers equipped with their own LCD screens, built-in thermal printers, and credit card magnetic strips. These were soon widely adopted by the restaurant industry in addition to the supermarket and grocery sector. In the 1990s, it became commonplace to use POS systems with graphic touchscreens that allowed further adjustment and customization of orders at remarkable speed. In the 2000s or noughties era, the modern POS system were characterized by its ability to connect to various functionalities through the cloud, its capacity for processing large volumes of orders in a snap, and its availability on a 24/7 basis. Suffice to say, the POS system has come a long way from its rote mechanical origins and is capable of doing so much more for modern-day, digitally driven businesses.
Components of a Digital POS System
Regardless of the type of POS system you end up onboarding for your company, most digital POS systems share the same key components. They consist of the base POS software, dedicated hardware components like bar code scanners and credit card readers, and an ecosystem of internet-enabled devices such as desktop computers, laptops, tablets, or even mobile phones.
A digital POS must also be capable of executing the following core functionalities:
Some products come with additional features off the shelf, like the ability to record employee logins, payroll management, receipt management, and multi-store management. The extent of your POS system’s capabilities depends on factors like what type of product you acquire and how easily it is modified. That’s why it’s important to explore your options and to choose the right one.
Why Use a POS for Your Business Operations?
Ultimately, a modern-day POS system will do a lot of things for your business. You’ll be able to get a better handle on your sales data and achieve greater financial foresight than you were originally capable of with a simple transaction keeping system. You’ll spend much less time punching your numbers and arriving at your full profitability situation, since an integrated POS can consolidate your real-time sales and accounting records and give you a detailed report based on the data. With a digital POS, you’ll be able to move on from long hours spent accounting for each sale, and you’ll spend more time on tasks that are integral in driving your business forward, like coming up with a good sales strategy.
Another benefit of a good POS is better inventory management. Keeping track of your inventory will become a greater pain point for you as your business expands and as your repertoire of products becomes bigger. The POS will give you full clarity over your current stock and even better control of the movement of your goods from your warehouse to your store.
POS upgrades will be particularly advantageous for business owners who want to lower their cost of doing business and who want to maximize their profits across multiple sales channels, both on site and online. The additional speed, efficiency, and control that will come out of using a good POS will definitely translate into key business goals like upticks in sales and better management of limited business resources.
The Different Types of POS Systems and Their Best Applications
Benefits notwithstanding, not all POS systems are built equally. Some types are better suited to particular business sizes or business models. Here’s a review of the different types of POS systems currently available in the market and what applications each is best for.
The terminal POS system is usually seen in businesses that have a visible cash register or a counter where all the transactions take place. While they are usually hardware- and software-based, most systems that fall under this particular POS type still require internet access to function properly. Some may even run completely on cloud-based software, further necessitating a reliable online connection.
Terminal POS systems are often sold as all-in-one solutions, with the hardware and software bundled together in one complete purchase. The requisite accessories that are required for a typical POS system, such as barcode scanners, card swipers, and cash drawers, are also included in this package. Besides these, round-the-clock technical support and cloud-based backup services may also be offered in the package, with the former usually being the norm.
Depending on the exact type of terminal POS purchased by the company, there may be other features that are included off the shelf. For instance, terminal POS systems tailored specifically for restaurants may come with tableside device Wi-Fi integration for easier ordering on the part of restaurant patrons, thus eschewing the restaurant’s need to hire many waiters or servers. Versions of POS systems that are tailored for retail establishments may also include extensive inventory tools, label printing, and ecommerce integration.
This particular type of POS is perfect for businesses that are high-volume in nature and offer low-to-medium price ranges on their products. Such businesses include full-service restaurants, retail outlets, grocery stores, fashion boutiques, antique stores, bookstores, salons, spas, electronic stores, and more.
The mobile POS system, in contrast to the terminal POS system, is much smaller in scale. That doesn’t mean, however, that it is any less useful. It is generally distributed as a smartphone app that’s bundled with a credit card reader attachment. Other optional attachments, such as barcode scanners and receipt printers, are also available for added functionality. More often than not, the app itself comes free of charge in exchange for the client business’s subscription to a payment processing service. The card reader and any other attachments are also provided at little to no cost.
This particular POS type is ideal for businesses that do not handle a lot of inventory and businesses that have small teams, but require a high degree of staff mobility. The mobile POS solution is ideal for small-scale operations like those of street vendors, fair/event vendors, freelance or contract workers, contracted professional services, and other similar outfits.
The next step up from the mobile or smartphone POS system is the tablet POS, where the same kind of mobility is needed along with more powerful inventory tracking, bookkeeping, and employee tracking features.
A tablet POS system works in pretty much the same way as a mobile POS, where the POS app is installed on the tablet and any optional accessory (e.g. a card reader or receipt printer) comes bundled alongside it. The only difference is that the mobile device is usually much bigger and comes with certain features that should prove handy to businesses with bigger inventories and higher headcounts.
Suggested applications of tablet POS systems include those of mobile vendors, quick-service restaurants and bistros, wine clubs, coffee shops, gift shops, professional services, art galleries, small theaters, and more. In summary, any small-scale business that requires a bit more control and finesse when it comes to managing its resources will benefit from a tablet POS system.
Self-Service Kiosk POS
Self-service kiosk POS systems are specialized solutions meant to allow the customer to facilitate the transaction by themselves without the need for a cashier or human employee. For example, a large movie theater may offer a self-service kiosk for customers to purchase and schedule movie tickets on their own. Another application of a self-service kiosk POS could be for grocery store customers who want to verify the prices on individual items and then check these items out by themselves.
This method allows business owners to make their operations much more efficient while also helping them save on manpower. This setup usually mimics that of a terminal/desktop POS, but includes additional security functions so that all transactions are one-ended. In turn, that decreases the risk of any malicious customer activity transpiring on the system.
Examples of applications where self-service kiosk POS systems are typically used include businesses that sell tickets of any kind, transportation firms, hospitals or clinics that facilitate patient check-ins, parking facilities, human resource departments, and the like.
How Do You Choose the Best POS System for Your Business?
Now that you’ve gotten to know the various types of POS systems, you’re one step closer to making the important decision of choosing the right one for your business. What should you factor into the equation? Below are a few helpful tips to narrowing your choices down.
Base Your Decision on Your Business Profile
As you can see from the information above, certain POS systems are more naturally suited for certain types of business than others. Even if you buy the most high-end POS product with a number of the state-of-the-art features, it won’t be worth your money if the system isn’t suited for the type of business you do.
What industry does your business fall under, and what POS systems do similar businesses use? What type of POS can your company budget accommodate for the moment given its size and available resources? These are some of the questions you should ask before you make your final decision.
Identify the Features That You Need Most from Your POS
Second, you should choose your POS based on the features that you need from it. Again, this varies from business to business. A large retail or quick service business may need a POS system with features that can sustain a high volume of orders. A pop-up business that operates at fairs or trade events, on the other hand, will do better with a lightweight POS that can guarantee maximum mobility.
Before you make the call on which POS to buy, identify which POS features your business would benefit the most from. Once you have an idea, it won’t be as hard to pick from a range of good choices.
Consult a Trustworthy POS Vendor to Give You In-Depth Advice
If you’ve got any in-depth questions about the differences between POS products and what functionalities they come with, consult your POS vendor. Your vendor is in the best position to tell you about the product, how it works, and exactly how it can improve your business operations.
In truth, your choice of vendor matters just as much as your chosen POS system. A good vendor can spell the difference between a successful POS onboarding and a disastrous money drain. Only entrust a major investment like a POS system to a vendor who has the track record, credentials, and implementation expertise to give you your money’s worth.
Buy a POS That Can Permanently Modernize Your Business
Lastly, the success of your investment in the right kind of POS depends on how well it can help you modernize your business. Today’s business environment is extremely competitive, and companies that pass up the chance to future-proof their businesses at a critical juncture in their operations are often left with a lot of regrets.
You wouldn’t want to see your competitors outpace your growth and be saddled with a number of “what ifs.” Don’t risk becoming obsolete in your industry and choose a POS that can truly help your company transition into the modern age.
Upgrade to a New POS with ANSI Information Systems
When it comes to solutions that can help your retail business get on the fast track to success, one of the most effective things you can do is to get a POS system. But as emphasized above, the type of POS system you choose matters a great deal. Study the types listed above carefully and make your decision based on your retail business’ size, needs, and potential growth.
If you still have a lot of questions and want answers from a reputable source, don’t hesitate to contact the people at ANSI.ph. We’ve helped many Filipino companies choose the right POS system for their unique circumstance. As a result, they’ve come away with tangible results like increased revenues and business expansions.
We’re happy to share our knowledge, expertise, and standard of service when it comes to helping Filipino businesses onboard new POS systems. For more information on the products in our catalog, plus how you can use them to achieve your business goals, contact ANSI now!