POS systems are important in most businesses in the modern world where computerization has become a part of life. POS stands for point of sale and refers to the system– a combination of software and hardware, through which merchants undertake their transactions to simplify business operations. They include a barcode reader, credit card reader, register screen, cash drawer and of course a database to store and retrieve the data received from these electronics with an aim to complete the transaction in an automated manner.
These systems result in positive outcomes which are directly linked to the benefits of the computers which include automation, speed, reliability, large amounts of data amongst many other direct advantages of computing. Now that you know what a POS system is, we will discuss some of the importance of having a reliable POS system in your business.
There are four major categories that will classify the POS system by parts. These major components include Sales Reporting, Customer Management, Inventory Management and Employee Management. Let us begin to explore each of these components and their importance.
1. Customer Management
In all businesses, customers are important. They are the major drivers of the business when combined with a good management. This is to imply that customer satisfaction is important for the survival of any business that relies on customers and it can be achieved through various means such as providing feedback channels, conducting surveys and field visits. All these bring us to the marketing component of the POS. The marketing component needs to be included in the POS to ensure that the needs of the customers are addressed. The other component of this category is the customer purchase logs. Besides meeting the needs of the customer, it is also mandatory to keep the record of sales they make for accountability in case refunds are to be made. These logs are normally retrieved on-demand as evidence before making the refunds.
2. Inventory Management
An inventory is a list of items in stock including their prices. Barcode readers are used in the creation of these inventories. Any standard POS must have the capability to display the records of goods in stock whenever queried to allow for scheduling of orders for the next stock to be made. This ensures a continuous supply of goods to the consumers, gives enough time to the manufacturer or supplier to manufacture goods required and allows for accountability of goods by checking the money received against the goods sold. This ensures integrity amongst the employees within the business and takes care of assigning the responsibilities to the employee if a claim is to be made. The inventory component is also good when analyzing the rate at which goods are sold to determine whether to increase or reduce orders.
3. Sales Reporting
Poor decision-making may cause a business to collapse. Human perceptions are important when deciding but they do not provide adequate information about the sales. A sales reporting tool is needed to be included in the POS system to provide tools for analysis of sales data and generate visual outputs of the information in a format understood by humans. These outputs could be diagrams, charts or scatterplots showing distributions of data against a study component, say, time or other secondary factors. From these outputs then trends may be analyzed to determine the interaction of different phenomena within the data as is recorded from the past. Predictions may also be made from these systems to examine the output of applying a certain condition to data and thus, the decision-making process becomes easier than when done visually.
4. Employee Management
Business ethics need to be observed to improve the performance of a business. A POS system should come with an automatic login system to allow for logging of a sign-in and sign-out time. Such capabilities allow for tracking of employee behavior to determine the appropriate penalty to be given for an offense made, say late in arriving or leaving earlier than allowed. Salary payments are also handled by this system by creating a payroll for various sections of the business. Through such a system, disbursements of funds are made easier since the list of employees is contained in the system including the payments to be made to each of them. Receipts are generated automatically by these systems based on the amounts to be made and deductions to be done from the net income for automatic tax collection.
