What Is a POS and Why Does Your Business Need One

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Maximum efficiency in any business is critical. And technology has made it possible to achieve this. 

One such solution to businesses comes in the form of a point-of-sale POS. The functionalities have evolved over the years. From simple financial transactions, the company can now get so much more with the right POS. 

Statistics project that the global POS software industry could reach $10.8 by 2027. That is not a far-fetched idea, taking into consideration that by 2020 it had hit $9.3 billion. POS hardware is the largest mover in the segment.

By 2025, the experts believe it will bring in upward of $66.3 billion. And now, there is a cloud-based POS that removes the need for on-premise systems. Yet, a paltry 7% of retail businesses have embraced such. 

If you haven’t invested in the POS, it is time to do so. Read on for some convincing reasons why you should.  

What Is A POS?

You can equate a POS to an automated cash register. It is where transactions happen. The hardware and software provide solutions like receipting, scanning barcodes, or swiping cards.

The trick to shopping for the right POS system will depend on your business needs. Now let us go into why investing in a POS is a sound business decision. 

1. Better Functionality with the POS

Advanced Point of sale systems come with the best in terms of software and hardware. That, in no way, reduces the efficiency you can achieve with the more basic types. But there is a more significant improvement in work and functionality with the right POS.

Take the example of a wholesale or distribution business. The amount of inventory you handle is huge. A point of sale with the right features can make work so easy. You get advanced functionalities like:-

  • Advanced pricing
  • Managing controls and inventory through automation
  • Vendor and customer relationship management
  • Tracking receivables, statements, and invoicing
  • Coupon and discount management 
  •  User permission and system security with timely notification
  •  Labor tracking and employee time cards, and much more

You can run your wholesale business from one central location. You don’t, for instance, have to deal with multiple spreadsheets when taking inventory. There is no manual inputting of data every time a product enters or leaves the warehouse. 

The reports help you know when to replenish stock. In that way, you never disappoint the customers with out-of-stock items. 

You also avoid overstocking or understocking with a POS system. Retailers lose up to $45 billion from not having inventory in the US. Excess inventory costs approximately $224 billion upwards. 

2. A POS Saves Time and Money by Increasing Efficiency

As we stated, efficiency is critical for any business. You save time and money that would go into manual processes. Imagine trying to service many customers during peak shopping hours. Manual transactions would take time. 

The long waiting time could end up frustrating customers. A POS system with the features we have highlighted above can be a life and game-changer. 

Letting automation take over the tasks will result in streamlining workflows. Real-time tracking and reporting will let you know what requires your attention.  

When a business achieves higher efficiency and savings, the chances for growth are very high. The POS system you choose should allow for customization. 

There will be increasing demands that come with scalability. The ability to upgrade features without changing the whole system is a big plus. 

3. Remote Working With Cloud-Based POS Systems

Cloud-based POS systems are ideal because you can streamline processes from multiple locations. This facilitates remote working conditions. All you need to do is assign user privileges to the right people. 

The teams can update information, and receive them in real-time. It is a fantastic tool for immediate decision-making using available data. 

Another advantage of cloud-based POS systems is the level of security. They include features like password tools, high-level encryption, or multi-factor authentication. Do pay attention to the security features when shopping for a suitable POS. 

4. Better Client Relationships

A POS can help nurture relationships with customers. You get all the data about the purchasing history from the cash registry. Use the information for targeting. 

Take the example of a customer who always buys camera equipment. He would be interested in the latest offerings. The marketing team can translate such insights to personalize communication with the customers. 

The POS can also record customer queries. Quick and prompt responses to such shows the business cares.

Remember, customers appreciate good service. Here are some interesting statistics to note. 

  •  90% of customers place high importance on immediate responses to queries. 
  •  Another 90% will base their decision on whether to transact with a company based on the customer service they receive. 
  • 70% of the customer journey comes down to how well you treat them. 
  • 80% of customers place equal importance on customer experience and the type of products and services you offer. 

A POS system provides an effective way of improving the customer experience. 

5. Higher Productivity with POS

Manual processes can take a toll on employees. Repetitive tasks can be a significant challenge. 

Inattention or boredom can result in costly errors. It gets worse if the task is time-consuming. 

Take the example of manual entry of data into payroll, inventory, or even customer satisfaction surveys. Error margins in simple spreadsheet data entry can be as high as 18 to 40%. 

Human error in verification through visual checking is a staggering 2958%. The impact on productivity makes things worse. 

Low job satisfaction is common in organizations that still depend on manual labor. 74% of employees report higher job satisfaction due to automation. 

And, let us not forget, manual processes are expensive. You have to hire enough staff to carry out the tasks. 

Improve productivity by investing in a POS system for your business. It allows the teams to concentrate on other business areas that require attention.

Labor or employee performance tracking will let you know how the teams or individuals are performing. It provides an opportunity to reward outstanding performers, thus motivation. It can also identify skill gaps that the company needs to fill.  

Final Thoughts

Companies operating in the modern environment must work hard to stay ahead of the competition. It is so much more than the quality of goods and services. It is about the type of experience you give customers. 

The same applies to creating a conducive environment for staff. As we have shared, a POS system can take care of all this. Consider investing in one as a must-have for the business.