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What is a POS system?

In this article we will explain what a POS system is, how it works and how it benefits your business.

A point of sale (POS) system is a terminal made up of two parts: the POS software and the POS hardware.

POS software is a digital technology platform that completes purchase transactions, records sales data, and allows you to view business performance reports. Point-of-sale (POS) hardware refers to physical components such as a cash register, receipt printer, card reader, barcode scanners, customer display screens, kitchen printers, grocery display systems, etc. kitchen, digital menu boards, scales, label printers, handheld computers…


How does a POS system work?


The basic function of a POS system is to complete sales transactions; however, data from these transactions can be used for many other business functions, such as: inventory tracking, financial reporting, and hosting of customer information for future contact and referral (some systems, such as NCR's, integrate seamlessly with accounting and marketing platforms and, in conjunction with the other features described, allows us to analyze data anBackersfield Cash Registerd make informed business decisions).


What are the main features of a POS system?


A POS system such as those offered by NCR or MICROS, are the central hub for most of your business needs: sales, inventory management, customer management, even employee benefits and tracking of hours worked and reduction of shrinkage and waste.

Among its characteristics we can find:

  • Record of transactions: Your employees can use the POS system to scan or type the items a customer is buying, add taxes and calculate the total amount of the sale. The system will then accept the payment and generate a receipt.


  • Inventory tracking and management: You can create a product catalog or menu in the system that you use when reviewing customer orders. The best point of sale systems also track inventory and automatically update quantities as items are sold. Some have low stock alerts and purchase order features.


  • Third-Party Integration: If you use other enterprise software to run your business, such as accounting, payroll, and email marketing software, you'll want a POS system that integrates seamlessly with third-party applications. This allows the various applications to share information automatically, eliminating the need to manually download and upload reports, customer lists, and other data.
  • Reports: The POS system can generate a variety of reports that help you measure business performance and analyze your sales, product, customer, and employee data.
  • Loyalty programs and customer management: Most POS systems have basic customer management tools that allow you to record customer information and create customer profiles that you can use for marketing purposes. Loyalty programs are often available as an add-on feature (which costs extra) or as an integration.
  • Employee management: The POS system should allow you to restrict the access and capabilities of the employees and record the sales of the employees. Some include time tracking and scheduling features, but these features are often add-ons or integrations.


There are countless features to consider, but there are Five in particular to pay attention to: payment processing, technical support, inventory, analytics, and POS security (transactions cannot be manipulated or erased).

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