Do you need a POS system?
Point of Sale Systems | Buyer's Guide
As with any significant business purchase, buying a POS system
should involve careful research into what the market has to offer -
as well as what your own needs are.
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A computerized POS system can probably pay for
itself within a year or two if you have annual revenues of
around $700,000 to $900,000. Smaller businesses, with revenues
around $400,000 and above, can also get considerable benefits
from a POS system, although they may be less direct. Below that,
an electronic cash register can probably meet your needs for
considerably less money.
In many cases, new businesses choose to invest in a POS
system before reaching those revenue levels - or before having
any appreciable revenue at all. |
They may want a POS system simply for the reporting features, or
they may see it as an investment that can boost efficiency starting
on opening day. A POS system is rarely totally unnecessary - most
often, the only question is how soon it can pay for itself.
Save money
- Eliminate shrinkage. A computerized point of
sale system can drastically cut down on shrinkage, the inventory
that disappears from your store or restaurant due to theft,
wastage, and employee misuse. Because employees will know that
inventory is being carefully tracked, internal shrinkage will
dwindle.
- Improve accuracy. Whether you use barcode
scanning or not, POS systems ensure that every item in your store
or on your menu is sold for the correct price. Your staff will
never mis-enter or guess prices again, and you can change prices
with just one tweak in the computer.
- Get better margins. Detailed sales reports
can help you focus on higher-margin items. By moving items within
a retail location or promoting under-performing dishes in a
restaurant setting, you can help boost sales of high-profit items.
Get more information
- Know where you stand. At any point of the
day, a POS system can instantly tell you how many of a particular
product have sold today (or last week, or last month), how much
money you have in your cash drawer, and how much of that money is
profit.
- Better manage inventory. Detailed sales
reports make it much easier for you to keep the right stock on
hand. Track your remaining inventory, spot sales trends, and use
historical data to better forecast your needs. Often, the software
can alert you to reorder when stocks run low. Many store owners
who think they know exactly what trends affect them find a couple
of surprises once they have this data.
- Build a customer list. Collect the names and
addresses of your best customers as part of standard transactions.
Then use the list for targeted advertising or incentive programs.
Increase productivity
- Reduce paperwork. POS systems can
dramatically reduce the time you have to spend doing inventory,
sales figures, and other repetitive but important paperwork. The
savings here: time and peace of mind.
- More efficient transactions. In retail
settings, barcode scanners and other POS features make checkout
much, much faster. Restaurants will find their order process
greatly streamlined as orders are relayed automatically to the
kitchen from the dining room. In both cases, your customers get
faster, more accurate service.
Keep in mind that realizing these benefits requires a commitment
to utilizing the POS system capabilities to their fullest. Without
appropriate training and ongoing analysis, even the most
sophisticated POS system will be no more useful than a basic cash
register.
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