Do I need a POS system?
I have been manually keeping track of purchases and a friend said I need a POS system. I am not that technical and not sure if this is overkill for a small business. Does anyone have experience with POS systems?
A POS is so simple to acquire these days and it offers support, reports and so much more than you can do manually. Even with a few small transactions a day, it will be good for taxes at the end of the year, organization and a better understanding of business trends, times of transactions etc. Square offers a great way to do that very inexpensively. There are a lot of really inexpensive options that will help you save time so you can grow your business rather than filtering transactions manually.
I'm not an expert when it comes to POS system, but I agree with what others said. If you can handle and manage your business manually in keeping track of purchases, then there's no need for the system. But if you are having problems or there's a complaint from one of your customers, now is the time to consider the advice of your friend. For your small business, you can start all things manually and gently until the time comes that your business grows rapidly and you're having hard times to keep your business on track, the next thing to do is for you to look for an advanced technology that can help you manage your business. And also, there's nothing wrong if you want to be ahead. If you want to have the system ahead before the problems occur, it is a good preparation for the situations that may come up. Be wise and observe your business first, it can help you in your decisions.
Before suggesting the need for the PoS it is crucial that you understand the necessity of the system. A small business needs a lot of attention and care in order to establish and grow- and unlike being a manager in a well oiled machine - a small business has a 1,000 moving parts and keeping track of all of them is crazy to say the least - thus automating small tasks will help eliminate costly mistakes. PoS systems range from a few $100 all the way to the top. You have a lot of SaaS based PoS devices - think square- that allow you to just use your iPad to not only process the sale but also the payment. Pos Systems come with integrated payment gateways or you need a separate payment terminal (incase you wish to accept credit cards). IF you are starting up - I would always recommend a PoS for the following reasons:
1. Keeping track of sales
2. Keeping track of purchases
3. Understanding which product sells better (for your product mix)
4. Understanding which product is more profitable (for your profit matrix)
5. Offering more services - such as returns (if your business allows you to handle it)
6. Ensuring your taxes are computed correctly (VAT, service tax, federal, state etc) and finally
7. One less thing to worry about
If you are not "that technical" - my recommendation would be to go with a service like Square: though the service charge/processing fee is a little on the high side, the ease and comfort of working with a single vendor for PoS, reporting & payment processing is well worth the little extra.
Hope this helps.
Samantha - I agree wholeheartedly with Ed Drozda. You need to know what sparked the advice in the first place.
One additional point to consider from the opposite perspective. If you plan to grow your business, remember that at some point your ability to track these things by hand starts to fail. If you are growing slow and steady, then the POS conversation doesn't need to happen at this point. But if you're growing like a thoroughbred out of the gate, take the advice and at least look into the POS system. I've always found it more comfortable to be out in front of the technology - rather than behind it.
Good luck and let us know if we can help you further.
First question to answer for yourself is, when you do the tracking manually and link a monetary value to the time you spend doing manually the tracking of purchases and stock, would the time you save be worth the cost of a POS system?
Secondly, can the reporting you want be generated with the manual process, again take time as the main monetary value?
Thirdly, do you believe that you can save more by having a computerized stock system and help in the costing?
The last question is your suppliers invoices and account, plus if you sell on credit, are you in full control of these accounts.
If you answers are no to more than 50% of the questions, I will suggest you start looking at a POS system that is small but you can build bigger as your business grows.
Hey Samantha, I've long been one of those folks who listens to the well meaning advice of others and occasionally ignores my instincts. Seems as is if you are taking the wise path. I am sure your friend is well meaning too so let me ask- is their guidance the result of a problem they had with you? Are you in fact (more importantly your customers) having issues with your lack of a POS system? If the answer to these questions is clearly NO, overkill it is. Will that change? Maybe, but for now I'd focus on my core strengths. Oh, for the record I do not have personal experience with POS systems.
Hi Samantha, I had a small high street shop, and tried a few POS systems. It's not worth spending money on until you've developed your business enough to have a full list of "wants" from your POS software. However, there are some great free tools available! izettle card reader is free (usually) to obtain, and has POS software with the account that is also free, holds plenty of products, creates receipts, manages your inventory and creates reports for you - it even tracks VAT. So I would recommend using this until you grow enough to know what you really need.
While there's no doubting you can run a small retail business with out one, I would 100% be supportive of your friend who has suggested making the move to a POS system.
If nothing else you'll save a significant amount of time but also get some very cool insights and reporting into your business, not to mention to have the ability to sell anywhere and anytime.
Unsure exactly what type of business you run but for our kids and toddler products retail business (inventory based) we use Vend which works on an iPad through an app and so easy to use and best of all costs less than $100 a month. For our cafe though we use a service called Kounta which was more specifically built for hospitality with features like table service. Hopefully this helps. Let me know if you need more info.
I'm assuming by purchases you are referring to purchases made by your customers (i.e., sales). If you are referring to purchases made by your company for inventory/re-sale purposes, then you need an inventory management system rather than a POS system.
There are many relatively inexpensive POS systems available now, especially if you already use a tablet or smartphone. Square, Paypal, Shopify, even some banks (i.e., Capital One), offer card readers that plug into your device creating a POS system for you. The basic readers (swipe only) are usually free. The newer chip readers will cost you. They also automatically calculate and account for sales tax. If you use Quickbooks or Xero for accounting, then these POS systems can be set up to automatically sync transactions into your accounting system. Most will charge a transactional fee (typically between 2.5-3%) for credit card or debit card, but no fees are charged if all you are collecting is cash or check. Plans are available that have no monthly fees.
If you are currently recording sales manually, then maybe you are only doing cash or check transactions. A POS system will allow you to offer credit card, debit card, Apple Pay, Android Pay, and PayPal as options to pay. They also can be set up to automatically send receipts to your customers.
The time saved and the ability to provide customers multiple payment options combined with no monthly fees and a minimal transactional fee really provide a good argument for using a POS system.
Finally, here's a review of some popular POS systems - http://pos-systems-review.toptenreviews.com/
As some others have mentioned, not sure we have enough information to truly provide a "best" answer that is right for you.
Most notably, if you have an online store and you also sell in a retail space, then it seems to make a lot of sense to start researching a POS that can integrate both. Since you are a small business, Shopify is a reasonable investment where they can integrate data from a "Click & Mortar" model.
Like most things in life, it's about balance. In this case, it's a balance of cost, effort, and time. If you are finding yourself not having enough time to work ON the business due to you getting caught up with the minutia of running the business on a daily basis, then POS is worth considering. Of course, this advice is predicated that there are significant sales/volume that would keep you from working on the business.
Another thing to consider is that POS can provide and segment sales data in which you can better analyze your customer's trend and forecast your revenue and purchases. Excel could achieve similar results. However, one must consider at the current juncture of your business, is the savings in $ ending up costing you in time and effort?
Ka / VolumeSquared.com