Learn about the differences between a traditional cash register and a POS system.
- A traditional cash register is a basic system used to store cash and record sales transactions.
- In addition to recording sales and storing cash, a point-of-sale (POS) system has features for inventory tracking, employee and customer management, and integrations for other business programs like your accounting software.
- POS systems are available at price points that can fit any business's budget and needs, and are the best choice for most small business owners.
Processing sales transactions is an essential part of running a business, and the cash register system you purchase to handle those payments is an important decision. With several register types available, small business owners are often left wondering, "Which is the best cash register system for my business?"
As is the answer with most things in business, it depends.
Whether you own a local retail business or a multilocation restaurant, there is a register system to fit your needs. You can choose from traditional cash registers, point-of-sale (POS) systems and mobile POS systems.
To help you choose the best cash register for your business, we analyzed the different types of cash register systems to determine why you might prefer one option over the other.
What are the different types of cash registers?
There are several systems available to help you process and manage sales transactions. All cash registers fall into one of three categories: traditional cash registers, POS cash registers or mobile POS cash register systems.
Each option has its own benefits and limitations. The system you should choose depends on your business size, industry, budget, the features you need and your personal preferences.
Traditional cash register
A traditional cash register, also known as an electronic cash register, is a basic system used to manage sales. Ron Mansfield, sales team lead at Flux Shop Manager, a POS system for automotive repair shops, said a traditional cash register typically comprises an adding machine and a cash drawer. Its capabilities are very basic; it essentially just adds up the cost of items, automatically applies sales tax if required, and generates a total. A cash drawer opens when a receipt is printed.
Mansfield said that, with the increase of newer payment types like Apple Pay and Bitcoin, these systems aren't as popular or practical as they used to be. Since this type of system is a bit outdated, it is not ideal for most businesses.
POS cash register
A POS cash register, also known as a computerized register or a POS system, is more advanced than a traditional cash register and commonly used by small businesses. These modernized systems can do a lot more than just tally totals and print receipts.
"A POS cash register is a computerized register that is connected to a wider control system and will usually have multiple individual registers on the network processing sales and accepting payments," said John Moss, CEO of English Blinds. "POS systems also track inventory and stock levels and report back on these, track sales and sales patterns, and even monitor customer data via loyalty programs."
Depending on which features you need, you can choose a very simple POS system or one that has advanced capabilities and integrates with third-party business applications, like your accounting software and email marketing service. Many small business owners like cloud-based POS systems that run on tablets or from browsers, as they're both affordable and full-featured. A fully integrated point-of-sale system can automate business operations, reduce human error and increase business efficiency.
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Mobile POS cash register
Mobile cash registers, also known as mobile POS systems or mobile credit card processing solutions, have many of the same functions as standard POS systems while offering more flexibility in processing and managing payments, since they run on tablets or smartphones.
"Mobile systems are handheld devices, either a mobile phone or tablet, that come with a card reader for payments," said Mansfield. "Bluetooth printers are occasionally used for receipts, but often receipts are emailed to the customer instead."
William Dawsey, vice president of finance and payment solutions at Chetu, a custom software developer that works with payment service platforms, said that mobile POS solutions can be very versatile in the types of payment they accept.
"Developments in payment technology allow transactions to be held on ubiquitous devices, such as mobile phones, that utilize near-field communication (NFC), Quick Response (QR), barcode configurations, Bluetooth Low Energy (BLE) and magnetic secure transmission (MST) technology," said Dawsey. "Additionally, mobile payment systems can utilize cryptocurrencies and digital wallet services."
Although mobile POS systems are designed to accept credit card payments, they must be paired with a cash drawer if you need to accept cash payments. Mobile POS systems are ideal for mobile businesses like food trucks, retail shops that sell at local events, and restaurants that want to accept payments tableside.
What is the difference between a cash register and a POS system?
The primary difference between a traditional cash register and a POS system is the breadth of functionality that POS systems provide. Traditional cash registers are simple devices used to record sales transactions and dispense cash, while POS systems do much more.
"The key feature of traditional cash registers is that they're stand-alone units that aren't connected to any centralized system, or to other registers within the store or company," Moss told business.com. "They don't provide any reporting features and sometimes can only be operated manually by means of inputting pricing data."
Although you can use traditional cash registers to complete business transactions, they are limited in their capabilities, which is inconvenient for business owners. In addition to recording sales and storing cash, POS systems help business owners manage their sales, product catalog or menu, inventory, analytics, customers and employees.
"POS systems are fully functioning payment systems that facilitate digital transactions of currency and, as such, adhere to contemporary consumer protection standards, including Payment Card Industry Data Security Standard (PCI-DSS), Payment Application Data Security Standard (PA-DSS), EMV, Check 21 and other payment standards," said Dawsey.
As the need to accept digital payments increases, business owners should place high importance on finding a system that complies with current security guidelines to protect their customers' private information.
When would you want a cash register vs. a POS system?
Traditional cash registers are much cheaper than most POS systems, so they may be useful for very small businesses working with a tight budget. Moss said that traditional cash registers are typically only beneficial to business owners who operate one small store with one register and have the time to manually check, monitor, and control things like stock levels.
Additionally, he said, business owners who use a traditional register will also have to know every item's price or have a quick way to determine them. These users will need other ways to determine things like sales trends, popular items and fluctuations.
"As is self-evident, this means that a traditional register is very limited and will only be appropriate for a very narrow demographic of store owners, and aside from the purchase cost saving of a traditional register, they offer few to no advantages and many disadvantages," said Moss.
Dawsey also warns against using traditional cash registers for transactions in a predominantly cashless society, given the shift in fraudulent activity accountability to retailers and small businesses. Even in a business that mainly takes cash, he said, traditional cash registers create data silos, hindering integration with other critical business software.
Conversely, a POS system can be beneficial for businesses of all sizes and will likely be more desirable for your business than a simple cash register. Although the best POS system for your business will depend on your specific needs and budget, several options are available.
If you are working with a tight budget, you may consider starting out with a free POS system, and then switching to a robust paid version when your needs and budget permit it.
"Many small business owners are reluctant to invest in both the purchase cost of a POS system and also the time required to train management and operators in its usage," Moss said. "However, POS systems pay for themselves many times over in a reasonably short period of time when you view the big picture."
Although a POS system may seem like a costly acquisition, it is a worthwhile investment for most businesses. Assess your needs and weigh the pros and cons to determine if a traditional cash register or a POS system is best for your business.