not sure if you should add a point-of-sale ( POS ) terminal to your little business ? The Ascent covers the many benefits offered by a POS terminal in addition to processing accredit circuit board payments. When you started your small business, you may have only accept cash or checks. As your business grows, though, you ‘re leaving money on the table if you do n’t have a point-of-sale ( POS ) terminal to process credit rating wag transactions. point of sale devices offer features beyond accepting accredit card payments. We ‘ll go over those benefits and how POS systems work, so you can see how adding one would contribute to your humble business ‘s buttocks wrinkle.
Overview: What is a point-of-sale terminal?
A POS terminal is any digital device with POS software installed on it : a computer, laptop, tablet, or smartphone. A virtual terminal lets you accept payments over the phone or in early situations where a customer ‘s accredit batting order is not award. Beyond the terminal, early POS hardware includes :
- Credit card terminal
- Barcode scanner
- Receipt printer
- Cash drawer
Some POS systems allow you to use your own hardware, but others require that you buy their proprietary terminals, hand-held devices, and related hardware .
Benefits of using a POS terminal
The traditional cash register is a classical example of siloed engineering : You can use it to ring up purchases and accept cash or check payments, but nothing else. A polonium machine does this — plus accept credit card payments — but you ‘ll enjoy many other benefits .
1. Increased revenue
A POS terminal will prove its worth where you ‘ll notice it most — the bottom line — thanks to these factors :
- Customer convenience: Customers want to use their payment method of choice, which is increasingly credit and debit cards. Accepting these payments also promotes impulse purchases because customers don’t have to find the nearest ATM.
- Multiple sales locations: Whether you have standalone POS terminals or use a card reader on your smartphone for mobile payments, conduct transactions anywhere from a brick-and-mortar location to a popup store to a customer’s house when making a delivery.
- Better security: Less cash on hand reduces losses if you’re robbed, and POS vendors are continually improving online security of customer data and chargeback protections to reduce losses from fraudulent purchases.
even without the other benefits below, a POS concluding is worth the investment for the extra gross it generates immediately .
2. Sales metrics
A pile of cash and checks at the end of the day does not tell you how you made that money. A good POS system provides performance analytics about your sales :
- Overall sales: Track the total number of transactions, average revenue per transaction, amount of refunds and returns, and your customers’ payment methods.
- Product performance: Learn which products are and aren’t selling, the days and times they sell best, and how they perform at different price points.
- Employee performance: Identify high-performing employees to inform scheduling, set sales goals, and create incentives.
Data from these areas allows you to experiment with your sales efforts to discover what works best for your modest business .
3. Inventory management
The POS system powering your sales terminal provides crucial information about your inventory at one or more locations :
- Restocking: Set up alerts when inventory is running low. Some POS systems will automatically order more inventory.
- Returns: Automatically update inventory when items are returned.
- Shrinkage and slippage: Track inventory shrinkage due to theft and slippage, and items sold at prices lower than set by management.
Whether you ‘ve been tracking inventory on an ad hoc footing or with standalone software, a good POS application can track this within a unify system .
4. Customer management
Every POS terminal transaction captures data to personalize a customer ‘s feel :
- Basic customer information: Use contact information to send order updates to customers, make deliveries, and identify customer product preferences.
- Marketing: When customers opt in, create targeted email campaigns based on their past purchases and other behaviors or demographics.
- Rewards programs: Loyalty programs are an effective way to promote repeat purchases and attract potential customers when your rewards align with their interests.
Your grandfather ‘s cash cross-file sees each purchase as a standalone transaction. A POS terminal and accompanying software enable you to maximize customer life value ( CLV ), the sum projected gross earned from each customer account .
How POS terminals work
You have two options for your POS terminal based on whether its software is installed on locate or is web-based. daily operation to process sales is the same. On-site software, installed on the end or your own server, used to be the norm, but these systems tend to be more expensive than their web-based counterparts. You do n’t need an internet connection, though, to process payments with on-site software, and data is stored locally. Web-based POS terminals are more common today due to their easy frame-up, which lone requires logging into an on-line interface. You must have an internet connection to process credit cards, and information is stored on-line in the cloud .
1. Software setup
Before you use your POS terminal, you must set up your POS software :
- Create your account locally, or log into an online interface.
- Add the products and services customers will purchase.
- Add merchant account and payment gateway info for credit card sales.
- Set up sales tax rates.
- If applicable, set up tipping options.
- Customize receipts with business information and your return policy.
- Create employee logins and manage permissions.
- Connect to third-party software.
After the initial software frame-up, sales interfaces are designed for easy use and necessitate minimal trail .
2. Hardware setup
Log into your local or web-based account, and connect any items you ‘re using to the POS terminal, including :
- Card terminal
- Barcode scanner
- Receipt printer
- Cash drawer
3. Process transactions
once your software and hardware are set up, you ‘re ready to process transactions :
- Scan a product barcode, or select it from your terminal’s interface.
- Use a card reader to initiate payment.
- Have the customer approve the purchase.
- Print/email a receipt.
As you process more transactions, you ‘ll collect the information necessity to capitalize on other POS terminal benefits : sales metrics and inventory and customer management .
The best POS terminals for small business owners
Choosing the “ best ” POS system for your little business depends on multiple factors : sales volume, industry, and number of sales locations. however, the three options below are well worth considering .
1. Stripe Terminal
Stripe is The Ascent ‘s top-rated on-line payment solution, but it besides has a face-to-face retail POS organization and can integrate both sales channels into a single system. Stripe Terminal requires the pre-certified card and nick readers it provides. Its data encoding processes are updated automatically through Stripe ‘s remote control management tools . Stripe ‘s mobile poster proofreader is $ 49, and a countertop terminal is $ 299. No monthly subscription is required, but you ‘ll pay fees for each credit wag transaction. Stripe POS features do not include built-in stock or customer management, but it offers third-party integrations to add that functionality .
Toast is a restaurant POS organization designed to handle front of house, back of sign of the zodiac, and elastic menu. Choose from editions for fine boom, fast casual, and cafe that allow you to set up floor plans to track orders. Toast ‘s bar POS system lets customers purchase drinks at multiple locations within a venue on the like pill . Toast POS price includes a monthly software subscription for each terminal, transaction fees, POS hardware and initiation, and accessory integrations. The Toast newcomer kit, which includes a terminal, card reviewer, and receipt printer, is $ 999 plus $ 75/month .
Lightspeed offers POS software for retail stores and restaurants. Lightspeed Retail is best for mid-size and larger retail businesses, while Lightspeed Restaurant is desirable for cafe, bars, and full-service restaurants. Lightspeed Retail includes inventory management features that expand the capability of its POS terminal : search for armory items, set prices, and blue-ribbon sales channels . Lightspeed does not require proprietary hardware, and its web-based software runs on Google Chrome and Firefox browsers. Lightspeed Retail plans range from $ 69/month to $ 229/month, plus transaction fees.
Lightspeed Restaurant costs $ 69/month to support one POS register, plus transaction fees. If you require more registers, Lightspeed has quote-based plans .
Increase your cash flow now
A POS terminal does more than expand your payment methods. Your little commercial enterprise needs the multiple benefits that come with it — sales metrics plus stock and customer management — to thrive in today ‘s business environment .