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What Is a POS System?

Every business needs a POS system, but <a href="https://www.investopedia.com/terms/p/point-of-sale.asp">what exactly does this system do</a>? And how do you choose the best POS system for your small business? We’ll answer these questions and more. 
<h2>What is a POS System and How Does it Work?</h2>
A POS system is a point-of-sale system. Store employees typically use POS equipment to ring up customers when they make a purchase. <a href="https://squareup.com/us/en/townsquare/what-pos-system">POS systems</a> combine hardware and software to let you accept payments.
You use your POS system to accept payments and keep track of product sales. Stores will typically have physical POS terminals—nowadays, there is advanced software that turns your smartphone or tablet into a fully functional POS terminal. You will also use a POS system for online transactions.
Modern wireless POS systems and applications that turn mobile devices into a POS system let you easily accept payments on the go. You can use these at pop-up stores, for deliveries, at events, and more.
Here’s a quick step-by-step guide on the POS process:
<ol>
<li style="font-weight: 400;" aria-level="1">Scanning the product: Your customer will bring the item to a cashier or employee, who will scan the product. This will likely be with a barcode scanner, but you can also manually enter items into the POS system. Some systems even let you scan items with a device camera.</li>
<li style="font-weight: 400;" aria-level="1">Displaying the price: The POS system will be programmed with all relevant pricing information and be ready to calculate sales tax. So, it will display the total amount owed.</li>
<li style="font-weight: 400;" aria-level="1">Updating your inventory: The POS system will also update your inventory by modifying records of the number of products you have in stock.</li>
<li style="font-weight: 400;" aria-level="1">Paying for the transaction: Your customer will pay for their purchase using a credit card, debit card, tap-to-pay, cash, loyalty points, gift card, or another method.</li>
<li style="font-weight: 400;" aria-level="1">Finalizing the transaction: The sale is considered complete once the customer’s payment goes through. Your customer will receive a digital or printed receipt, and your POS system will have a record of the transaction.</li>
</ol>
<img decoding="async" loading="lazy" class="alignnone wp-image-25054 size-large" src="https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-1024x555.png" alt="paying via credit card" width="640" height="347" srcset="https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-1024x555.png 1024w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-300x163.png 300w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-768x416.png 768w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-600x325.png 600w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-360x195.png 360w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-160x87.png 160w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-350x190.png 350w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-100x54.png 100w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-633x343.png 633w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card.png 1200w" sizes="(max-width: 640px) 100vw, 640px" />
<h2>Why You Need a POS System</h2>
Any business that sells products and services needs a POS system. These systems are crucial for automating transactions, monitoring sales, facilitating convenient payment, and streamlining all of your records.
A good POS system lets you:
<ul>
<li style="font-weight: 400;" aria-level="1">Accept a variety of payment methods</li>
<li style="font-weight: 400;" aria-level="1">Easily complete sales</li>
<li style="font-weight: 400;" aria-level="1">Track your inventory</li>
<li style="font-weight: 400;" aria-level="1">Monitor buying trends</li>
<li style="font-weight: 400;" aria-level="1">Collect data and view reports regarding purchases</li>
<li style="font-weight: 400;" aria-level="1">Track sales metrics and goals, including sales patterns, gross revenue, and inventory changes</li>
<li style="font-weight: 400;" aria-level="1">Capture data about your customers</li>
<li style="font-weight: 400;" aria-level="1">Integrate with other systems for even more insights</li>
</ul>
Additionally, having POS software makes your business seem more credible and professional, especially in the case of a smaller store.
It is also worth mentioning that the ability to accept multiple payment methods is crucial for business success. This capability aids businesses in meeting customer expectations and maintaining high levels of customer service. This can help you attract clients to your store over competitors. It also prevents customers from leaving mid-transaction because you don’t offer the payment method they prefer.

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<h2>How to Choose the Right POS System for Your Business</h2>
<a href="https://www.techradar.com/news/how-to-choose-the-right-pos-system-for-your-business">Choosing the best POS system</a> for your small business will depend largely on your needs and your budget. As mentioned, there are now many applications that let you turn your smartphone or tablet into a POS system. As such, you don’t necessarily need hardware, although it can still be incredibly helpful.
As you compare point-of-sale equipment for small businesses, ask yourself a few questions:
<ul>
<li style="font-weight: 400;" aria-level="1">How many terminals do you need?</li>
<li style="font-weight: 400;" aria-level="1">Do you plan on expanding in the near future?</li>
<li style="font-weight: 400;" aria-level="1">Are you switching from a different system or starting from scratch?</li>
<li style="font-weight: 400;" aria-level="1">What do you need your system to do?</li>
<li style="font-weight: 400;" aria-level="1">What are the biggest challenges that you hope your POS system will overcome?</li>
</ul>
Most businesses will benefit from the following software and hardware features on their POS system. Even if you only need a small business POS system, these features ensure that each sales transaction goes smoothly and is accurately recorded. 
<h3>POS Software Features to Look For</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Credit card processing</li>
<li style="font-weight: 400;" aria-level="1">PCI compliance and security</li>
<li style="font-weight: 400;" aria-level="1">Acceptance of chip cards</li>
<li style="font-weight: 400;" aria-level="1">Acceptance of mobile payments</li>
<li style="font-weight: 400;" aria-level="1">Support for tipping (if applicable)</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://www.podium.com/guides/modern-payment-processing-guide/">Text-to-pay</a> options</li>
<li style="font-weight: 400;" aria-level="1">Inventory management</li>
<li style="font-weight: 400;" aria-level="1">Refunds and returns</li>
<li style="font-weight: 400;" aria-level="1">Invoices and billing</li>
<li style="font-weight: 400;" aria-level="1">Reporting and analytics</li>
<li style="font-weight: 400;" aria-level="1">Customer support</li>
<li style="font-weight: 400;" aria-level="1">eCommerce flexibility</li>
<li style="font-weight: 400;" aria-level="1">Customer engagement and customer-facing experience</li>
<li style="font-weight: 400;" aria-level="1">Integrations</li>
<li style="font-weight: 400;" aria-level="1">Employee management (or integration with your system)</li>
<li style="font-weight: 400;" aria-level="1">Customer relationship management (or integration with your system)</li>
<li style="font-weight: 400;" aria-level="1">Accounting</li>
</ul>
<h3>POS Hardware Features to Look For</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Display screen</li>
<li style="font-weight: 400;" aria-level="1">Credit card reader</li>
<li style="font-weight: 400;" aria-level="1">Receipt printer</li>
<li style="font-weight: 400;" aria-level="1">Barcode scanner</li>
<li style="font-weight: 400;" aria-level="1">Cash drawer</li>
<li style="font-weight: 400;" aria-level="1">Portability</li>
<li style="font-weight: 400;" aria-level="1">Scales (if applicable)</li>
<li style="font-weight: 400;" aria-level="1">Self-ordering kiosks (if applicable)</li>
<li style="font-weight: 400;" aria-level="1">Kitchen printers (if applicable)</li>
</ul>
<h3>Other Features to Consider</h3>
In addition to the specific hardware and software features to look for in a POS system, you will also want to pay attention to pricing. Most POS systems will have an initial cost for the hardware and a monthly cost to use the software. The cost of the software will vary depending on how many features and capabilities are included.
When calculating prices, remember to account for the payment processing costs, especially if your chosen POS system only works with a specific payment processor.
You also want to consider how user-friendly the system is. You don’t want your team to have to call support or consult the manual constantly. An intuitive POS system also ensures shorter onboarding or training sessions, allowing your staff to focus on more important tasks.
Think about the future of your company and whether your chosen POS system is scalable. Can you easily add additional terminals as your business grows?
Don’t forget to pay attention to the company offering the system as well. You want to buy from a financially viable, well-established company with a strong reputation. This will help ensure the quality and functionality of the system.
It&#8217;s also smart to look for the best POS systems for small businesses that are specific to your industry. You don&#8217;t need your point of sale (POS) system to be fully customized to your business, but it should be regularly used by other businesses in your niche. This will confirm that your fellow small business owners have access to the features you need. After all, retail POS systems and restaurant POS systems will have very different needs. 
<img decoding="async" loading="lazy" class="alignnone wp-image-25055 size-large" src="https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-1024x555.png" alt="paying via credit card image" width="640" height="347" srcset="https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-1024x555.png 1024w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-300x163.png 300w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-768x416.png 768w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-600x325.png 600w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-360x195.png 360w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-160x87.png 160w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-350x190.png 350w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-100x54.png 100w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image-633x343.png 633w, https://cms.podium.com/wp-content/uploads/2022/12/paying-via-credit-card-image.png 1200w" sizes="(max-width: 640px) 100vw, 640px" />
<h2>Tips for Modernizing Your Payment Collection Processes</h2>
When you&#8217;re looking at a POS system, it is the perfect time to consider <a href="https://www.podium.com/guides/modern-payment-processing-guide/">modernizing your payment collection processes</a>. It is no longer enough to just accept cash and credit cards. You need to accept chip cards and tap-to-pay cards to appeal to a wider audience. You should also accept mobile payments via digital wallets.
Think outside the box and do what you can to accept more modern payment methods, such as text-to-pay. This feature is growing in popularity because of the convenience it provides.
If you start offering additional payment methods or you upgrade your systems, let your customers know. They will be happy to learn they can text-to-pay or use their tap-to-pay credit card. They will appreciate the extra security of using a chip-enabled credit card instead of having to swipe it.
<h2>Start Taking Payments with Podium</h2>
<a href="https://www.podium.com/payments/">Podium</a> is an excellent option for those in search of a way to accept more payment methods. Best of all, it seamlessly integrates with all of the other Podium services, from gathering reviews to gathering customer data and leads. 
Podium offers personalized features for your business and industry and the features your customers want, such as text-to-pay. You also get access to high-quality hardware along with integrations that provide insights.

What Is a POS System?

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