• product-marketing

How can a POS system operate?

In essence:

POS is the setup you've got set up for processing face-to-face payments from clients.

POS isn't a standalone system or process -- it is a constellation of things that collectively let you process customer-facing trades efficiently and streamline business processes connected with your earnings.

The setup will change in look and functionality based upon your choice of engineering, what payment methods you accept, whether you print paper receipts, the way you record sales and organise end-of-day bookkeeping, and the stock systems you have in place for your merchandise.

Let's return to the fundamentals and talk about how client transactions are processed, what a POS system typically includes touch on some of the choices now available to companies.

Only a couple decades ago, a point of sale system was, in its simplest form, a cash register. The first cash registers would not even"know" what products price. The man operating the till would manually input the costs of purchased items, frequently with the support of price tickets.

They would then spend the money, put it in the cash drawer and hand the customer a paper receipt. Sometimes, the sole record of this trade are the paper copy of the roll.

Many times, they would have a barcode reader so there's absolutely no need for manual cost entrance, while also storing transaction details electronically.

Nowadays, things are a lot more sophisticated. When some retailers still use systems as explained above, many are continuing on to advanced cloud-based POS systems where information is stored on the internet.

Key Elements of a POS system

Modern POS systems consist of hardware and software elements. The program is what registers, stores and processes transaction information, but there are crucial differences in the way that it's stored and used between distinct POS software systems.


The team processing the transactions utilize the frontend interface, normally on a touchscreen monitor or tablet display. The backend is obtained individually in a browser or application window on the same device or different computer or mobile device.

Irrespective of your type of POS applications, these two will be connected and synced, but there are two following ways that information can be saved:


Software is set up'locally' in your server, i.e. on a computer based on the assumptions of your shop.

Requires you buy one or more software licences.

You will have to maintain and manually upgrade this sort of software.

As all of the program is based on your closed computer system, it doesn't require the internet.


System is hosted online, i.e. information are saved on your POS provider's servers, helping you to access it from any computer browser.

Also called software-as-a-service (SaaS), this system is automatically maintained and updated by your POS provider, although it is always recommended you are using the newest version of the POS app.

For a little while, on-site POS applications has become the standard for computerised POS systems, but it's now more common to use cloud-based or hybrid systems relying on both the web and local hosting. On-site POS software tends to be costly to set up, often requiring skilled aid and maintenance. Cloud-based systems are usually cheaper (generally paid as a fixed monthly fee ) and with more options to integrate with other applications programmes.

In the end, POS applications can differ hugely in terms of what attributes and design they have. Each business sector has their particular needs that specialised POS applications accommodate for. As an example, restaurants require a table design to attach orders to and might need a self-evident menu interface so diners can order at their tables before being served. Specialised restaurant POS apps can provide this and a lot more restaurant functions as part of the same bundle.

Let's look at a number of the main hardware components.

Interface/device in which you register trade details: Could for example be a cash register with switches, touchscreen PC monitor or mobile device with a POS app.

Cash Shop: Used to save the daily takings and money float together with cheques, vouchers, receipts and slips applicable to accounting.

Receipt printer: Used to print receipts for clients or end-of-day accounts for cashing up.

Barcode scanner: Commonly utilized in retail environments with many distinct products. Commonly linked with the POS system's stock level counts so that it automatically upgrades merchandise counts based on items sold.

Card machine: Used to process payments made by credit or debit cards or mobile pockets through NFC. Conventional card machines need software installation (if not included) and SIM card or landline cable, whereas app-based card readers use WiFi or network data from a connected mobile device.

Network devices: Whether you are relying on a cloud-based or on-premise system, you are most likely to require a network set up for an online connection or to join your computer system on the premises. This may be e.g. a router, modem or modem linking several regional computers.

The hardware and software that is best depend on your business requirements. You might, by way of instance, not require a cash drawer if nearly all sales are card. Or maybe you will need a portable system which works in a marketplace in addition to inside. Let us look at a few examples of different points available.

Little café using easy cloud-based POS

A little café could decide to accept cards using a cloud-based POS application on an iPad connected to some Bluetooth-connected compact card reader. If taking money, a cash drawer is essential for optimum security. It's now the standard for POS apps to send receipts through text or email, so in theory, a funding POS setup could exclude a receipt printer. However, it's still a necessity in some countries to give a paper receipt when asked for this, so you might be unable to do without it.

With the cloud-based POS, the company owner can assess sales from home in the POS back office accounts and send a daily Excel report to the accountant. The man cashing up in the cafe only should clock out on the iPad, assess discrepancies between enrolled transactions and real cash and card takings, organise banking and some other significant end-of-day actions.

A shop might opt for an onsite POS system if their online isn't trustworthy or they prefer using all data stored in their premises only. The equipment is generally non-portable, setup requires professional assistance, and the applications usually needs an IT person to physically come and execute them on-site. All these costs add up, hence the reason it's principally large retailers with the tools that are still choosing on-site POS.

Retailers also have particular functionality which needs to be integrated from the POS system, spanning from an inventory library to keep track of inventory levels to hardware tools such as a scale onto the counter (for meals priced according to weight), barcode scanner and a device for carrying off alert tags of liquor bottles or clothing. The most complicated checkout system is generally a supermarket till stage, due the selection and volumes of merchandise sold. The more specialised the goods sold, the more specialised the point of sale could be.

Food and beverage sectors like restaurants need a different set of attributes in the POS software compared to retailers. For one, it may require a way to send food orders to the kitchen in real time (possibly through a connected kitchen printer), tipping options and a booking system for carrying table bookings.

If the restaurant has primarily selected a cloud-based POS system but their net isn't 100% reliable, they could connect an onsite server allowing the software to operate when the web is down and sync the data in the cloud once the web is back up and running. This permits restaurant chains to profit from a cloud-hosted system where all sales data across the locations can be tracked in real time from any online browser, while also relying on local hosting as a backup.

Alternately, some cloud POS software provides an offline mode which keeps the POS working during no connectivity, then syncs all of the new information with the backend once the local system is back online.

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