Do it Your Own POS System

Pos Systems Buying Guide

Using a POS system in a hospitality industry or retail industry can make a huge difference in the way the business is operated. The POS will certainly improve efficiency and productivity, which in turn will increase the profits. The POS can be used to generate reports that are crucial to many business decisions.

If you are new to POS and wish to purchase one for your business, it is recommended to gain an insight into the functioning of the POS and the various models that are available in the market.

pos system

POS Systems:

The POS Systems come in many varieties and you must choose the one that fits your business. POS systems can be broadly classified based into All-in-one systems and Booksize systems. POS systems are used at many places like the Restaurant, Hotels, Hospitals, Retail stores, etc.

POS for Retail Operations:

The transactions and requirements in a retail operation is entirely different from the operations of a hospitality sector. A retail sector needs a POS system that is rugged to face the harsh retail environments. The Retail POS system used for different retail sectors are almost the same with minor changes. POS used in the retail sector is simple since the transaction is a one time process for each customer.

The POS systems for retail sector can also include optional kits that can recognise offers like 3 for $5, exchanges and refunds, and digital weighing scales. If you sell items like shoes or clothing that come in different sizes and colours, your POS system must support Matrixes. A matrix allows you to create an inventory and price entry for an item, say a shirt, and yet track the sales of the item based on colour and size.

POS for Restaurants:

The POS system required for a restaurant depends on the individual requirements. There are restaurants that use POS systems to increase efficiency and those that use POS systems to relay orders, reduce the customer transaction time and transaction errors.

POS systems for restaurants that work on the concept of quick service will have different requirements. In such cases, a POS that integrates with the monitor on the kitchen wall is what is required. As the order from the customer is being noted down, the same order will be highlighted on the monitor in the kitchen. This reduces the waiting time for the customer and improves the staff speed and efficiency. Time spent in the waiter/waitress updating the kitchen staff about the customer order is nil. This helps the waiter/waitress to attend to more customers, which increases the productivity of the restaurant.

The POS used at restaurants that work on the theme of fine-dining or table service need a Restaurant POS that can create and store open checks. This arises because the customers at such places will place more order with time. It is also equally necessary to track waiter/waitress responsible for the orders and the tables.

POS for Hotels:

The POS required for Hotels must have the ability to integrate the restaurant dining charges to the guests’ room charges. Transferring the charges must be easy and not a cumbersome process. However, the manager who is in charge of buying the POS system for the hotel must bear in mind that not all POS systems have the ability to integrate with the software used for hotel management.

Are you confused if investing in a POS system is worth the money? Here is a simple analysis to find out if the investment is a wise option or if sticking to the electronic cash register is.  If your business can make more than $900 on a busy night, it is worthwhile to invest in the POS, otherwise it may not be. Any hospitality or retail sector with annual revenue around $800,000 can increase their returns substantially by using a POS.

However, you can use the POS for other purposes like generating reports or using the POS as an investment on the opening day of the business.

How can you save money using POS:

The POS System can monitor the reduction in the inventory due to theft, misuse, waste etc. Using a POS is also a great way to ensure that the items in your shop or the items on the menu sell for the correct price. You can run sales report that will help you analyse the sales of the items and also provide you with the profit margins associated with all the items. You can focus on those items with the highest profit margin to attract more customers to buy the product.

Getting more information using POS:

Have you spent sleepless nights not knowing how many items you sold, if the tills tally, what was the profit generated, whether your employees are fudging accounts, etc? Using a POS can eliminate all these problems since they generate reports that can be balanced with your accounts. The reports also include details about the profit generated, items sold in each category and the number of items remaining in the inventory. The POS can alert you to replenish your stock and  also prompt you to take down the customers’ address and phone numbers at the checkout. You can use the phone numbers to send out alerts and special offers. If your business comes up with newsletter or promotional booklets, the address stored in the POS can be used to send out the same.

Improve your productivity using POS:

Using POS system saves you valuable time and provides accurate information. The time spent in checking the inventory and balancing the reports and sales figures by manually generated figures consume a lot of time and are prone to human errors. A POS is more efficient in generating daily reports with the utmost accuracy and also provide inventory figures.

Even though the above stated abilities of the POS are true, it is equally necessary to be trained to use the POS to its fullest ability. Of course, time must be allocated for training purposes but the long-term benefits surpass the time lost. Most of the POS are user friendly and do not require extensive training.

Care for your POS system:

The POS system works best with a dedicated line. However, if it is not possible to get a dedicated line, make sure that spikes and noises that might arise in the building do not affect the POS. Using blenders, slicers, microwaves, ovens and other electrical or mechanical equipments might cause fluctuations in the power supply that will affect the POS.

Choosing the right POS systems and software:

The POS terminals are connected to a computer terminal, which is the main component. There are two options for you to choose from. You can either buy the POS system and the computer from the same seller or have your own computer and simply buy the POS system. However, it must be noted that some sellers will ask for extra money to configure the POS to work with your computer if you do not buy the computer from their store. If you have to buy a computer, and are planning to do so from a different dealer, please think twice. It is always easier to manage the entire POS system and the computer by buying it from a single dealer. This way you need not run around if there is a maintenance work to be carried out or if your POS system or the computer faces manufacturing problems. Setting up the system and the computer, and support from the dealer is easier.

If for some reason, you have a computer purchased from a dealer not dealing with the POS system, make sure that the POS dealer has all the specifications about your computer to avoid compatibility issues. The POS system requires an average computer since the application is not demanding in terms of memory usage i.e., RAM and hard disk space. So, you can opt for a very basic model of the computer that can handle your POS application. USE the POS system for the POS related jobs alone. DO NOT connect the POS system to the Internet. DO NOT use the POS system to check your e-mails either. Take regular backups of the POS system. You can also setup automated backup schedules.

POS system Software:

You will have many options of the software to choose from for your POS system. However, most of the software functionalities will be the same or almost similar. All the POS software can handle your customer transactions.

A typical retail POS software can do the following: take a payment from the customer in the form of either cash or card, display items that are on sale, display the prices for the sale items, calculate taxes, handle returns and refunds, generate reports track your inventory and alert you when the inventory levels need replenishment.

A restaurant POS software is designed for different functions. The software can take special orders, create checks based on the table number or based on the customer. It can also track orders by the server ID or name, generate waiting list, move the customers bill in the bar to the table, generate sales report, etc. Since no two restaurant business are the same, the software comes with add-ons. You can choose to modify the software by using add-ons based on your requirements.

Internet Data Boards:

Internet Data Boards capture the snapshots of the day’s business, which can be accessed from any part of the world you are in. All you need to access the snapshots is an internet connection. The Internet Data Boards are useful to those who run franchises and for business people with multiple outlets. All the systems from the various locations can be programmed to download the daily transactions to a central server.

Multi-Management:

By using Multi-Management, you can share the settings on the POS but vary certain other settings. As an example, you can have the same menu at all the franchises but vary the flavors slightly based on the location or depending on the tastes of the customers.

Frequent Diner Program:

The POS software supports frequent diner program. A frequent diner program is a useful tool to bring back repeat customers. You can issue loyalty cards to the regular customers. Using the cards can get the frequent diners discounts and coupons. Special offers and promotional items can be provided to the frequent diners along with special deals. The customers can collect certain number of points on the frequent diner card and trade the points for an item on the menu or for a free take-home deal. The ideas that can be used with the frequent diner program are limitless.

The add-ons to the POS system will cost you more and make your POS complicated. It is the latter that is scarier than the former. The features provided by the add-ons are many and there is a fair chance that you will get carried away and buy more add-ons than required. Before you decide to buy the add-ons, make sure that your business has an absolute requirement for the same. The requirement must be such that owning a POS system without the add-on is as good as not having a POS system at all.

Most of the POS software vendors have a demo of the software on their websites. Some of them even allow you to download a full evaluation version on to your computer or CD. You can use the software to understand and test the ease of using it for your business before buying it. Before you head off to buy software for your POS system, it is better to do your homework on the various available software and their added features. Some of them come with free features and unique applications. Make a comparison list of the software available in the market and choose the one that best fits your business needs. Here are some of the questions you can ask before making the purchase:

Are there any special deals on the software? Does the software integrate with other applications like the accounting software? Does the software provide the facility to import and/or export data from the accounting software and excel sheets? Does the software come with an easy to use Graphical User Interface that makes keying in data error free? How easy is it to update the items in the database and post special deals and offers? Can the software work with my current merchant account?  Is the software efficient at generating detailed reports or do they provide only the basic reports? Can you set the time and date for the special deals to begin? For example, can you set the special deals for Thanksgiving in August and trigger the deals to begin a week before Thanksgiving Day? How effective is the POS software in the bars? Can the software integrate with liquor control devices that track the quantity of liquor poured from the bottle each time? These some of the possible questions that has to be asked. There will be many more questions popping up in your head as you prepare a list of questions you might want to ask the dealer before purchasing your software.

You must also ask about the possible compatibility conflicts and the application’s compatibility with your hardware. It is a good idea to go for a software that can run on any system and does not have compatibility problems. This way you can be assured that you can change platforms and/or dealers if a need arises. You can purchase proprietary software, which is programmed to work on a specific hardware and provides thorough compatibility with the same. However, the problem with the proprietary software is that it is less flexible with the upgrades.

You must upgrade your POS system to accommodate your growing business. Upgrading to the latest release of the software will provide you extra features and also provide remedies for the bugs in the software, if any. Whether you pay for the upgrade or not depends on the company providing you with the software. Some of the smaller upgrades might be free and the major upgrade that gives the boost to the efficiency and the feel of the software might be charged.

Apart from the software upgrades, you might also want to upgrade the POS hardware. When you upgrade the POS system hardware, you can add a new terminal or add peripherals for the already existing terminals, etc. Before you go for the upgrade of the hardware make sure that the new add-ons are compatible with your already existing hardware and software.

A basic POS system will have the following components: a cash drawer, receipt printer, keyboard and a monitor. The keyboard is optional in places that use a touch screen as an input device. The other input units can be in the form of a scanner, or any other handheld devices that can input the data into the computer. Outlets that are more sophisticated will have a pole display unit and Magnetic stripe reader to take credit card payments. Businesses that have a constant flow of customers can use omni directional scanners to make the job easier and attend to more customers in a short span of time.

Touch screen monitors are very useful in places like the restaurant and the hospitals. These monitors use lesser electricity than the regular CRT monitors, are long lasting and use less space. Some of them come with an inbuilt magnetic stripe reader. Of course, the touch screen monitors are a little more expensive than the CRT but are worth the money.

Keyboards are useful for places like grocery stores and provisions stores where the keys on the keyboard are programmed for specific items and prices. The keyboards also come with an optional in built magnetic stripe reader.

Each of the above is discussed in detail under the specific headings.

How much should you spend on the POS:

Now that you have a fair idea of what you can expect in your POS, here is a brief about the amount of money you can spend on your POS. As per the Price Water Coopers, a retailer spends around 2% of the revenues on getting the business computerized.

Based on the above 2%, let us assume that your business has a turnover of $1,000,000. Two percent of the turnover is $20,000 per year. So, you will spend $20,000 on the computerization. If you are thinking that is too much of an investment, here is a titbit for you: the return on your investment i.e., the profits must be at least 5 times your investment. Based on this, your business must generate an extra profit of $100,000 per year for your investment to be beneficial.

Guarantee and Support for your POS:

Before you purchase the POS system, make sure that you have thoroughly understood the terms and conditions for the guarantee to be valid.

However much tempting it is, to assemble the POS on your own, DO NOT assemble it on your own. Usually, this is one of the conditions for the guarantee to be valid. The guarantee ceases the moment you try to assemble the unit. For the guarantee to be valid, a qualified and certified person must assemble the POS from the company or the dealer.

The software might have special configurations and issues that can be easily handled by trained personnel. Also, in the initial weeks, the software might throw exceptions and unforeseen errors and you are safe if the installation has been handled by the certified personnel.

You must make sure that you will receive support from the installation person whenever your POS system encounters problems or answer your questions to get you through the initial period of being accustomed to the system.

Your business will encounter a major letdown if your POS system goes down. You will have to deal with irate customers and incur heavy losses. Even though most of the dealers provide support to deal with unexpected shutdowns, it might be a while before the POS system is up and running again. Most of the dealers will have the option of replacing the system till your POS unit has been repaired. Ask about the replacement policies, the response time in case of emergencies and online/phone support. You will come across varied plans for the support and guarantee. Choose the one that fits your requirements.

Most of the companies/dealers provide 24×7 phone support. However, some of them have the support only during working hours. The phone support is intended to solve minor glitches in the system and cannot help you if you are facing a major breakdown in the system. You might get the phone support free for first year of purchasing the POS system. Thereafter, you will charged on the basis of per-incident.

Some companies also have remote assistance wherein they log on to your system remotely and try to troubleshoot. If nothing works, they will send support people to your site to rectify the problem.

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