Point-of-sale (POS) systems have evolved over time from being simple barcode scanners and cash registers to holistic inventory management systems and sales data reporting tools. Today, POS systems provide businesses with greater flexibility, control and intelligence than ever before. They support cashless transactions and provide both stationary and mobile credit card reading hardware. Many platforms offer free or low-cost plans that avail these sophisticated tools to even the smallest of businesses. 

So, whether you’re an entrepreneur looking to upgrade your existing POS system or you’re launching a new business and want to better understand what’s out there, there’s a lot to learn. this guide helps you know modern POS systems and find the system meets your business’s needs.

What is a POS?

In business today, it’s important to understand how POS systems work. The point of sale is the location and instance of a transaction. This doesn’t mean just cash registers; it can also include online carts and checkouts. Payments made using a smartphone or tablet equipped with a card reader also qualify, as do transactions made on these devices via QR codes from payment services such as PayPal. The point of sale is also typically where sales tax is calculated and charged.

How POS systems are changing the way businesses operate

To get the most out of any system, it’s important to understand how POS systems work. POS systems have moved beyond the processing of sales and are becoming an integrated part of the entire business operations ecosystem.

Restaurant cloud-based POS systems allow users to split checks, quickly search menu items, track server performance, process online and table-side orders, report trends of voiding or comping items for guests, track which menu items are selling well, and even train new employees.

Here are five ways POS systems are changing and how your business can jump on the cutting edge of POS technologies. 

1. Shared commerce

A business can grow exponentially by taking its operations online. Previously, businesses had to run data from their e-commerce platforms and their physical POS systems. To run a report, you would have to import both results into a spreadsheet, accounting system or other reporting software. However, because of shared commerce POS systems, businesses can save plenty of time by automating the process.

2. Mobile POS

Businesses should consider accepting mobile payments, as customers are shifting away from cash. Customers are using credit cards and accepting mobile wallets more often than cash as payment. With mobile POS systems, businesses can accept credit card payments from anywhere with an internet connection, and customers have more autonomy over how they pay. These systems are also effective for side hustles, sole proprietorships and very small businesses that often attend trade shows or local events.

Depending on the system, businesses may not need heavy equipment overhauls or complicated staff training to start accepting mobile payments. Mobile credit card processing services (e.g., Square, PayPal Here) use a credit card reader attached to a smartphone or tablet with the necessary mobile app, while mobile wallet providers (e.g., Google Wallet, Visa Checkout, Apple Pay) and loyalty mobile apps (e.g., Starbucks, Daily Deals) allow customers to pay directly from their smartphones or by using a POS scanner to read barcodes or QR codes on their screens.

3. POS + CRM

New POS systems integrate real-time transactions with the best CRM solutions to help businesses drive sales and boost revenue. This combined functionality is critical for new businesses that need to generate leads and drive sales to get off the ground, as well as small businesses that need to bolster their cash flow.

Whereas previous POS systems could provide only basic data regarding customer behavior (if they provided anything), POS-CRM integration makes it possible to see which customers are driving your sales and whose loyalty is worth pursuing.

Online customer relationship management (CRM) and invoicing software Sellsy is one such solution. With its POS integration, businesses can create client records, CRM tasks and email marketing lists straight from their POS tills.

4. Big data for small businesses

Big data solutions aren’t just for big companies with extensive intelligence budgets. . Even the smallest, non-technical businesses now have affordable access to powerful data right at their fingertips, thanks to their POS systems.

5. IoT and POS security

The internet of things (IoT) — the interconnectivity and communication of devices, networks and physical objects over the internet — makes it possible to connect POS systems to front- and back-end processes such as CRM, accounting and inventory management. As such, POS systems are vulnerable to hacks and data breaches.

Cybercriminals sometimes target POS systems to collect consumer and credit card data by distributing malware through internet-connected devices. Therefore, businesses must stay up to date on their security systems and understand how to combat potential threats or attacks.

The Department of Homeland Security’s United States Computer Emergency Readiness Team (US-CERT) recommends protecting POS systems by using strong passwords, ensuring you have the latest POS software updates, installing a firewall, using antivirus programs, restricting unauthorized internet access (such as for purposes other than POS transactions) and disabling remote access to POS systems. Furthermore, your POS system provider should have the proper security and compliance in place as part of your service-level agreement.