Advantages of Using a POS System for Small Business

One of the most basic needs of any business is the ability to accurately track sales and other vital transactions. While many small or new businesses typically keep track of sales manually with a written ledger or utilize spreadsheet software like Excel, POS (Point Of Sale) systems provide automatic record keeping solutions along with many other advantages that can help small businesses succeed in a competitive economy. A POS system typically consists of software installed on a cash register terminal that communicates with another standard computer that stores transaction data and other vital information that is vital to maintaining a business’s bottom line.

The POS market is very strong and increasingly profitable with an estimated market value of nearly $15 trillion, up from less than $10 trillion only two years ago. Furthermore, the market is projected to grow another $5 trillion by the year 2020. The largest demographic of the POS market has consistently been the retail industry, with food service also having a sizeable presence.

Advantages of POS System

A POS system allows a business to effectively track sales, analyze profits/expenses in detail, maintain inventory, analyze sale trends, as well as allow you to manage employees and other store operations. In essence, the POS software combines managerial duties, bookkeeping, and transaction management into a small automated system that costs far less to utilize as opposed to hiring employees to handle these duties. 

POS Software

In addition to the hardware, the system operates on, POS units include proprietary software that collects and analyzes detailed information about purchases and other transactions. This data typically 

  • Item Information
  • Costs/Expenses
  • Payment Methods
  • Stock/Inventory
  • Purchase/Transaction Records
  • Employee Time Clocking
  • Tax/Discount Calculation

POS management software can assist a store manager by constantly collecting analytic data to produce detailed spreadsheet reports, eliminating the need for manually inputting formulae and data into a spreadsheet program. This helps business owners and managers to determine the best way to maximize sales, determine what inventory restocked, easily and accurately do taxes, and other vital operations. Some POS systems even save information that shoppers submit (such as email addresses), or that it gains from credit card users. This information can then be used to send customers special deals, or alert them of upcoming events or sales.

There are several different kinds of POS software that determine how and where the databases can be accessed by a user. An older POS system typically keeps all data on a server in your store, which means the user needs to export it manually from the source. A significant advantage to this is that a business will not have to worry about internet outages freezing their business and adversely affecting their profits for that day.

The newer and more popular alternative is a web-based POS. Though they are more expensive and have a degree of complexity to them (some believe that it is not as secure as traditional POS methods), they provide huge advantages in contrast to these issues. Web-based POS systems often feature very focused and on-demand customer support than traditional POS software, with more frequent updates and an easier method of delivering them. There is also the huge benefit of being able to access business analytics and statistics from the POS software remotely without having to manually export files from a store terminal. Also, because the files are hosted online remotely, any damage or interruptions to the server or other hardware will not destroy or corrupt data. These systems also allow the use of POS on mobile devices as well, which allows employees to engage customers directly and eliminating the need to bring them to a register to complete a sale.

POS Hardware

The immediate benefit of a POS system is the hardware itself. POS software is often installed on a cash register unit, typically paired with a receipt printer and card scanner. Some models either come with barcode scanners or can be used with other common models of scanners. All of these tools add security, convenience, and professionalism to a business.

Another one of the benefits of POS systems is that POS software is accessible on a number of different platforms. Instead of limiting your transactions and operations to a terminal that is in the store, you can also utilize the POS concurrently with a remote cash register in another location, a computer, a tablet or even a smartphone can all access and work with the software. In some instances, this may allow further savings on hardware, as pre-owned or second-hand hardware will likely be compatible with new POS software solutions. Furthermore, a multi-use tablet with a removable external card-reader is an ideal substitute for an expensive card reader unit from a POS developer, which will only serve one basic purpose. Now that many models of smartphones can also read QR codes, mobile POS solutions can already take the place of a number of larger and more expensive pieces of hardware that are often more difficult to use.

For those pieces that can’t be replaced with smartphones and tablets, or for larger businesses that do not want to use a personal mobile device for business purposes, POS hardware has a very large price range depending on the complexity and quality of the hardware and whether or not it comes with POS software. 

Many new and small businesses will have no need for high-end solutions, while an established local business may want something more intricate than the most basic models, even if it means paying more. Similarly, the associated software comes in a varied price range, including some options for free (though sometimes limited) POS software solutions for small business solutions.


Studies show that Web-based POS is becoming more popular, as the increased efficiency and availability of mobile devices make the need for mobile access more crucial, and allow personal devices like smartphones and tablets to double as financial hardware. Mobile devices are still ways away from replacing most POS components, however, but the rapidly growing and vast market that provides these units is only expected to expand.

eHopper is a software company focused on helping small businesses gain more customers and streamline their internal operations. They are a software developer that offers management solutions to small business worldwide, enabling small business owners across many industries to efficiently manage their business and continue to grow.