As your business grows, one of the best things you can invest in is a high-quality point of sales or POS system. Your POS system will prove to be one of the most instrumental elements of your business, as it essentially interacts with every single item that moves off of your shelves and into customers’ homes.
Although you may be able to manually track and manage your inventory at first, this practice will only prove to get more and more tedious and time-consuming as the years go by. Wouldn’t you rather spend more time focusing on the aspects of your business that you’re truly passionate about? Here, we’ll discuss how implementing a point of sale and inventory system can make that happen.
Definitions
As usual, there are a few terms we should define before we can really begin our discussion on the benefits of a POS system for inventory management.
- POS system: POS stands for Point of Sale. This is where the customer provides payment for a good or service and where sales taxes come into play. This transaction can occur online or in-person.
- POS terminal: This term refers to the hardware system you need to process payments. Elements of your POS terminal may include software that lets you read credit/debit cards or portable devices that allow you to take other forms of mobile payment.
- Perpetual inventory management: This term refers to the practice of adjusting inventory numbers after each individual transaction through your POS inventory system. This is in contrast to periodic inventory management, wherein businesses track inventory numbers at certain times within a period, but not daily or per-transaction.
Why Use a Point of Sale System for Inventory Management?
Your POS system can do much more than simply track your inventory, but this function might be one of the most important for your business. Some of the biggest benefits include:
- Scalability to match business growth
- Security in product tracking
- Easy management of pricing and discounts
When you’re first starting out with your company and you don’t have a ton of products to offer, you might be able to process transactions with a simple cash register and track your inventory manually. However, as your business expands and you start adding more and more offerings, this practice gets trickier and takes longer to complete. In addition, you open yourself up to the risk of human error that could impact your numbers and lead you astray. With a POS inventory system for a small business, you’ll be able to more easily track each product and sale, giving you immediate insight into your numbers no matter how big your business gets.
If you eventually open more than one location, you want to be able to keep track of your items no matter where you are. Using an automated point of sale system for inventory management lets you see how many items are at each location, giving you immediate notice if something’s not right. You’ll never have to worry about employee theft when you’re not around.
Finally, you can easily track and adjust prices with the right POS system. If one location is charging $10 for a product while a second location is charging $12 for that same item, your POS system can help you fix this discrepancy in minutes. By keeping your prices stable, you’ll have a better handle on your sales and can increase customer trust and loyalty. Additionally, if you want to mark down prices or start promotions, you can automatically calculate and enable these special prices with your POS system. You can track coupons, discounts, and promotions to see their impact at the end of each day or whatever time period you choose.
What Industries Can Use POS Systems?
A point of sale inventory management system can prove beneficial in a number of industries, including (but certainly not limited to) retail, restaurants, and salons and spas.
You’re probably most familiar with POS systems within retail settings. From small businesses to big-box retailers, POS systems hold a place in just about every retail operation. Tracking inventory is especially important within these companies to ensure that the bottom line is being met. POS systems here can also link to the business’s accounting program to use the data as efficiently as possible and can track sales, returns, exchanges, and more.
You’ve also seen POS systems at work within the restaurant industry, particularly in fast-food establishments. When you walk up to the counter or drive up to the window and an employee processes your order and payment, they’re using a POS system. Restaurants can also use these systems to call you to your table when there’s a wait. This industry and its use of POS systems are similar to the needs of the hotel and hospitality industry.
Salons and spas are also big users of POS systems, though you may not think about these businesses at first. While they focus more on services most of the time, these operations often do sell products that supplement the services they offer. In addition to tracking the sale of these products, POS systems can help these businesses keep track of appointments, send out reminders, manage employee functions, and more.
What Hardware Do I Need for My POS System?
The hardware you need for your company’s POS system will vary depending on what industry you’re in, but at the very least, you’ll need:
- Terminal for your employees to perform transactions
- Cash drawer
- Barcode scanner
- Credit card reader
- Receipt printer
Your terminal gives you the freedom to customize as you see fit. You might opt for a traditional cash register with a simple display, or you might want to go with a system that functions on a tablet for touchscreen capabilities.
Additionally, you may want a cloud-based POS system that allows you to store information online rather than on a computer’s hard drive. These systems tend to be more inexpensive than traditional POS systems while still maintaining key features like inventory management and price adjustment. They’re also incredibly secure and allow you to access your data from anywhere with an internet connection.
What to Look for in a POS System for Inventory Management
When you’re selecting a POS system for inventory management for your business, start by considering what you already have. If you’ve already got tablets that you’re using within your daily operations, for example, you might search for a POS system software that easily works with your existing hardware. Similarly, look for POS systems that can integrate with your existing software or apps for your accounting or CRM needs. This foresight can help you not only save money but also ensure there’s no lapse in your selling time.
On that same note, think about what your business is missing. If you’re looking to replace a POS system you already have, consider what elements you wish your system provided. If you don’t have a POS system yet, think about what your biggest pain points are. What elements would be the biggest help to your business’s daily operations? Ask your employees for their input as well, since they interact with this technology each and every day!
Of course, you’ll want to consider your budget as well. The more features a POS system offers, the more expensive it will tend to be. As we touched on, you can save money by finding a POS system that can work with your existing hardware. Also consider that prices will rise depending on how many locations you need coverage for, as well as the size of your catalogue and the number of transactions you do each day. Some POS systems will charge a monthly subscription fee, while others will take a percentage of your sales.
Finally, look for a POS system for inventory management that offers scalability. While you don’t want to break the bank, you do want to invest in the future of your business. A smaller-scale POS system may meet your needs at the moment, but if it can’t handle your company as it grows, you may wind up spending even more time and money to upgrade your systems in the future. Consider a POS system that can handle multiple locations and expansive catalogues if these are within your business goals.
Grow Your Business With a POS System from DEAR
Having an easy to use POS system is an incredible asset for your business, which is why we at DEAR have worked endlessly creating our version. Our point of sales system is ideal not only for inventory management, but also for managing transactions, running reports, and quickly issuing refunds or exchanges. You’ll have access to your software both online and offline, giving you the freedom to work from anywhere.
Some of the best features of our POS systems include unlimited registers and outlets, multiple payment methods, user control permissions, and register closure and cash management. We also offer solutions for your business needs within warehouse management, sales, purchasing, B2B portals, and so much more. Contact DEAR Systems today to begin your 14-day free trial!