6 Reasons Why All Small Businesses Should Use Point of Sale Software

August 13, 2012 7:56 am11 comments

If you’re running a bricks and mortar store, selling more items a day than you can mentally keep a handle on, and you’re not using a point of sale system, then I beg the question, why? You may think you don’t need it and are managing fine without it, but you could be even better with a great POS system in place. You might be surprised just how much it can help your bottom line. Take a look at these 6 good reasons to consider implementing point of sale software.

6 Reasons Why All Small Businesses Should Use Point of Sale Software

Eliminate Human Error

If you are manually adding up orders or calculating stock takes, you are leaving yourself open to human error. Sure, an error here or there isn’t going to break the bank but as little as 1% margin of error could lose you thousands over a year (for example, if you are taking on average £1,000 ($1569.60 U.S) a day, 6 days a week, there’s 52 weeks in a year then if you have just a 1% error you are losing out on, or not accounting for, £3,120 a year ($4897.15 U.S.)). Whereas, whilst a POS system might cost you a bit each month, it will help your bottom line figures and you’ll more than likely see a return within months.

Reduce Your Losses

It’s sad to say but quite often a business’s losses are due to theft from their own employees. Since these people know how the company’s processes work, they are able to exploit the flaws to cover up their theft. A POS system can track and evaluate every step in a product’s lifecycle from purchase from a supplier to the sale to a customer. You can use this data to understand a) where your losses are occurring, and b) where the flaws in your processes actually are, and act accordingly. Plugging these holes will help you to tackle loss from external shoplifters as well, so your saving could be twofold.

Increase Efficiency

If your stocktake (inventory) always tallies (balances) with what you’ve sold, then you can move onto the next point. If you have discrepancies however, you may want to read on! Any POS system worth its salt will automatically enter sale information straight into your inventory so you no longer need to double-check for inconsistencies between the sales you made and what you have in stock. If you can integrate with your accounting software as well, then you will gain back even more time. This gives you and your staff more time to be able to concentrate on generating extra revenue by tending to customers.

Know Your ROI (Return on Investment)

Do you know what your best-selling product line is? Or which of your stores is most successful and why? Perhaps you have a particularly good sales person without whom you wouldn’t be selling so much? Sales reports generated by a POS system let you analyze the effectiveness of any campaigns you are running. This lets you find the products with the best margins, who’s the best sales person on your team, the top pricing structures or deals that convince customers to buy, and what marketing activities are the most successful for your business. You can then optimize your sales processes, ordering and marketing to improve your profit margins.

Optimize Your Checkout Process

Significantly speed up your checkout process with bar code scanning. Your customers will be much more satisfied if they don’t have to wait about queuing (wait in line) in order to make a purchase, and you will be able to serve many more customers each day. Plus, you will be able to record more data at your checkout that could be used to incentivize loyalty in your clientele and help you better market to them.

Keep Your Prices Accurate and Consistent

When you make a price change you only need to do it in one place and it will update across multiple locations and within your inventory management software. With your whole business up to date, anyone who sells an item will have visibility of the correct price or deal. This means your prices are always consistent, so your customers will never feel cheated if they notice a cheaper price in a different location, or even receive a different price from another salesperson in the store. If you integrate your POS system with your other sales channels, like your online store, you can automatically update these at the same time. Of course, not all POS systems will let you do this easily, but it is worth bearing in mind when you’re picking one out.

If you’re still running your small business with a pen and paper, calculator or simple spreadsheet software, it might be time to consider a proper point of sale system. When making your choice of POS, remember to think about the long-term and opt for a system that will let you scale and grow.

Written by Penelope Edwards

Penelope Edwards works for Brightpearl, who provide business management software for independent retailers and wholesalers that is designed specifically to save time, increase sales and make customers happier. Their multichannel retail system lets you integrate your inventory, accounts, CRM, order management and more with your online web store, POS software and online marketplace listings.

You can find Penelope and Brightpearl on Twitter, LinkedIn and Facebook.


@LettuceApps Anytime, I'll send you the link later today.


 @pennyedwards Yes I agree. As I mentioned a POS needs to be easily customizable for business processes. For me good design is not about beauty (though why not make it beautiful while you're at it) it's about fitting a human purpose, or an organization's purpose. What's completely stupid to me is technology solutions that fail to improve on an established metaphor or structure. For example restaurant POSes where the kitchen gets printed out chits to place on a thumbtack board just like putting old handwritten tickets received from servers. Stupid, inefficient and not serving the customers any better. 


Existing POSes I''ve had the misfortune of trying out seem to have spent very little time really thinking about forms design or how to effectively convey information published on a screen in an effective way that's easy to understand. 


I am hopeful about this Lettuce product from lettuceapps.com. Not strictly a POS, but tackles some of the same use cases.


I agree with all six reasons, and believe small businesses deserve a better POS. I'll use one use case as an example, restaurants. For a typical restaurant implementing a sophisticated POS, it may represent a restaurant's largest outlay for equipment. 


Now if the POS was easy to train employees to use, saved managers time in accounting functions like scheduling, payroll, and costing of goods sold, it might be worth it. Anybody who's tried a stint at serving at a restaurant that uses a POS while writing the great American novel or trying to make it at Second City as the next coming of James Belushi can tell you how much of a struggle it is to learn a POS.


With what we understand about UX and design as applied to computing systems, there should be a product available that's as intuitive as an iPhone where a toddler can have a satisfactory experience right after picking up the device, and that is easily customized for the business processes. And it shouldn't be the largest investment in equipment a restaurant must make. 


The reason that Square has taken off for small businesses is that it makes everything easier for a merchant, and it employs the intuitive interfaces provided by a smartphone. I haven't kicked around register, hopefully it'll help many merchants. The limits of Square and I suspect register will be customization for specific business processes. I look forward to seeing improvements though.


Retail experience still has a long way to go. I know Apple gets a lot of credit for changing the retail experience, but there's still too many dissatisfied shoppers out there. I'm surprised there's not more attention to improving retail experiences, it is one of the largest components of the world's economy.


PhilipNowak moderator

 @ulysseas  Funny you should mention @lettuceapps . We were just doing research on them a few days ago and plan to cover them here on Firmology.

PhilipNowak moderator

 @ulysseas Don, thanks for the comments. I agree with you about creating a simple and intuitive user interface. I think all tech products should follow these guidelines. It will be interesting to see how Square improves its point of sale product after signing its massive agreement with Starbucks.


 @ulysseas Absolutely agree that having an easy-to-use interface is essential for a POS system. It should be intuitive for staff members and make there lives easier rather than more difficult. You don't want to spend hours training new employees either. However, it is important too to get the balance right between functionality and design. It's all well and good have a beautiful, simple interface but if it doesn't actually speed up processes or allow staff to complete the tasks they need to then there's really no point in implementing a system anyway. 


@PhilipNowak Square's done a lot for small businesses. I think to really break out retail we need to stop thinking of analogs of existing structures and really shake things up like when Woolworths put merchandise in the aisles. In my estimation the last big innovation in retail as far as experience. Online is great, but we still have to eat and sh%t brick and mortar. It's a huge market to tap.

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