Years ago, point-of-sale (POS) systems were reserved for large enterprises with big budgets. Thanks to the rise of SaaS platforms, that’s no longer the case. Today, a small business is barely complete without a POS system.
If you feel left out, the good news is that there’s a POS system out there ideal for your business. Whether you run a brick and mortar retail business or a multi-location restaurant, you can always find an option for every price point.
But if you’re new to point-of-sale systems, you might not know what exactly you’re looking for. There are numerous, of POS systems in the market, each with features setting it apart from the others. Finding one for your business can be overwhelming.
Fortunately, this guide covers everything you need to know when selecting the best POS system for your small business.
TL;DR
- Understanding your business needs and goals is the first step to identifying what POS features suit your business.
- User-friendliness is one of the most overlooked features of POS systems, but a crucial factor whether your team is tech-savvy or not.
- Think about the future. Find a scalable and flexible POS system to accommodate your growing business needs.
Understanding Your Business Needs
While you want to find the best POS system for a small business, you also want to find one that suits your specific business needs. You must first define your business’s unique needs and goals.
Once you have your business needs laid out, it’s easier to identify must-have features in your POS system.
Keep in mind that business needs can vary from industry to industry. For example, a startup in the restaurant or hospitality industry will have different business needs from another in the retail sector.
If your business is in retail, you need a POS system that allows you to track your inventory and know how much of a specific product you have left.
That said, here are some questions to ask yourself to determine your business needs:
- What do you sell? – Your POS system needs to support the products and services you sell. Your system must help you enter different variables and features so you can track your sales and inventory. For example, if you own a clothing retail store, your POS system should help you enter the inventory’s different sizes and colors.
- What do you struggle with? – Your POS system should help you streamline specific issues you struggle with. Perhaps you want one to help you track your inventory or streamline your accounting processes. Or maybe you want one with customer management features to help you with personalized marketing strategies.
- How many stores do you have? – A business with multiple store locations needs a POS system that supports multi-store management and comes with one centralized interface to help with reporting.
- Do you have a team and how tech-savvy are they? – You’re the business owner, but you have staff who might be using the system more than you. Think of your team, iron out their roles, and get a system that will help them carry out their responsibilities. If your team is less tech-savvy, get a POS system with an intuitive interface and easy training.
Key Features to Look For
| Feature | Description |
| Inventory Management | Helps reduce losses and running costs by tracking stock levels across multiple locations in real time. Automates stock audits, forecasts low-stock items, and deducts sold items from inventory. |
| Sales Reporting and Analytics | Provides comprehensive insights for better business decisions. Includes data on sales trends, most popular products, busiest times of the day, and best-performing employees. |
| Customer Relationship Management (CRM) | Saves customer contact details, preferences, and purchase history. Allows for personalized customer experiences and targeted promotions based on purchase behavior. |
| Employee Management | Monitors and manages worker productivity. Includes features like employee sales information, built-in time clocks, and security management tools. Allows setting employee permissions based on store, roles, or individual. |
| Payment Processing Capabilities | Facilitates the acceptance and processing of various payment options, such as credit and debit cards, ACH payments, mobile payments, and cash. |
The next step is to consider what features and functionalities will help you meet the business needs you’ve identified. POS systems today have capabilities exceeding transaction processing.
Every POS software provider will boast diverse offerings. However, it’s important to prioritize features that serve your business the most.
That said, here are some features to look for in a POS system for small businesses:
- Inventory management – A good inventory management system helps your business reduce losses and running costs. The POS system should track stock levels across multiple locations in real time. It should help your business save time by automating stock audits, forecasting products running low in your inventory, and deducting sold items from your inventory.
- Sales reporting and analytics – A POS system that offers comprehensive sales reporting and analytics gives you insights to help you make better business decisions. It should give you valuable insights like sales trends, most popular products, busiest times of the day, and best-performing employees.
- Customer relationship management (CRM) – Most POS systems today have built-in CRM features. The CRM features help you save customer contact details, preferences, and purchase history. Your business can then use these insights to offer customers a personalized experience. For example, if a customer named Joe regularly ships a certain product to Florida from your eCommerce business, your POS system with CRM capabilities can help you notify Joe about special offers on that product or free shipping to his location.
- Employee management – Your POS system can also have employee management features to help you monitor and manage worker productivity. These features can include employee sales information, built-in time clocks, and security management tools. Other POS systems may also allow you to set employee permissions based on store, roles, or individual.
- Payment processing capabilities – Payment processing is a crucial business process that a POS system should have. This feature allows you to accept and process different payment options from your customers, such as credit and debit cards, ACH payments, mobile payments, and cash.
Ease of Use
Beyond the complex and technical features of POS systems lies an often-overlooked aspect— user-friendliness. If you buy the costliest POS system in the market with the most dynamic features, but your team finds it hard to adopt, it won’t be worth the investment.
User-friendliness should be a priority whether your staff are tech-savvy or not. Don’t just consider features and capabilities. Seek to understand usability and user experience as well.
An intuitive POS system with user-friendly features has numerous benefits for a small business. It increases employee productivity, reduces time spent learning how to use the system, and enhances customer experience since they enjoy efficient services.
An intuitive POS system doesn’t require you to make numerous clicks or switch through multiple tabs to take a customer’s order. You should be able to set it up, onboard, and train your employees in a matter of minutes, not hours.
While you can ask the sales rep about the system’s usability, the best person to evaluate it thoroughly based on your business’s specific needs is you.
You can take advantage of trial periods and online demos to get a personal experience with the tool’s ease of use for both you and your team.
Integration with Other Systems
Integration allows businesses to use a variety of tools simultaneously by letting them collaborate to improve and support more efficient business operations.
Instead of splitting your time and attention among multiple applications, you can sync them and adopt new functions, such as recording customer details, credit card payment processing, and real-time inventory reconciliation.
Systems that your POS system can integrate with include:
- Accounting software – Many POS systems today come with basic bookkeeping features. Your POS tool might give you access to accounting data such as Economic Order Quantity (EOQ), sales, labor and payroll information, Profit and Loss (P&L) statements, and daily reconciliations. POS accounting integration takes accounting a notch higher, helping you sync information such as taxes, advanced profitability reports, gift card sales, and cash drawer activity. Integrating your POS system with third-party accounting software, such as QuickBooks, simplifies tax reporting and gives you better insights into your business cash flow.
- eCommerce platforms – eCommerce integration helps you connect your physical store with your online shop. Business owners with multichannel operations know it’s important to have one integrated system to manage orders, monitor sales, and track inventory. POS systems integrate with eCommerce platforms, such as Shopify, to help you sync offline and online sales, inventory, customers, and payments.
- Marketing tools – Marketing systems can use the data from the POS system to nurture customer relationships, build loyalty programs, segment your customers based on purchase history, and send targeted promotional campaigns. For example, a retail store could send personalized Black Friday offers based on products a customer regularly buys.
- Inventory management – Inventory management integration helps achieve real-time inventory monitoring, automatic restocking, and better stock control to avoid understocking and overstocking. This is especially important if your business has stock coming in from multiple channels, such as Walmart, Amazon, and your online store. Some features to look for in the POS system and inventory management integration include shipping label creation, online order management, and in-store pickup and curbside order tracking.
- Payment processing – Payment processing integration with your POS system is important since customers are increasingly using contactless payments. Your POS system can either offer built-in payment processing or allow integration with third-party payment processing systems. For example, you can integrate your POS system with a payment processor like Stax Payments and enjoy fair payment processing rates, third-party app integration, and comprehensive reporting.
Scalability and Flexibility
If your business is still new, you might not need a POS system with all the available features. But you need to think about the future. As your business expands, you’ll need a system that can accommodate your growing needs.
Investing in a scalable and flexible system helps you avoid interrupting your business operations to move your data into a new platform when your business scales.
One factor to consider when looking for a scalable POS system is the customization capabilities. Customization features make sure you can use the tool in every situation.
In other words, ensure that you can adjust the POS system to meet your demands at specific times. For example, Clover allows you to customize receipts and add any information you’d like at the bottom of the receipt.
Another feature of scalable POS systems is cloud-based data storage, which allows for real-time inventory updates anywhere, any time. This feature gives you an exact count of how much stock you have at any specific time since it’s updated every time an order is made.
This is an important feature for multi-location support. For example, let’s say you own a bakery business based in Chicago. In 3 years, your business grows and you open new stores in three different cities.
If you’ve invested in cloud-based POS, you can be absent from any of the locations in person and still get real-time and accurate sales and inventory updates. You can even help an employee in a different store in case of any issues as long as you’re both online.
Cost and Budget Considerations
Your budget and the cost of the POS software is one of the biggest factors to consider. You want a POS solution that meets your business needs, but also one that doesn’t eat into your business profits.
Consider how much you’re willing to pay for the software. Also, think of the cost of the POS hardware needed to run the system, such as credit card readers, barcode scanners, receipt printers, cash register drawers, and Android/iPad devices. Don’t forget maintenance fees.
In most cases, what you pay for is what you get. But make no mistake— just because a system is the most expensive in the market doesn’t mean it’s the best. Sometimes, mid-priced options have similar features to or are just as good as premium systems.
For every quality POS system in the market, there’s a mediocre one packaged as one of a kind. The key lies in finding a system that meets your business needs without having to break your budget.
POS systems might have previously not been feasible due to one-time pricing models. This conventional model saw POS systems go for around $2,000 and up to $10,000. Some providers still follow this structure.
However, providers today also follow a Software-as-a-Service (SaaS) model where they charge a monthly fee. This model is more reasonable for small businesses since it’s cheaper.
For example, Shopify POS starts from $0 to $89 per location per month. Businesses that wish to subscribe to the Shopify eCommerce store plan can expect to pay $29 to $299 per month.
Other providers like Square POS have free POS accounts.
Don’t forget to check whether the provider is transparent in their pricing. One of the easiest ways to spot a shady provider is through sketchy pricing. Some providers have other hidden fees.
Some hidden fees include registration fees, per-location fees, payment processing fees, and add-on features fees, among many others.
Security and Compliance
When it comes to POS security, most business owners only think of lockable cash registers. But there’s a much greater risk than theft— data breaches.
POS systems handle a lot of sensitive information. Fraudsters regularly target POS systems to access customer payment information. Systems with low levels of data security are an easy target. And they can be expensive to the business.
According to the IBM data breach report, the average cost of a data breach in 2023 was USD 4.45 million, a 15% increase over the previous 3 years.
Here are some data protection features to look for in a POS system:
- End-to-end encryption (E2EE) – This is a measure to ensure that customer data isn’t visible to hackers. E2EE ensures that sensitive information, like cardholder details and private account numbers (PANs), are concealed and securely transmitted. Check whether your POS system encrypts data as soon as the terminal receives the data.
- Antivirus protection – Antivirus for POS systems helps prevent malware, spam, and email threats. The software scans devices to detect any suspicious files, applications, or user activity that should be blocked or deleted. Prioritize investing in a POS system with antivirus software.
- PCI DSS compliance – The Payment Card Industry Data Security Standard (PCI DSS) is a set of standards and policies that govern the security of credit and debit card transactions. All merchants that accept and process card payments must adhere to these procedures to protect customers from card fraud.
- Updates and support – POS systems require regular software updates and security patches. Ensure the POS vendor provides these updates.
Customer Support and Reliability
No one ever thinks they might need customer support after the purchase, so this factor often takes a backseat. But imagine what will happen if the system crashes on a busy day and you’re unable to get it back on right away.
You’re likely going to need some help in the lifespan of your POS system. As such, you need excellent customer support.
First, a reputable POS provider will be present or involved during the installation and ensure that the system is customized to your specific business needs. They will test your connection speed and try out different setups to help you find the most effective.
Training is another crucial aspect of customer support. You should expect the vendor to be available to train both you and your employees on how to use the system, how to troubleshoot, and how to fix common errors.
As for ongoing support, the vendor should offer 24/7 availability, whether via email, phone, or live chat. The support should be unlimited and free.
You can look for reviews and testimonials to evaluate a vendor’s level of customer support and reliability.
Evaluating Vendor Reputation
It’s not all about finding a system with advanced features. You want to give your money to a reputable vendor.
Here are some questions to ask yourself to help you vet the providers:
- How stable is the company? – Your POS vendor must be financially stable so they can offer you long-term support. You can evaluate the company’s stability by checking Glassdoor reviews, BBB accreditation, and any other signs of company stability. You can also evaluate company stability by looking at how long they’ve been in the market.
- Does the company primarily deal with POS systems? – Companies whose primary business is POS systems tend to have more expertise. They’re likely to be more committed since they don’t focus on anything else.
- Do they have online reviews? – Check credible third-party online review sites to see feedback from the vendor’s customers. Credible sites include Trustpilot, Yelp, TrustRadius, and G2. Also, go through the vendor’s social media pages and read their customers’ comments.
- Can they provide references in your industry? – The best POS vendor should have experience providing services for businesses like yours. They should also provide you with these references so you can reach out and get their first-hand experience.
- Are they a provider or a reseller? – Providers are likely to offer a better overall experience with superior customer support and expertise than resellers.
- Do they have any industry awards and recognitions? – Industry awards and recognitions are a sign that the company is reputable.
Making the Final Decision
At this point, you can create a shortlist of POS systems you can invest in.
Before you create it, know that different types of businesses have different ideal POS systems. A brick-and-mortar clothing store is run differently than an online cafe doing food delivery.
Busy retail stores might need all-in-one retail POS systems, like Lightspeed POS. A mobile POS system is the best choice for food trucks or delivery businesses. Similarly, full-service restaurant POS systems have different features specific to restaurant businesses.
Once you have this laid out, compare the different offerings in the market based on features and pricing. Remember, you don’t want to break the bank for a system that might not match your needs after all.
Seek recommendations by consulting with your peers. If it works for them, it’ll probably work for you too.
Thoroughly evaluate your options. You want to get it right since it’s a long-term business decision.
Conclusion
Choosing a POS system is one of the most important business decisions you’ll make. This guide is a blueprint to help you select the best POS system for your small business.
Don’t be in a rush to select the most popular or most expensive POS system. Take time to understand your business needs, what you struggle with, and what features you need to make your life easier. Prioritize your needs over general features.
If possible, obtain a free trial or demo to get a firsthand experience with the POS system.
Follow these steps to the detail and your decision will set you up for maximum returns and long-term success.
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