
Financial Technology
Introduction To POS Software
By TechDogs Editorial Team

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Overview
So, what replaces the complicated and aging financial systems of yore? A leaner and cleaner software that can operate on computer, mobile, tablet, iPad, etc. We’re talking about Point-of-Sale Software. Read on to know more about it!
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Q: What happens when a customer buys something at a store, on a website or through an app?
A: A customer is purchasing something new and shiny, the business is making a sale, both are happy, win-win for all.
If you are wondering why we asked such a silly question, let us shed some light on it. The exact stage or moment that the customer executes a payment is the “Point-of-Sale.” It can be the stage when you are in front of the billing counter in a physical store or the moment when you click “place order” or “pay now” in an online sale. The earliest Point-of-Sale system was the good old cash register. The person operating it would manually enter the product's price, calculate the tax and rattle off the final price. The money would exchange hands and customers would get the receipt. The receipts would be tallied and sent to the inventory department to make the necessary entries. Phew! That was a lot of work.
Today, we no longer see the old humungous registers; instead, we have the chic and sleek computerized tills that require zero to minimum manual effort. A Point-of-Sale system or simply POS is a constellation of hardware and software that processes payments, updates inventory and integrates various payment methods through a unified platform in real-time. Don’t we love everything instant these days!
This article focuses on the backbone of modern shopping experiences; the POS Software, its components, how it has revolutionized the retail and Ecommerce world and what its future looks like.
What Is A Point-Of-Sale (POS) Software?
Before we explain it in detail, a typical Point-of-Sale unit looks like the image above. A pretty common sight, right? While online stores and Ecommerce businesses will have a virtual checkout point, both systems are fueled by Point-of-Sale Software. The software gathers data about your products, applies the relevant discounts, calculates taxes and helps manage the entire transaction end-to-end. Typically, POS Software will focus on payment processing, inventory management, performance reports, customer relationship management and more. We know you are drooling already! Let's uncover all about the POS Software, shall we?
POS Software: How It All Started
To understand POS Software's evolution, we need to know about the earlier inventions that culminated into the modern-day tool. James Ritty, an enterprising individual and a successful dealer of pure whiskies, fine wines and cigars, invented the cash register way back in the 1800s. In other words, Ritty and his employees dealt with all things that spelled luxury and as we all know, power corrupts! Soon, Ritty realized that his employees were siphoning money from him. So, he went one step further (no, he did not drown his sorrows in his massive liquor collection). He invented the cash register in 1879 (ting!) and aptly named it the "Incorruptible Cashier.”
This device was patented and sold to Jacob Eckert, founder of National Manufacturing Company (NMC). Later NMC was bought by John Patterson, who renamed the company National Cash Register (NCR), which is still very much in existence. Patterson tweaked the machine to add employee drawers and bells and paper receipts. Cometh the 1900s and Charles Fettering developed the first cash register powered by the electric motor. NCR benefitted a lot from this invention and the cash registers sold like hotcakes. The game changed in the 1970s, though, when cash registers were teamed up with computers. In 1974, McDonald's used one of the first microprocessor-controlled cash register systems built by William Brobeck and Associates. In 1986, the first graphical Point-of-Sale Software featuring a touchscreen interface was introduced by Gene Mosher.
Post the 1990s, POS Software was customized depending on the industry and included a wide range of capabilities with an increase in its adoption. Post-2000s, the POS Software market took off with cloud-based systems making their entry into the fray. So much so, that as per Grandview Research, the global POS Software market size was valued at USD 8.2 billion in 2019 and is estimated to expand by roughly 10% by 2027. Before you Google the best POS Software out there, you should be aware of how it all works.
How Does The POS Software Work?
A typical POS system works like this:

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Customer loves your product/ service and decides to buy (Sales and Marketing guys are dancing)
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The POS system crunches the numbers and displays the final price (Finance folks are patting themselves on the back, the pricing strategy is working!)
- Customer completes the payment (“I Feel Good” by James Brown playing in the accounts department)
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The POS Software confirms the transaction and receipt of money, creates an entry in the inventory and generates the latest sales and marketing reports. (High fives all around!)
You can replicate the exact process for online purchases as well. Hassle-free and smooth, right? It is also immensely instrumental in businesses scaling new heights and that's what we have covered next.
How Is POS Software Beneficial To Businesses?
Ever wondered why McDonald's is one of the fastest service restaurants out there? Limited menu, super-efficient staff, streamlined processes? True but we think that the POS Software contributes the most. McDonald's has drive-throughs, takeaways and dine-in services and no matter how busy the outlet is, the service time is never more than 10 minutes. That is super-fast! The POS Software is behind this seamless operation; while you place your order and pay, the order is passed to the kitchen and the food is already being prepared. POS Software enables all of this and the result is a super-efficient, customer-friendly system.
Let us break down the benefits for you.
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Boosts Customer Service
When you have automated most of your operations, your staff can pay more attention to customer service. Instead of manually feeding information, the team can inform customers of new offers, applicable discounts and upcoming schemes. Happy Customer = Healthy Revenue
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Simplifies Inventory Management
Keeping tabs on inventory is one of the most challenging aspects of any business. POS Software helps the inventory team take note of the available stock and replenish it to avoid disappointing customers.
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Improves Financial Reporting
Financial acumen is all about managing resources efficiently. POS Software provides in-depth finance reports that help plan for immediate and future projects.
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Streamlines Business Operations
As businesses spend less time on admin stuff, owners will get more time to work on the growth of the business. When processes are set and automated, it is just about channeling your energy into more productive things.
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Increased Efficiency
Processes set + automation implemented = efficiency increased. Your staff are not bogged down by mundane manual work and can focus completely on the job at hand.
While the benefits are intangible and immeasurable in some cases, the results are there for all to see. So, surely you wish to invest in POS Software now – but hold on, here are the top things you should look for before paying up for one.
What To Look For Before Finalizing A POS Software?
Now that you know how POS Software will boost your business, it's time to create the ideal POS Software must-have checklist. However, one piece of advice that we give (for free, of course!), the best POS Software will depend on your industry, business model etc. We've listed a few general characteristics that apply to almost all types of businesses -
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Integration Capabilities
POS Software must have robust integration capabilities with other modules. Examples include accounting, time, attendance, inventory, sales and marketing CRMs. This avoids loss of data or errors when the data is transferred manually from one system to another.
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Employee Management
Yes, please! Most POS Software will allow for employee timesheets and logs for better employee management.
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POS Reporting
Critical for sales and marketing folks to derive which products are loved by customers, what schemes work and how much revenue you make on each product.
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Customer Management
POS Software maintains profiles on customers, which helps sales and marketing teams conduct persona-based marketing strategies and maximize revenues.
Up next, what's next for POS Software?
The Future Of POS Software
Digital transformation and new-age technologies have rendered cash and cash registers a thing of the past. Customers prefer browsing, shopping, paying - right from the convenience of their smartphones or mobile devices. In fact, 73% of shoppers prefer going cashless and that is a significant number.
Hence, POS Software will enable more businesses to boost their sales by providing a seamless online shopping experience. POS Software will, in the future, empower the autonomous store system, where there are no lines and no checkout. Customers can walk in, take what they want and pay through their smartphones. With full integration capabilities, the future POS Software will be a force to reckon with and empower business owners to have complete control over the minutest of their business operations without a fuss.
Conclusion
While the good old cash register may have been handy for businesses (James Ritty agrees!), upgrading to POS Software has become imperative over the years, especially now when we are fast evolving into a cashless society. Investing in good POS Software will empower your business with intelligent and efficient operation, as well as an improved customer experience.
Frequently Asked Questions
What is Point-of-Sale (POS) Software?
Point-of-Sale (POS) Software is a crucial component of modern retail and Ecommerce operations. At its core, it's a system designed to streamline transactions, manage inventory, and enhance overall business efficiency. Whether in a physical store or online, POS Software facilitates the processing of payments, applies discounts, calculates taxes, and generates detailed transaction records. By integrating various functions into a unified platform, POS Software simplifies the sales process, allowing businesses to focus on delivering exceptional customer experiences.
How does POS Software benefit businesses?
POS Software offers numerous benefits to businesses across various industries. One of its primary advantages is boosting customer service by automating routine tasks, allowing staff to focus more on engaging with customers and providing personalized assistance. Additionally, POS Software simplifies inventory management by providing real-time visibility into stock levels and streamlining reordering processes. Moreover, it enhances financial reporting by generating detailed finance reports, helping businesses make informed decisions about resource allocation. Overall, POS Software improves operational efficiency, empowers employees, and enhances the overall customer experience.
What should businesses look for before choosing a POS Software?
Before finalizing a POS Software solution, businesses should consider several key factors. Integration capabilities are crucial, as the software should seamlessly integrate with other business modules such as accounting, inventory management, and customer relationship management (CRM) systems. Employee management features, including timesheets and logs, are also essential for efficient workforce management. Furthermore, robust POS reporting capabilities are critical for sales and marketing teams to derive actionable insights from transaction data. Lastly, comprehensive customer management features, such as maintaining customer profiles, enable businesses to implement targeted marketing strategies and enhance customer relationships.
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