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Why is the Point of Sale (POS) System Important?

Why is the Point of Sale (POS) System Important?

Why is the inventory shrinking suddenly? What is the fastest-moving product? When to reorder stock? You will get the answers to all these questions when you implement the Point of Sale (POS) System in your retail outlet. In the following Buzzle article, find out more about the importance of having a Point of Sale System in your shop.
Meghna Wani
Cloud-based POS Systems!
Cloud-based POS Systems are the latest systems that can run on an iPad, a tablet, or any other mobile device. It can help you keep a track of the cash flow in your business, and is cheaper as compared to a traditional POS system.

These days, Point of Sale (POS) Systems come with a hoard of added bells and whistles, and are clearly more efficient than cash registers. Barcode scanning and the display pole makes transaction-recording much easier. These systems not only give an accurate and more detailed report of daily transactions, but also track inventory in a better way. They show the trend of sales, based on which the business needs could be forecast.

If you are still not sure about installing a POS system, read the following points that elaborate how the system will efficiently handle all the snafus from day one of your business.

The POS system ...

Tracks Each and Every Transaction

Not sure why the inventory is shrinking suddenly? Well ... there can be various reasons. Theft, unrecorded sales, and under or overpricing are the primary reasons for a sudden decrease in inventory. The POS system has a barcode scanner, that means each and every transaction is captured immediately, and every item is sold at the correct price. Nothing goes undetected. The sum total of the bill is also calculated correctly to the last penny.

As soon as the sale is done, that item gets marked out of the inventory. As a result, not only is the sales tracking done accurately, but also precise inventory control is carried out simultaneously. This solves the ever-existing problem of inventory not matching with the tallies. Veteran retailers often experience frustration when the books never seem to match with the actual stock. A POS system can track all the loopholes, and pinpoint the cause behind the numbers not matching.

Tracks the Mark-downs Correctly

Mark-downs are usually done when the business wants to attract and retain customers. Any change in pricing through discounts, special offers, promotions, coupons, or any other means would require a POS system to track them down. These markdowns are also done when businesses want to clear out stock before it becomes obsolete, or to replace it with new stock.

Markdown management requires proper information of all the base elements such as inventory level, average sales volume, price elasticity, salvage value, and the time frame by which the products needs to be sold. All these figures are sought by the POS system, and the exact markdown price for each product that needs to be moved out of the inventory quickly is calculated. If not for the POS system, businesses would have to struggle with cash-registers to get the numbers in place.

Automates All Functions

All functions that are required to be carried out daily by the POS system will be carried out automatically. The absence of an employee will not reduce it's efficiency. Therefore, it doesn't matter where the boss is, or if the POS system operator is down with flu. As long as the replacing operator knows how to use the system, things will run smoothly. Let's assume the same scenario without a POS system. If the bookkeeping executive is on leave, and there is no-one to replace him, things would be difficult for any person who doesn't have enough knowledge in that field. He/she may goof up with the numbers and complicate the inventory control. In simple terms, this system overcomes the factor of human error.

Keeps the Prices Consistent

In a multi-product store that has many employees, it is quite possible that without a proper tracking system in place, the product could be sold at a price higher or lower than the maximum retail price. There is usually nobody to track what other employees are doing. This can be quite discouraging from the customer's point of view, as he/she might wonder why the specific product has different prices every time, and would eventually stop buying from that store.

The same is the case with stores that are operating as a chain at more than one location. If the prices vary according to the location of the stores, it may result in customer dissatisfaction. The answer to both the above mishaps is installing a proper POS system. It will allow the products only to be sold at the maximum retail price and not more or less, no matter who the operator is or what the location is.

Improves Customer Satisfaction

First of all, a POS system ensures faster checkout. Since the barcode scanner reads the barcode to make an entry of a product into the system, it takes very little time to complete the purchase and move out. Second, correct pricing, accurate sum total, correct amount of money returned, and the rewards for their patronage, encourage the customers to revisit. Third, since the employees are not kept busy with inventory control or bookkeeping, they have time on their hands to cater towards the most useful resource of the business: it's customers.

A few other benefits of switching over to a POS system are:

» It can record information like birthdays, anniversaries or any other significant milestones, so that timely mails can be sent to congratulate or wish customers. This step improves the relationship with customers.

» If there is any discrepancy in the bill or the products sold, the customer can visit the store without the paperwork. The system can easily pull up any information, since all the information is saved.

» Attached magnetic scanners makes the 'payment by card' process easier.

» Logo of the businesses can be printed on the bill, which helps in improving the image of the business.

» 'Low stock' reports and 'purchase orders' are generated automatically with enough lead time to receive the orders in time.

» If a business has a Point of Sale as well as order processing (snail-mail order or wholesale order) methods, both can be integrated with one POS system in place.

» Greater control on integrity can be practiced because every employee can only have access his/her password-protected account. Also, employees do not have access to the server, which implies that they can only enter data, but cannot edit.

Therefore, it can be concluded that the POS system gives the owner as well as the employees much-deserved peace of mind, by saving them time and unnecessary labor. In turn, what the owner gets is an error-free record of all of his/her money. After all, this is what every businessman/woman wants... right?