The point of sale hardware and software are essential tools that every savvy business owner must possess. POS tools, at the bare minimum, are cash registers, a calculator, and a cash drawer, or an iPad that allows customers to purchase goods. Over the years as technology has advanced, POS tools have evolved to the point where the software provides far more sophisticated services.
How sophisticated should your POS hardware and software solution be? It really depends on the size and profitability of your business. Smaller businesses might not be able to afford and might not actually need a sophisticated POS system that is tied together by point of sale software.
There are large collections of small businesses and entrepreneurs that can function just fine with Bronze Age level point of sale technology. Just be aware. Businesses can outgrow their Point of sale business solutions. While a successful business can dodge adopting modern POS software, failing to shift to more high-tech practices when the need arises might handicap a business.
Below are six signs you should upgrade your point of sale processes.
Sales Have Ballooned
While tracking sales by hand might work for tiny businesses, it can be too time-consuming to continue as a business becomes more successful. If you spend ten or more hours every week tracking down receipts and then logging the purchases made into an excel sheet, now might be the time to consider investing in a POS software solution.
You can, with a small investment, spend that time on more productive projects. Not to mention it would eliminate the chance of losing track of a large number of receipts. An accounting nightmare waiting to happen.
You Over or Understock
The ability to stock the proper number of products can be a tricky guessing game. (Especially if the product is a perishable good). If you overstock, you can lose money and waste valuable shelf space. If you understock, you can lose out on potential sales.
POS software can let businesses know in real time how much of an item is on the shelf, notify the business when they should restock, and track (through data science) how well a product has historically sold.
Messy, Unsophisticated Marketing Campaigns
Have your past marketing campaigns been the weak sauce? Not sure how to fix that problem? The right point of sale software can help.
POS software can store basic customer data (names, addresses, and purchase history). The data once stored can be utilized to create more targeted marketing campaigns. Once you know exactly who your key demographic is and what they like that can be utilized to create a successful marketing campaign.
Tracking Employee Hours is a Nightmare
Have you been tracking employee hours by hand? That’s fine when you have a few employees that you trust. It can be a tad more difficult when you suddenly have 10, 20, or 30 employees. (Some of who probably have no problem fudging their hours worked a tad.)
POS software can be utilized to allow employees to log in and out of work. No extra work needed. As an added bonus, the hours each employee worked is updated daily. That can be an extra safeguard against an employee accidentally dipping into overtime.
Can’t Seem to Invest the Time in Creating Regular Financial Reports
Do you spend a long period of time logging the financial data? Do you spend a little time creating and analyzing financial reports? That might be a major red flag that you need to update your processes.
While it’s great you have the data logged, successful business owners regularly analyze their financial reports. Businesses who don’t analyze reports are navigating their business blind. They don’t truly know what’s successful and unsuccessful. They can’t create financial strategies tied to facts. Instead, they rely on hunches and feelings. That’s not a great way to navigate towards business success.
POS software can easily create financial reports for you to analyze. If POS software is the only way you can get your hands on financial reports, it might be worth it.
Every business should have a point of sale tools. How sophisticated the POS software and hardware is, really depends on the state of your business. Businesses who utilize basic POS tools should keep their eye out for signs that they have outgrown their current POS solution. Successful businesses adapt and course correct as they grow.
Originally published on December 8, 2016. Updated on March 11, 2020.
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