What is a POS System (And Why do I Need One)?


When it comes to Point of Sale (POS) systems, the first thing that probably comes to mind are those old, outdated cash registers you see at your local mom and pop shop. While this is still true for some businesses, many of them are trading in their tried-and-true cash registers for modern-day POS systems.

Whether you’re a new business owner or a seasoned veteran that wants to replace their outdated cash register, here’s everything you need to know about what a POS system is and why you need one.


Defining a POS System

Before we can understand POS systems and all they have to offer your business, we first have to gain a solid understanding of what exactly is a POS. POS stands for “Point of Sale” and can be defined as the place where a product or service is exchanged from the seller to the customer.


A POS system is the technology that combines software and hardware to create a complete point of sale system. These systems allow businesses from restaurants and retail shops to salons and spas to track sales, manage inventory and process payments, from one central location — their POS system.  


Now that we know a little bit about what exactly point of sale is, we can dive a little deeper into the different types of POS software that are out there and exactly how this will benefit you and your business in the long run.


Types Of POS Software

When it comes to POS software, most people assume there’s only one type. However, the reality is that POS software can take many different forms. Here are three of the most common software types you can expect to come across in your search for a POS system.

Traditional Point of Sale Systems

Restaurant Manager POS

Taking it back to basics. Traditional POS software, also known as “legacy” POS systems, are on-site technology that stores your business’ information on premise. Traditional POS software saves information through a closed internal network. To access that information and stored data, you’ll need to log into the physical device at the business location. Here are some benefits and drawbacks of a Traditional POS system.



  • Local network connection, so even if the internet goes down, your POS will still work
  • Commercial grade hardware that will stand up to harsh environments
  • More mature, feature-packed software



  • Usually a bigger upfront investment  
  • Updates are sometimes manual and time-consuming
  • You can only access business data from the in-house system


Cloud-Based POS Systems

On the other side of the fence, you have cloud-based POS systems that are fully web-hosted. This means all of your business information is stored on a server at a remote location, known as the “cloud.” Since the data is stored in the cloud, this allows you to access information from anywhere there is an internet connection.



  • A more manageable up-front investment
  • Automatic software updates that include new features
  • Business data is easily accessible to users from any device with an internet connection



  • Cannot access information or take payments if the internet goes down
  • A limited amount of features because the software isn’t as advanced as their traditional counterparts

Hybrid Point of Sale Systems

Duet POS System Installation 

If you’re looking for the best of both worlds, a hybrid point of sale system is the way to go. Hybrid POS systems store information on both an internal network and a hosted remote server (cloud). This unique setup allows you to do more with your POS system, think of it as the best of both worlds. Hybrid POS systems give you the ease of use that the traditional pos system provides, as well as the on-the-go features that a cloud-based system has.


  • Allows you to have remote access to your POS system 24/7/365
  • You can view reports online, make changes to your menu remotely, and manage employees from anywhere
  • Build your online presence and increase customer loyalty with social media management, online reputation management, and customer engagement tools


  • None!

Mobile POS Systems

Server taking a tableside order on Duet POS System

If you don’t want to be tied to the countertop, a mobile point of sale system allows business owners to sell their goods or services beyond the walls of their storefront. By downloading a POS software app on your mobile device, you can conduct business on devices like an iPhone, iPad, or Android tablet. You also have the capability of using mobile POS systems independently or alongside a traditional POS system.   



  • Convenient
  • Elevated customer experience
  • Efficient and accurate transactions



  • Usage is subject to the life of the battery
  • It may not have all the features your business needs


Types of POS Systems

In addition to the various ways POS software operates, it is also designed to serve different industries. Various sectors of business work differently; therefore, each one needs a POS system optimized to deliver maximum benefits.  

Retail POS Systems

Retail POS systems are meant explicitly for retail environments such as department stores, small boutiques, or even convenience stores. These systems provide retail business owners with features that other programs may not such as layaway services, employee commission, customer database, and product matrix for variables such as size and color.

Restaurant POS

If you’re a restaurant owner, a retail POS system will only cause you a lot of frustration. Restaurateurs need a restaurant POS system that will cater to their specialized needs such as table management features, remote printing so orders print out in the kitchen or bar, reservation capabilities, and online ordering.

Salon POS

Salon  POS systems are meant for businesses such as nail salons, hair salons, spas, barber shops, or even pet grooming services. The primary feature that sets these types of  POS systems apart from the others is an appointment booking feature. This feature is the bread and butter of most salons and allows business owners to track all of their customers’ information such as appointments and a detailed account of their service history.


Must-have POS Features

Now that you know what features set each type of POS system apart from the other let’s take a look at some universal features that apply to most businesses.

Inventory Management

Proper inventory management will help you track crucial information like quantity on-hand, inventory valuation, and let you know when it’s time to reorder specific products.

Employee Management

The ability to manage employees is another feature your point of sale system should have. This feature enables you to have specific functions geared towards your employees, such as clock in and clock out capabilities, payroll, individual sales reports, and employee scheduling.

POS Reports

POS reporting gives you a breakdown of all the activity that took place at the point of sale and packs it into specialized reports that allow you to analyze all of your business’ valuable data — giving you the power to make smarter, data-driven decisions.

Customer Loyalty Programs

Customer loyalty programs allow you to bring new and returning customers back to your business strategically. These programs collect customer data at the point of purchase and leverage it for things such as marketing campaigns, special promotions, and discounts.

Third-party integrations

Many business-related software applications integrate with point of sale systems to help streamline your entire operational process. For instance, Restaurant Manager integrates with third-party applications such as Property Management Systems, kitchen display systems (KDS), and inventory management. All of these third-party applications work in tandem with your POS system to ensure optimal functionality.



SkyTab Pay-at-the-Table Solution


Although this feature is only applicable to restaurant business owners, a pay-at-the-table feature delivers an unmatched experience for your customers and protects your business from chargebacks because you can accept EMV transactions with a device like Restaurant Manager’s Skytab.


What is POS Hardware?

Now that you know the different types of POS systems and how they operate, let’s talk about hardware. POS hardware is a vital part of any point of sale system and typically sold as a bundle that includes all the peripherals you’ll need.  Depending on your specific business needs, your POS hardware bundle may consist of some or all of the following components.

Touchscreen Monitor

Regardless of the type of point of sale system you choose, every one of them will come with either a touchscreen monitor or tablet interface. These devices are what make it possible for the user to interact with the software and perform all of the functions necessary to complete a point of sale transaction.

Credit Card Reader

Since more and more people are using credit cards than ever before, it’s essential that your point of sale system includes a credit card terminal. According to Business Insider, there are currently 416.5 million credit cards and 174.9 million consumers with access to a credit card. Credit cards add a sense of security and convenience to its users that cash may not.

Cash Drawer

Despite the rise in digital payment technology, at some point or another, someone will walk into your store and pay with cash. Having a cash drawer for your POS system provides a safe and secure place to store cash, coupons, and gift cards from daily transactions.

Receipt Printer

Receipt printers allow you to give your customers a visual confirmation of their transaction with you. Receipt printers can also be a great marketing tool for your business. Custom footers can be used to promote things such as follows on social media, coupons, surveys, or any other special promotions. You can also use a receipt printer to print employee shift reports or your end of day sales report.                                                                                                                                       

Barcode Scanner

If you own a retail business or maybe a restaurant that also sells souvenirs, you’ll want your POS hardware bundle to include a barcode scanner. Barcode scanners not only make transactions faster, but they also significantly reduce human error when ringing up products.


When it comes to barcode scanners, the two most common types you’ll come across are a 1D (one-dimensional) and 2D (two-dimensional) readers. A 1D or “linear” barcode is a series of vertical lines commonly found on things such as cereal boxes or cartons of milk.


A 2D barcode is a series of shapes (usually squares) arranged in a matrix — up and down, left and right. An example of this would be a QR code or the PDF417 code that is on the back of your driver’s license. Both of these barcodes contain much more information and data than their linear counterparts. For instance, if you go to a liquor store and purchase a bottle of vodka, have you ever noticed that the cashier may scan your driver’s license? That barcode on the back of your license contains all the same information that is listed on the front of your license such as your date of birth (for age verification), name, address, and so on.


Where Can I Buy a POS System?

Many POS companies on the market specifically focus on certain areas of business with their systems, such as restaurants, retail locations, and salons. So it’s always a good idea to search for a company that specifically caters to your particular area of business.


When it comes time to purchase a new POS system or upgrade an existing one, there are some things to keep in mind. You should be thinking about factors such as cost, user-friendliness, and add-ons. But before you can even think about any of that, you need to figure out which POS company to choose.


Point of sale systems are typically sold one of two ways:


1. Directly from the software company

2. Via a third-party reseller


If you’re looking for a more hands-on experience, buying a POS system through a reseller is the best way to go. A local reseller will be able to come to your business, in person, and walk you through the entire process from start to finish.


What is the Cost of a POS System?

When choosing a POS system that fits your business, you also need to find one that fits your budget. Although cost is important, it’s not everything. The most vital factor you want to keep in mind is quality. Compromising quality for price is a big no-no when looking for a POS system — the idiom ‘you get what you pay for’ comes to mind.


A solid POS system can be the difference between a successful business and a failing one. Picking the cheapest option may save you some money now, but all the time spent dealing with issues that may arise with a more economical system may cost you extra money in the long run.


Benefits of a POS system

We have covered just about everything you may need to know about POS systems. Now we can answer the question: why do you need a POS system for your business?


  • To increase productivity and operational efficiency so you have more time to focus on other areas of your business.
  • To track important data so you can make smarter, more profitable business decisions.
  • Ability to process different forms of payment such as cash, credit cards, gift cards, etc.


The Wrap Up

Now that you know what a POS system is and how it can help your business, you can start narrowing down your search and making a final decision. Good luck, friends!




Author: Remigijus Pavydis