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Increase Your Profits with a Point of Sale (POS) System
By: Brian Cook
Whether you operate a chain of restaurants, a mom-and-pop convenience store, or a medium-
sized retail shop, you are in business to make money. And, one of the most critical
aspects to your profit and loss is your ability to track information… you need to know
which products are making you money, what items need to be re-ordered, who your customers
are, and so on. This is where today’s point of sale (POS) systems play such a valuable
role.
In the not too distant past, retailers used mechanical cash registers to record sales
onto a paper tape which then had to be manually transcribed into the company’s accounting
ledger. Later, electronic versions of cash registers were introduced which allowed
business owners to track more of the data pertaining to each transaction (for example,
management was able to track all sales and refunds by each cashier). Today, cash
registers have evolved into modern computer-based point of sale systems, which let you
track more information than previously imaginable.
Some of the ways that a point of sale system can help you increase your profits include
analyzing your product margin, tracking sales, increasing the accuracy of your pricing,
and maintaining customer contact.
As a business owner, you know how important it is to keep a close watch on the margin of
each product since you want to focus on selling the things that make you the greatest
profit. A point of sale system can help you quickly identify your greatest money-makers
and make decisions about how much of each item you want to stock. (If you have a limited
storage area, it doesn’t make sense to fill it up with low-profit items).
A point of sale system also allows you to know, practically at the push of a button, how
much cash you have in the till (and how much of it is profit!), the type and amount of
each product sold that day, and how many items are still on the shelf. You can even set
it up to automatically notify you when reaching the re-order point on any item.
With the advent of barcodes and barcode scanners, retailers now enjoy greater accuracy in
the pricing of their products that ever before. If you need to increase the price of a
“widget”, you simply make the change in your point of sale system and all widgets
immediately reflect the new price. Plus, your cashier or sales clerk doesn’t have to guess
what any product costs (which might cause you to lose money)… they just scan it and the
correct price is automatically applied.
Marketing 101 tells us that an existing customer is worth a lot of money to a business owner
because they are likely to buy from you again and again in the future (this is known as the
“residual value”). Because of this, you should make selling to your existing customer base
part of your marketing plan. A point of sale system lets you keep track of customer names,
addresses, and purchase history… just imagine how you could use that information to
generate more sales!
Hopefully by now it is clear that a point of sale system can help you track the information
that is critical to your business success. This includes analyzing your margin, tracking
each day’s sales, increasing the accuracy of your pricing, and maintaining contact with your
customers. Armed with this information, you can make informed decisions and take actions
that are sure to increase your profits.
About the Author
Brian Cook is a freelance writer whose articles on point of sale (POS) systems have appeared
on many websites. You can find more of these at
www.pos-free-software.com
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