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When you’re looking for the best small-business point-of-sale (POS) system, it’s important to understand what tools you’ll need to run and grow your business. A good small-business POS system lets you process every transaction quickly and securely and has the right software to help you manage administrative tasks more efficiently.
Your business type will determine which type of POS features will be most important to you. For example, a busy coffee shop is more likely to need tools like order management and fast checkout, while a retail boutique is more likely to need tools such as inventory tracking and employee management.
For any small-business POS system, cost (initial as well as ongoing fees), security, hardware requirements and usability are some of the important factors to look at when choosing the best POS system. This article will help you understand what to look for in a POS system so you can make the right decision to fit with your business plan.
What is a POS?
A point-of-sale system (POS for short) lets you register sales and accept payments. It’s like a cash register with a lot of power behind it, and can be broken down into three components:
A POS has hardware that allows you to accept payments. If you’re getting a new POS system, you should make sure it accepts all forms of payment including cash, debit and credit cards and mobile wallets. Some businesses will also look for POS features such as receipt printing, cash drawer integration to hold physical money and bar code scanning.
POS software is like your command center. At a basic level, it allows you to create and find items in your library and record transactions. More robust point-of-sale solutions also feature helpful tools like sales reporting, team management software, [inventory management] and more.
POS systems also take care of depositing funds to your bank account after each transaction.
The right POS for your business can ensure that you capture every sale and help you streamline time-consuming administrative tasks.
When do you need a POS system?
If you want to accept debit and credit card payments and have a streamlined system for tracking sales, it’s probably a good idea to invest in a POS system designed for small business. Even very small businesses benefit from a good POS system.
Having a system for recording each transaction electronically can give you an accurate understanding of what you’re selling. With that information, you’ll be able to make more informed, data-driven decisions about how to operate your business. Plus, having a small-business POS system helps your business appear more legitimate, which is especially important if you’re just starting out.
Here are some important factors to consider when choosing a POS system:
- Initial setup cost (time and money)
- Payment processing costs (e.g., % of sale + charge per transaction)
- Card acceptance (e.g. eftpos, Visa, Mastercard, JCB and American Express)
- Other monthly processing fees (e.g., account fees, chargeback fees)
- Equipment costs/rental fees
- POS software fees
- Level of mobility
- Ability to accept preferred credit cards and mobile wallets
- POS software features (e.g., invoices, ability to store customer data safely, inventory management, team management, customer database software)
Benefits of using a POS system for credit card processing
While you can take card payments using a standard credit card processor, there are a lot of benefits to using an integrated small-business point-of-sale (POS) system and credit card processor. For starters, every time you take a payment using a POS, all the data from the sale is tracked and recorded in the system. This is key for inventory management, which a small-business POS system helps you keep track of.
For example, Square Point of Sale can send you inventory alerts when you’re running low on an item, giving you advance notice of when a reorder is needed. Good POS systems for small business also offer comprehensive sales analytics and data. With Square you can see if you tend to sell more croissants or muffins on Mondays, for example — helpful when you’re placing an order with your supplier.
Small-business POS systems often offer multi-location management, which enables you to monitor performance across your business’s different locations — a valuable tool to have when your business starts to grow. It’s worth noting that some POS systems charge extra fees for every additional location, which can be cost prohibitive when you’re trying to expand your business. Square POS offers multi-location management free, so you can be comfortable knowing that you can grow and manage every location from one account without being hit with any additional charges.
Best POS system for retail
If you own a retail store, you likely need a small-business POS system that offers [inventory management] and can connect to a barcode scanner and receipt printer. Square Point of Sale, our POS for retail businesses, does all of this and more.
With Square Stand for contactless and chip, you can turn your retail countertop into a stylish POS. The USB hub on Square Stand enables you to connect the hardware you need — including barcode scanners and receipt printers, right out of the box without any challenging technical installations.
Best POS system for contractors and home repair
If you run a home and repair business, you’ll likely need a mobile POS system that you can take with you while you’re on the go and enables you to accept secure debit and credit card payments, even when you’re in a remote location or on a job site.
Square’s small-business POS system is compatible with Square Reader for chip cards, which is small enough to fit in your pocket and plugs into the headphone jack of your compatible iOS or Android device. If you’re looking for something with a little more speed, Square Reader for contactless and chip enables you to accept chip cards and contactless payments from cards and mobile wallets.
Want to bill your customers instead of accepting payments on the spot? You can send invoices free with Square’s fully integrated invoicing software, which is perfect for contract work of all kinds. You pay just 2.2% for any invoice your customer selects to pay online with a credit card.
Best POS system for bars and restaurants
Bars and restaurants often require a range of unique and specialised features with their point of sale. When shopping for a good small-business POS system, be sure to look for one that makes it easy to update menu items and communicate with the kitchen or bar with item modifiers and printed kitchen tickets. Well-designed POS systems for small business have the ability to split tickets between customers or manage open tickets for customers who may choose to settle their bar tab later on.
With any POS system for restaurants and bars, you want to easily reconcile cash sales and keep track of payouts so closing the bar at the end of the night is a simple process. And don’t forget about built-in tipping to keep your staff happy. Square POS for small business does all of this, and it syncs easily with great third-party apps like Fresh KIDS, which enables you to have a digital order screen in your kitchen or at the bar. It’s easy to get set up quickly and affordably with our special POS hardware kits.
Frequently Asked Questions About Small Business POS Systems
1. Do I need to pay a monthly fee for POS software or to use a POS system?
Many POS systems for small businesses are pieced together with each component coming from a different company, each with its own set of fees. For example, the POS software provider often charges a monthly fee. That scales based on the size of your business and how many sales you process. The hardware (payment terminal) could come from a separate company and might have a rental fee, along with an annual contract that is difficult to break if you change your mind. Your merchant services provider might charge monthly fees — and even an account management fee — in addition to a transaction rate for each debit or credit card sale. All of this can cost anywhere from $60 a month for the most basic of POS systems to $150+ a month for software with moderate functionality.
But that’s not all. There are often additional (and sometimes hidden) charges for additional employees, advanced reporting and multi-location management. Some small-business POS systems even charge extra for access to customer support. And that doesn’t even include credit card processing fees (which in many cases can have hidden fees and charges of their own).
Square is different. You get a fully integrated, feature-rich point-of-sale system for small businesses, all for one simple charge per transaction. Square’s fees are just 1.9% per tapped, dipped or swiped card payment — that’s it. No hidden fees, long-term contracts, or long-term commitments. There are no POS software fees, and our friendly customer support team is accessible via phone, email or our dedicated support Twitter handle, so you know you can get answers to questions whenever you have them.
Our hardware is affordable, secure and stylish, so you can feel comfortable knowing that your countertop will always look good.
2. What alternatives to a POS system can I use?
If you feel you don’t need a point of sale for small business, but still want to securely accept debit and credit cards, there are a few other mobile tools that accept payments:
Invoices: Square Invoices is an easy way to send invoices to clients through our free POS app, Square Point of Sale. Invoices are always free to send and will cost you just 2.2% for any invoice your customer pays securely online with a credit card. If you need to charge a client or customer on a recurring basis — say, for a weekly dog-walking service or monthly office catering delivery, you can even set up a recurring invoice cadence. Your customers can even choose to securely store their cards on file, so recurring invoices are paid automatically for the same rate as a standard invoice payment. However, invoices aren’t suitable for all types of business, and in general could be more appropriate for repeat clients. For one-time clients, it might be better to get payment in person.
Virtual Terminal: You can get paid instantly over the phone if a customer still prefers to pay by credit card, but you aren’t transacting face to face. With Square Virtual Terminal you can key a customer’s card details directly into a web browser, and have the option of sending a digital receipt. It’s secure, simple and a lot more convenient than manually keying in card details to the mobile app. Transactions processed with Virtual Terminal are charged at just 2.2% per transaction.
3. What’s the difference between POS systems and cash registers?
At their most basic level, small-business POS systems include debit and credit card processing hardware, and will deposit payments directly into your nominated bank account. POS systems for small businesses can also contain software to help you run and grow your entire business, such as detailed sales reports and analytics, employee management and tracking software, inventory management, gift cards, etc.
Cash registers are simply machines that record sales, give change and store cash. It’s important to keep in mind that cash registers don’t enable you to accept debit and credit card payments. You need to work with a separate provider to set your business up with a card processor system, which comes at additional cost. Cash registers have basic functions and can do some simple reporting, like telling you how many sales you made that day.
Square Point of Sale for small business, for example, can show you data which details your busiest times of day each week, what your bestselling items are, and what percentage of your customers are new versus returning. This data is invaluable when you’re making informed decisions such as employee scheduling, inventory ordering and where to focus your marketing or promotional efforts.
If you choose to run your business with Square’s small-business POS system, it integrates beautifully with Square’s stylish, simple hardware and can easily be connected to a cash drawer and receipt printer.
4. Can my POS system integrate with my accounting software?
Many cloud-based small-business POS systems enable you to link your accounting software, which will populate the ledger with each day’s transactions automatically, summarise the data and populate into the appropriate accounts. This is another benefit of a software-based POS system over a cash register, which is unable to integrate with third-party platforms.
For example, Square POS integrates with Xero and QuickBooks Online, automatically feeding sales data into the respective platform and minimising the need for manual data entry. It’s a time-saving exercise which will improve your business efficiency and simplify your reconciliation processes.
Turn your iPad into a POS in minutes
The new Square Stand: One simple device that’s easy every step of the way.
When you’re looking for the best small-business point-of-sale (POS) system, it’s important to understand what tools you’ll need to help run and grow your business.