What is POS?
"POS" is an acronym for "Point of Sale", which is in itself a shorter form of "data capture at the point where a sale is made".

The opposite of "point of sale" would be writing information on receipt pads, or entering it into an off-line cash register. That data would later be either keyed or loaded into a computer where software would process the data.

Before the spread of inexpensive PCs, the most common point of sale device was the ECR (electronic cash register). This accumulated limited sales information and print tape summaries at the end of the day. The more advanced registers might even record sales on a cassette tape or other storage device which could be read by a PC.

Computerised POS systems replace the cash register but essentially do the same job. The computer, however, can record vast amounts of information about the sales process. When connected to a network, all of the "cash register computers" can communicate with each other and with a central system. Inventory can be updated, customer information is available to the sales clerk, so you always know how your store is performing.

The scanner is tied to the cash register, which updates the store's central inventory instantly.

Our POS systems are inexpensive, easy to install, easy to use, and very reliable. The key is to tailor the purchase to the needs and spending level of your shop.

SOFTWARE CONSIDERATIONS

The central component of our POS systems is the software. This defines exactly what the system will do.

Common Software Components:

• Stock control: Our PoS systems include inventory tracking. Each item sold is listed in the inventory file with its description, price and cost. More advanced features include dozens of data points about each item: taxable, discountable first purchase, first sale, more recent purchase and most recent sale, cost and the price, markup.
  
  Datatouch POS systems maintain a count of the quantity in stock of any item. In practice the count is seldom 100% accurate. Theft, breakage and simple oversight result in some errors creeping into the system.
  
  Even with a POS system controlling the inventory, a physical count of stock is still required from time to time. The programs, reports and techniques for taking and recording an inventory count vary from system to system. Some are better than others; some are just so bad that they're never used. This is where portable stock take units help.
  
  Some software assumes that all inventory is kept in very specific places. It assumes that one can walk to that location and count everything. In many retail stores that's not the case; products may be displayed all over the store in settings. Even if that's not the case, customers have a habit of picking an item up in one place and laying it down in another. Again, our portable stock take units overcome this.
   
• Suppliers: Our systems keep a file of "suppliers". The inventory stores items along with their supplier. Each item is identified by both supplier and part number.
   
• Customers: The key to any sales activity is customers and customer relations. POS systems provide various levels of customer record keeping and later communications.
  
  In its most simplistic form, PoS doesn't need any customer information. If a shop is selling coffee, there's little need to get the customer's name and address at the point of sale. On the other hand, if the store is selling say TVs, it can be very important to record information about the customer so they may be contacted when new products are available.
  
  When evaluating POS systems, consider the data that can be stored for a customer, the ease of finding an existing customer, and the ease of entering data.
  
  Note that some systems require customers to be entered into the database outside of the point of sale screen. That makes it awkward to add a new customer who's standing at the counter with a purchase. ShopTouch allows customers to be entered at the point of sale.
  
   
• Mailing lists: If the POS system keeps customer information there must be a way to use that data. ShopTouch can export to automated mailing-lists as well as mailing labels, envelopes, letters and mail merge.
  
  Mail Merge is the most generic form of address handling. ShopTouch exports name and addresses into Word & Excel.
   
• Point of Sale: The heart of the POS system is the actual point of sale operation & is the most important piece of the software.
  
  ShopTouch is designed for "character based user interface". This simply means that the operator doesn't need the mouse; everything can be done on the keyboard. With counter space at a premium, a small footprint for the keyboard or touch screen is important.
  
  POS procedures should be evaluated carefully. The most useful questions follow the order that actions are typically taken. Here are some questions to ask:
   
  • How is the sale started? If a customer account is required, is there a simple lookup feature which can quickly find the customer by account number or name.
    
    Is there a simple "cash sale" procedure which does not require collecting customer name and address information?
     
  • How are items entered? If a scanner is used, what is the manual backup procedure when a bar code won't scan? Is there an effective way to lookup items in inventory?
    
    Is there a method for adding an item to inventory during the sales process? Many shops and stores have items on the shelf which, for whatever reason, were never put into the computer. There needs to be a way to sell these items.
     
  • How are mistakes corrected and how are items removed from the sale when a customer changes his or her mind?
     
  • How are line item discounts entered? Is there a method for marking items that are not to be discounted?
     
  • How are payments entered? Does the system limit the number of transaction types (Cash, cheque, Visa card, Mastercard)?
    
    Is there a method identifying payment types which require the collection of special information like serial numbers?
    
     
  • Is there a method for enter overall order discounts? Can this be limited by management policy?

 

• e-commerce: "Electronic commerce" broadly defines business on the internet. Web sites are used to advertise and sell products. E-mail is used to communicate with customers. Traditional POS systems are generally designed to run on a local machine or a local network. This distinction is rapidly changing because of the speed at which the internet is evolving.
  
  POS systems may take advantage of the internet and e-commerce in several ways. The most comprehensive systems may have a complete internet component where a "web store" directly links to the POS system. This approach still requires a certain level of sophistication and a lot of system security.
  
  A middle ground approach is to have the "web store" software collect data on the web server then later transfer that data to the POS system. This provides insulation between the web and the local databases therefore requiring less security.
  
  The most common approach is manual intervention. The web store and local POS systems are completely separate. E-sales are recorded on the web and communicated to the store via e-mail. The e-mail orders are then manually entered into the POS system just as a traditional mail order would be entered.
   
• Management Reporting: The second most important feature of POS systems, after the point of sale function, is management reporting. Unlike an electronic cash register, a POS system can record vast amounts of information.
  
  The first and most frequent report is the simple "Z read". At the end of the day the POS prints a summary of the activity and balance the cash in the drawer.
  
  Most POS systems will have a variety of periodic reporting procedures. Typically there will be a month end procedure and perhaps a yearly procedure as well. The number of reports and the content varies from system to system.
  
  Most POS systems also provide a number of reports and procedures which are run as needed. Sales analysis, for example, may be done seasonally, or reports may be run which target a specific supplier or line of products.
  
  The number and type of special reports varies widely from system to system. Software developers tend to provide far more reporting than any one store will need. Each store finds the particular reports or procedures which are useful in their setting.
   
• VAT: Some electronic cash registers will compute VAT. The unique feature of POS system is the ability to provide supporting documentation. A POS system shows complete sales tax information months, even years, after the sales were recorded.
   
• Sales Analysis: The most basic information is simply the quantity sold for any item. At the item level, the software also tracks summary totals for:
  • quantity in stock
  • quantity on back order by customers
  • quantity on order from the supplier
  • date of first purchase (when did the shop start stocking the item)
  • date of first sale
  • date of last order from the supplier
  • date of last sale
  • quantity sold month to date and year to date

  
  A comprehensive sales history system keeps a full sales history for every item. Every sale is listed separately, thus allowing historic sales analysis.
  
  Our systems allow customer sales history as well. This can be useful in targeted promotions where advertisements or letters can be directed to customers who are most likely to buy particular products.
   

• Purchasing: Our system can quickly evaluate current stocking levels in relation to desired minimum and maximum levels. It can then suggest which items should be purchased.
  
  Purchasing systems typically have several components and steps which revolve around the "purchase order" (PO):
  • Suggested PO's where the computer evaluates stock and suggests which items to buy.
  • Manual PO's which are arrived at manually
  • Receipt of inventory where a shipment is checked in and the released PO is updated.
  • PO Close which records that the PO is completed.

  
  Purchasing systems are very important in some types of business.
  
  If the store doesn't plan to use a formal purchasing system there should be some method of receiving stock outside of the purchasing system and it allows you to quickly enter new items not already in the inventory file.
   

• Bar Codes: Most shop owners immediately associate POS systems with scanners.
  
  Two things are required to use a scanner in a POS system. First, the software must understand the bar code and be able to use it to identify the item. If the store prints its own bar codes, the software will understand it.
  
  The second requirement is that the items must have a bar code attached to them if they are to be scanned. If items are not pre-coded, the store must print its own labels.
  
  
  The best POS software will allow both an in-house item code and a separate UPC code with an automatic cross reference between the two.
  
   
• General Accounting is not necessarily a part of a POS software system. General Accounting refers to payroll, accounts payable, and general ledger. Where the point of sale, inventory, and related functions may have many requirements which are unique to certain industries and certain products, general accounting is largely consistent across most businesses.
  
  Most POS systems exclude General Accounting functions. Rather the software exports to Sage & Excel which are inexpensive.

HARDWARE CONSIDERATIONS

The heart of the POS system is the software, not the hardware. Only two pieces of hardware are required: the computer and a printer. The computer includes a keyboard & monitor.

Other hardware (bar code scanners, receipt printers, cash drawers, etc.) is also integrated into the POS system.

Many small shops can run perfectly well with a single terminal that serves as both PoS terminal and as back office. It's simply a matter of deciding what to do when. New merchandise can be entered into the computer when there are no customers to be checked out. Reports can be run at the end of the day or in the evening.

Many shops start with simple system then, as requirements grow, additional hardware is added.

Common Hardware Components:

• The PC:
  
  Because POS is a well established application, software runs on many different types of PCs using Microsoft operating systems.
  
  Point of sale software has been written for the PC since the machines were first introduced. Even today, there numerous POS systems continue to run as MS/DOS applications. Point of sale is a well understood application and it's one that doesn't necessarily benefit from a graphical user interface and a mouse. In face, a mouse can be a real pest on a cramped sales counter.
  
  Most new POS software is being written for the Windows environment. There are no other options within the PC world. Although many functions of this software will be built for a mouse and use common Windows standards, the actual point of sale program is designed so that a mouse is not required.
  
   
• Monitors:
  
  The computer monitor is the largest piece of most computer systems. Because counter space is often limited, most POS systems are supplied with small monitors. If a network is used, the back office machine might have a full size monitor, but the counter machines, which are used only for point of sale, have small TFT monitors.
  
  The entire system might sit atop the cash drawer to make a very small footprint.
   
• Receipt Printer:
  
  A printer is required to print sales receipts for the customers.
  
  Receipt printers are connected via serial port.
  
  The receipt printer is a rugged, commercial device that is expected to work without fail.
   
• System Printer:
  
  POS software will generally require a "system printer" which can produce management reports. This printer can be a laser, an ink jet, or any other Windows printer.
   
• Cash Drawer:
  
  Cash drawers are fairly standard in size at around 16" x 16" by 4". They can fit under a counter or can sit on a shelf or on top of the counter. The computer, monitor, keyboard and other devices can sit on top of the cash drawer if desired.
  
  Most cash drawers are connected to the computer via the receipt printer.
   
• Scanner: Scanning bar codes is really quite simple. Most PC based scanners are connected via "keyboard wedges". The scanner plugs into the computer's keyboard socket then the keyboard plugs into the scanner. That is, the scanner wedges itself between the computer and the keyboard.
  
  Wedge scanners normally sit idle. When an object of any type is passed with a few inches of the scanner face, the scanner comes on and fires off a laser beam. The reflection of the beam is analyzed by the scanner to decide if the object is a valid bar code. If so, the scanner sends the bar code information to the PC just as if someone were typing it on the keyboard.
  
  The price of the scanner reflects the quality and features. Commercial scanners will automatically discriminate between many different types of bar codes. Less expensive scanners may be limited to only the most common code formats. Some scanners have considerable range, others have to be very close to the bar code. Some scanners can read very small tags, others require larger tags.
   
• Networks: While a small store can work with one PC, it's often better to have more than one PC and connect through a network.
  
  It is very common for software to be priced as "single user" and "network version". The network option puts much more demand on the software and requires special design considerations. The network version will always cost more than a single user version.
   
• Dial-in support:
  
  A final consideration is dial-in for support services. If using a PC and there is a broadband line available, we can provide direct, computer to computer support and training services.

CONCLUSION

PoS systems are a cost effective and practical way for even small stores to manage their business. It is not necessary for the store to invest in everything at once. One can start small and grow the system with the store.

POS is not just for the "big guys". Our systems have made the technology affordable to everyone.