What is a POS machine and how can I compare POS terminals?
We are currently experiencing a high volume of calls as a result of COVID-19, but we are here to help. If you are concerned about your Home Loan repayments, please go to the home loans support page. If you are a Business customer and need help, please go to the business relief page.
Having evolved from the humble cash register or ‘till’, POS machines – also known as POS systems and POS terminals – are powerful sales, stock control and accounting tools. Cornerstones to many retail or hospitality businesses, POS machines can save valuable time in all these important areas, while reducing the risks posed by human error.
POS simply stands for Point Of Sale, which refers to the place at which transactions take place.
Your POS machine (POS system or POS terminal) is the device that’s used to add up and take payments for what’s being purchased. It can consist of:
Card readers are generally known as EFTPOS terminals (or EFTPOS machines).
But there’s a lot more to a POS machine than all that competing terminology.
In a restaurant for example, your POS machine could incorporate a table ordering and kitchen briefing system, whilst being integrated with a portable EFTPOS terminal. So, the one system manages everything from taking the order to taking the payment.
In a retail environment on the other hand, key components of the POS machine can be the barcode scanner, the receipt printer, and inventory management.
Depending on which POS machine you purchase, you may also be able to pinpoint which dishes (or products) are the most popular, which may not be worth keeping on the menu (or your shelves), and when the busiest times of trade are. It may also incorporate stock control and ordering software. And that’s just the start.
A fully integrated POS system (a POS machine integrated with an EFTPOS terminal/machine card reader) is akin to a great business partner. It could help inform key business decisions through reporting insights, while helping streamline your day-to-day processes. Some of the ways that retail and hospitality businesses could benefit from having an integrated POS system are:
The latest POS technology strives to get customers through the payment phase as fast and efficiently as possible, which is good for your customers and could benefit your ‘cost of sale’. Managing vouchers and other promotions can be quicker, and POS machines are also useful for managing loyalty programs.
A change of mind at the till could be simpler to manage too, with the POS machine deducting products as easily as adding them.
A good POS machine will reduce the time it takes to process each sale, but it will also reap time rewards in sales reporting, inventory management and accounting. Rather than transferring sales data manually into your small business accounting software, your system can do it directly through the right integrated software.
The best POS machines are also intuitive to use, so you’ll spend less time training staff – particularly casuals – and more on your business.
Manually keying in amounts is a practice that can carry the risk of human error. Barcode readers and easy-to-use touchscreen interfaces could help avoid this risk – and the benefits can flow through to back-office systems where manual data entering could be avoided too.
Adding up a bill through your POS machine but then keying/tapping the amount in to your EFTPOS terminal/machine is a practice that’s also subject to human error. Having an EFTPOS terminal that integrates with your POS machine neatly helps avoid that risk by transferring the payment amount from your POS directly to the EFTPOS card reader1.
Most basic POS machines will provide you with a detailed report on your sales. More sophisticated POS machines can allow you to monitor and analyse the sales performance of different locations, departments and individual employees.
You may also be able to gather and utilise data on what’s selling against what’s not, relative profitability, average customer sales and the effects of promotions – all of which will provide you with valuable intelligence for business planning and managing your cash flow.
With the right POS software in your POS machine you’ll know exactly where your stock levels sit based on sales. It may also allow you to initiate re-stock reminders, set up automatic ordering at predetermined levels, and facilitate stock transfers between locations.
Good customer relationship management (CRM) starts with knowledge, which your POS technology may be able to provide. Some popular POS machines help you build customer profiles based on purchase patterns, enabling you to target your marketing and promotions more effectively.
You may also be able to add promotional messages to your receipts, including those that cross sell based on the purchase made.
Every business is different, so will have different POS needs. Remember that a POS is not a standalone machine, but an interconnection of capabilities that together enable you to process customer-facing transactions efficiently – while supporting your business processes.
To help find the best POS machine for your business, develop a shortlist by considering and comparing the products that have your ‘must have’ features. This could include:
The right POS machine (POS system or POS terminal) could revolutionise your business in several ways – from improving customer service to automating stock management. So, it pays to take some time researching the best point of sale machine for your specific needs.
1. Westpac’s products are subject to terms and conditions, fees and charges and certain criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and Terms and Conditions for EFTPOS terminals and Presto Smart, and consider if the product is right for you.
2. The Point of Sale machines are supplied by POS providers, not Westpac. Westpac does not guarantee or endorse those products and any related services. You can find out if your POS is compatible with Presto Smart.
The information in this article is general in nature and does not take your objectives, financial situation or needs into account.