What is a POS System?

A POS system is a critical cog in any business operation. You’d be surprised at how many businesses either don’t have one or don’t think about implementing one until it’s too late. We’d like to believe that these systems are cookie-cutter solutions, but they are not. Let’s first explore what a POS is and the various functions it provides for your business.

POS 101

It’s fair to think of a POS system’s primary function in comparison to that of a traditional cash register. It’ll help you scan products, ring in a sale, and calculate taxes, among many other things. One important aspect of a POS system is that it helps business owners customize every aspect of all the traditional cash register functions and more.

Every POS system is made up of two components – POS hardware and POS software. Once you’ve decided on a system, the POS software is then installed on the hardware similar to standard software used on computers to establish an operating system. Most hardware includes a touchscreen monitor, receipt printers, barcode scanners, cash drawers, etc.


For restaurants in the food and beverage industry, POS systems are the hub of successful operations. Often, they require slightly different systems than that of a retail business.

For full-service eateries, a restaurant POS system should be capable of creating a ticket, adding items, and closing out the check once the customer finishes their meal and is ready to pay.

Another important functionality is the ability to ring up orders at the front of the restaurant and send it to the back of the restaurant where the kitchen is located. Orders can be displayed in the kitchen via a Kitchen Display System (KDS) or printed out for viewing.

A restaurant’s POS system should have the flexibility to be mobile-friendly and capable of contactless payments. Having these options allow your restaurant the capabilities it needs to be successful.

Your ideal POS should allow for a seamless flow of information to ensure a smooth dining process for the perfect customer experience and ease of use for employees.


Previously, we spoke of how there are two tangible components that make up a POS system – Hardware and Software. However, operationally, there are many ways you can structure your system.


Cloud-based systems are popular as they store data on remote servers (the cloud), making all the information accessible via the internet and the system’s portal. To use a cloud-based POS system, you must have internet capabilities.


Legacy POS systems are the traditional systems that save data to a local server. Unlike a cloud-based system, the data is not accessible via the internet. It must be accessed on a laptop or local server.


If you’re looking for a system with the best of both the server and cloud-based systems, a hybrid system might be the one for you. You’ll be able to enjoy real-time reporting as well as the advantages of a local system like faster speed and the ability to operate if the internet goes down.  


Open-sourced POS systems offer complete control to customize your software to your business needs. This type of system caters to tech-savvy business owners and often requires quite a bit of technical expertise to set up. Information is stored at your business location rather than on remote servers.


By utilizing tablets and mobile devices, mobile POS systems allow employees the flexibility to complete transactions from anywhere in your business. This type of system is perfect for small stores or cafes, or it can complement larger POS systems for bigger restaurants.

Mobile POS systems have been proven to increase table turns and the overall flow of your business.


While your ultimate wish list may vary depending on the industry, here are a few common things to look for when shopping for a new POS system.


Keeping track of inventory is a vital aspect of business, no matter the industry. This is especially true for restaurants, as too much inventory could result in excess waste and spoiled food.

The ideal system should provide:

  • Inventory tracking – The system should track color, size, style, and attributes for retail and raw goods in the food and beverage industry.
  • Inventory tracking across multiple locations.
  • Inventory reporting – Easily see how much cash flow is tied up in stock.
  • Product information – You must be able to access SKU information for easy scanning and fast transactions at the point of purchase.


Fostering customer relationships is an integral part of your business. You’ll want to have a  system that helps you get to know your customer over time and their purchasing habits to  create personalized marketing strategies.

Look for the following customer management features:

  • Capture customer data such as name, phone number, email address, and birthday
  • Create and manage customer loyalty programs
  • Utilize email marketing to communicate with customers about upcoming events and promotions
  • Keep track of your customer’s purchase history to create more personalized marketing campaigns


Having a system that accurately allows you to track your employee’s performance is vital for the  success of your business.

In addition to tracking employee progress, your POS system should:

  • Allow you to assign job-based permissions and individual permissions
  • Create and manage employee schedules
  • Track employee hours
  • Allow for secure staff logins


You’ll need the ability to capture and analyze sales metrics, inventory, customer data, and employee data. Sales metrics are an invaluable tool to help you grow your business further.

The POS sales report will give you insights into the following:

  • Net profit and gross margin
  • Product, timeframe, and employee sales reports
  • Number of Items sold and total cost
  • Profit percentage


Your POS system must be compatible with third-party integrations such as payroll software, email marketing platforms, and online ordering services. For instance, for restaurants, if you intend to use DoorDash, make sure the software you choose seamlessly integrates so customers can access your menu, place orders, and pay through the app.


Contactless payment has become an essential part of all businesses, especially restaurants. Most POS systems come with a separate integrated payment terminal. The credit card readers should not only have the capability to take traditional swipe payments but also chip card and NFC contactless payments.

We hope we’ve been able to shed some light on what to look for when shopping for a new POS system. It may seem like a daunting task, but with proper knowledge and understanding, you’ll be able to secure the perfect system to fit your business needs. If you have further questions about what POS system would be best for your unique needs, feel free to give us a call at 210-926-5677 or schedule an onsite visit HERE. To stay up-to-date on the latest POS systems available and industry news, please follow us on Facebook.