What is a Point of Sale system (POS)

Written by Kadence Edmonds

retail florist

If you are on the search for a new point of sale system, then gaining a solid understanding of how they work is an essential first step. No matter what industry you work in, this overview will guide you in the right direction when it comes to making a decision on what POS system you should choose for your business. 

In a time of significant instability and uncertainty for businesses, it’s vital to safeguard your business’ profitability. Thankfully, contemporary technology has never been more affordable and accessible, and this has given smaller businesses the ability to maintain a level playing field with their much larger competitors who previously enjoyed a monopoly on the latest tools. Choosing to invest in modern, cloud point of sale technology has the potential to future-proof your business, enhance efficiency, boost profits, and ultimately compete with the established industry giants. 

But before investing in cloud POS, there are a number of considerations to make. Let’s firstly start with the basics...

What is a point of sale system?

A point of sale system, often referred to as POS, is the place where you finalise sales for customers. POS systems are typically formed of a hardware and software combination, specially-designed to help you make sales, take payments, and track inventory. 

They differ significantly from traditional till systems and cash registers which do little more than record sales. By contrast, contemporary POS systems are capable of generating detailed reports, managing employee workflows, and automating manual processes like stock control.

The wide range of functions provided by modern POS systems gives business owners an unparalleled level of insight into how their business operates. A key result of this is that managers and owners can make smarter business decisions, backed by data, in order to increase revenue and minimise unnecessary costs. 

How does a POS system work

So what exactly does a POS system do during checkout? The general workflow when processing a transaction goes like this. 

A customer is ready to buy a product or service in your store

When you have a brick and mortar store, customers will finalise the products by having a shop assistant ring them up at your POS system. Depending on how your store is set up, a barcode scanner can be used to look up the items, or items could be loaded as buttons under categories on the till screen.  

The POS system calculates the final price of the sale 

When all items are scanned or selected, the POS system will calculate the total including relevant sales taxes. 

The customer pays

To finalise the purchase, payment must be made. Depending on your business, the payment options can include debit or credit card, cash, gift cards, layby, loyalty points, applicable mobile devices like Apple Pay or even buy now pay later services like AfterPay.  

The transaction is completed

Once payment has been authorised by the customer’s bank or applicable provider then the sale will be finalised. With payment approved, the POS system will either print out a receipt or give the option to send a digital version and the customer can leave with the items they have bought.  

POS Hardware

Generally speaking, POS hardware units consist of a terminal or computer (like a touch screen monitor), receipt printer and cash drawer.

Touch screen POS terminal 

In brick and mortar stores, the terminal is the central piece of hardware for your POS system. If you buy hardware from a POS provider, the touch screen terminals are usually industry built computers specifically designed for constant use.  

These specialised computer devices will allow for connections to other peripherals your store may need like barcode scanners, customer displays, receipt and kitchen printers and cash drawers.  

The additional peripherals that form a complete POS system can be connected via cables or, sometimes, wirelessly. Depending on the nature of your business, you may need to consider adding any of the following to your wider POS setup: 

Receipt printer: this is a small printing device used to issue receipts

Tablet: Portable devices like iPads, or the Epos Pocket  that can be used as an alternative to a desktop POS system

Barcode scanner: Electronic scanner used for reading barcodes. These allow you to scan and identify product items at the point of sale. Barcode scanners can also be used to check prices, stock levels and other product details.  

Credit Card Reader: A card card terminal used to take payments from chip & pin, contactless, or other payment methods

Cash drawer: Even with the decline in the use of cash in today's society, you will still need to have a safe spot to store cash.  A cash drawer is exactly that. And when connected with your POS software it can track the number of times it is opened and accessed so you can minimise theft and reduce permissions to allow for openings for no reason.  

POS Software

POS software includes all the tools and applications you need to run your business more effectively. It provides reports which help business owners make more informed decisions, and optimise their operations for growth. 

There are two main types of POS systems: Cloud POS systems, like Epos Now, and legacy, or traditional, POS Systems. The primary disadvantage of legacy systems is that the server remains on-premises. Cloud-based POS systems on the other hand utilise SAAS (software as a service) payment system. This involves paying a monthly fee to your POS provider which can be a more cost-effective solution for smaller businesses.  

Cloud POS Systems 

Cloud Point of sale systems are the future of small business management. One benefit of cloud POS is that it stores all of your businesses data and information on encrypted remote servers rather than on local devices. This feature is beneficial because this data can then be accessed remotely from any device using an internet connection, giving owners full visibility of their business. Other benefits include:

  • Up to date software: with cloud POS, updates are routine and automatically downloaded to your system without any further charges
  • Scalability: Cloud POS is easily scalable and grows with your business. Adding additional devices such as handheld order stations can be easily set up 
  • Security: Locally stored data is risky.  If theft or damage occurs to your business then you risk losing your data forever. But with your data encrypted on remote servers you have more chance of the information staying secure

Legacy POS systems 

Legacy or Traditional POS systems differ from cloud-based systems on many levels.  Access to these systems is generally limited by physicality as data is stored locally within your business on your POS hardware and runs through an internal network. Additionally, these types of systems can be costly because you have to pay for the software outright and updates are generally not included in this cost.  

Common POS Software features 

POS Reports 

Having a POS system that can generate a range of in-depth reports is beneficial. POS reports will allow you to have insights into how your business is performing by seeing what you’re selling and how much you’re earning. Having clear, concise reports will help to improve business performance and allow you to make informed decisions.  

Inventory management 

Quality POS systems will have inventory management functions built-in. This will allow you to keep an eye on your inventory seamlessly, from seeing stock levels at a glance, to knowing sale quantities on particular items, as well as being alerted to low stock levels. 

Customer relationship management (CRM)

CRM tools are extremely useful in helping build customer loyalty and establishing a brand.  Having this within your POS software allows you to see exactly what a customer purchases and tailor marketing to suit. Personalising your customer loyalty offerings are incredibly beneficial to improving customer experience and service.  


Receipts out of a POS system come in two variations, digital or physical.  They are used as proof of purchase for customers and aid in making processing refunds quicker and easier.  

Epos Now allows for receipts to be printed via a connected receipt printer or they can be emailed directly to the customer at the end of the transaction.  

Payment processing 

Processing payments is an important part of a POS system and its functions. For a customer to successfully complete a transaction they must pay for the item they intend to purchase. 

POS systems will allow for a range of payment options:

  • Cash 
  • Credit and debit card transactions: Done through the use of a card processing/EFTPOS terminal.  With POS systems, these payments can be both integrated (automatically synced with the merchant machine from the POS) or unintegrated (manually entered into the machine).

Integration Capabilities 

Advancement in technology sees point of sale systems expanding their capabilities through integrations. Having the ability to connect your POS system seamlessly to other platforms you use like accounting software or ecommerce sites is beneficial in getting your business to stand out. 

Let’s take a look at some of the key integrations. 

Employee Management 

Having a POS system that can integrate with employee management platforms will let you better evaluate your staffing needs automatically against concise data. You will be able to create fully costed employee schedules based on real data that is automatically synced. 

Accounting Software

Statistics show that small businesses can spend over 80 days on administrative tasks, with the majority of this time being spent on accounting.  However, with POS and accounting software integrations data can be automatically synced between the two platforms saving hours of manual data input and cutting down costs.  

Ecommerce Platforms

With the rise of online shopping, it is more important than ever for stores to have a shoppable online presence. But while in the past it has been an overwhelming task to keep track of inventory levels between a physical store and online store, integrations now take away this manual process. 

Syncing your ecommerce store with your POS system will keep inventory levels automatically updated, sync product data changes and much more. 

Order Ahead applications 

With the constant changes experience globally due to the pandemic, order ahead applications have seen a rise in popularity. They help to keep your staff safe by reducing interaction through having customers order and pay all from the convenience of an app. And when these applications are integrated directly with your POS system, the whole process is seamless.  

Loyalty Integrations

Research shows that it can cost up to fives times more to attract new customers than it is to retain existing ones.  So making sure your business is utilising a quality loyalty program that is integrated with your POS system is important. 

Marketing Integrations 

While quality POS systems will usually have an in-built CRM, having the ability to integrate with other marketing platforms like MailChimp is beneficial to driving your marketing further. Integrations like this allow your customer database to automatically sync, saving you from hours of manual data entry.   


If you have any questions or would like more information on how POS could benefit your business, get in touch with our specialist POS consultants. They'd be happy to talk you through any queries you may have or arrange to call you back at a time convenient to you.

Work with industry experts in POS Systems

If you are on the hunt for new devices for your business, then look no further than Epos Now. Our proprietary software and high-tech hardware can empower you to get more done and grow your business. 

We offer award-winning Cloud POS software that can run on countertop, tablet, and handheld devices, all of which integrate seamlessly with numerous platforms. On top of this, you can download our software and run it on your existing POS systems.

Speak with a POS consultant today to see what Epos Now can do for you.


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