What is Point of Sale Software?

Jane Harmon

Point of sale (POS) software is software that retailers use to calculate sales and operate the cash drawer; it is the computerized cash register. Point of sale software adds up the sales total, figures the state sales tax, calculates the change back from the amount tendered, and automatically adjusts the store's inventory levels to debit the amount of inventory sold.

Point of sale software is used to operate a cash drawer.
Point of sale software is used to operate a cash drawer.

Point of sale software packages can vary considerably in capability, so the savvy retailer will want to assess their own situation and needs before making a selection decision. Inventory management capabilities suitable to a multi-store chain are probably overkill for a single boutique store and the care and feeding it would require is probably not worth the additional effort.

Modern POS software allows management to track, analyze and report on sales trends.
Modern POS software allows management to track, analyze and report on sales trends.

At a minimum, your point of sale system should handle sales, manage your inventory database, run a barcode scanner and allow you the capability of querying your inventory and sales database in a flexible way.

Make sure your point of sale system can search your inventory database not only on item description and SKU (stock keeping unit - a unique ID you assign to all items you carry), but by category, vendor and keywords. Without the keyword search capability, all your employees must know and remember the exact SKU for every product; a keyword search informs your employees that the hair bows for baby girls, for instance, are entered as 'girls hair bows' and not 'hair bows for girls'.

Data storage is cheap these days, so your point of sale software should be able to track and record the date-time of every sale ever made in your store. This information is useful for a number of different analytical tasks. For instance, are sales slowing down for tabletop fountains because they are just 'over', or because their sales always drop in the summer months? The most unexpected items turn out to be 'seasonal', and your point of sale software should be able to help you determine what demand is likely to be.

If you are purchasing your first point of sale system, it is vital that it be able to export your information in a universal format. This is philosophically akin to the premarital agreement — you must plan ahead for the day when this system no longer serves your needs and you will want to be able to easily move your entire inventory data and sales history data to your new system.

Purchase your point of sale system from a company that has a reasonably stable history and expected future; orphan software that breaks down or starts garbling your data can cause enormous unplanned-for expenses.

A poorly-designed or simply ill-suited point of sale system can be a daily management headache; a good one that fits well with your business can be your most valuable 'employee'.

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Discussion Comments


Where do I start? I have 10,000-plus books. I want to inventory them in a format acceptable to Amazon for online selling. My desktop computer is on the second floor. I have a barcode for scanning on the first floor. What device do I scan into on the first floor that will download to the computer on the second floor? Also, how does this integrate to a POS system? What hardware and software do I need? Thanks for your suggestions!


I would look into RICS Software. It can do it all for the single store and the multi-store. It is web based, easy to use and very affordable.


Having seen the recent RetailPro team's latest versions and knowing their long history, I would heartily recommend contacting them. One of their executives and I worked together in a company previous to his move to RetailPro. The excellence is in every aspect of the product and support I have seen.

with warm regards, Stephen Mills


Has anyone heard of www.pointofsale-systems.com, we are setting up pos systems in our restaurant and our looking to find good quality pos systems.


what would be the most suitable programming platform to use for a restaurant having multiple outlet and the HQ need to see the sales entry of any outlet realtime at any point of time. Is it web based such as ASP.NET or PHP or non web based development system?


POS Software has come a long way in the last few years, there are now many modules to allow business to grow without incurring the full cost of a full scale point of sale system until they are an established business. With the ban on smoking in August 2007 many hotels, bars and restaurants now find they are serving more and more customers outside, this is where a useful little device called a PDA comes in handy, enabling staff to take orders remotely using a wireless system. hospitality and retail trade alike

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