point of sale financing
As a shop owner you would be familiar with the term, POS and as a consumer you might have come across the term POS financing or point of sale financing. So what do these terms mean?
Starting with Point of Sale (POS), it is a system containing software and hardware which acts as a crucial part of business nowadays. The POS system can be an electric cash register or an integrated computer that records your business data and manages other aspects of the business like inventory, analytics, and sales reporting. The system helps in maintaining as well as growing the business.
Nowadays the system has taken a digital face, where you can checkout your customers wherever you are. To do so, you just need a POS app and a tablet or phone with internet connection.
On the other hand, Point of Sale financing is an option available for consumers to pay for a product or service. In such a system the shop owner offers the customer a financial solution by a consumer financing loan in the form of credit card and installment loans.
Point of Sale?
Point of Sale is any place where a transaction can occur for the product or service. For retail store owners it can be an area surrounding the cash register. Let’s have an example for better understanding. Imagine you were at a restaurant, after completing the lunch you have paid to the cashier instead of the waitress serving you the food. The area where you have paid, probably a cash register, is considered as a Point of Sale.
Point of Sale System
As mentioned previously, the POS system includes a software and a hardware, together it forms the system that allows the shop owner to accept the payment by any means. The system is not limited to payments but also records the information of payer, the inventory and employees.
You might have noticed the set up consists of a desktop, printer, scanner payment processor and cash register. Such a system is a simple example of a traditional POS system. This conventional way was replaced when the concept of cloud came into notice. With such advancement the POS system became mobile. Such evolution allows owners to manage the business just by few clicks on mobile or a laptop with internet connectivity.
How does the POS system works
Let’s understand the workflow of the POS system
- When a consumer decides to buy the product or service: For the physical store, the consumer asks the sales associate to add the product in the cart, and to do so the associate scans the product barcode or scans the product visually using the camera. On the other hand, for online stores, such a step occurs when the consumer adds the item to the cart and goes for the checkout option.
- Your Point of Sale system calculates the price of the product: The system includes all the chargers related to the product including minimum retail price, any taxes or service charges. The system also updates the inventory to show that product is sold.
- Payment received by the customer: For compilation of the sale, the consumer pays the final amount using cash, online payment, credit card, debit card, gift card loyalty points or point of sale financing. Depending upon the transaction method selected by the consumer, the system asks the bank of the consumer to authorize the transaction (not required for cash of course).
- The final step of completion of transaction: As the transaction is approved by the consumer’s bank, the sale is officially completed. A printed receipt of the products and payment details is generated and given to the consumer, the same is recorded in the system for future reference.
Benefits of Retail Point Of Sale Systems
The more the inventory is organised, the more will be your sell. And you already know that the more you sell the more you earn. So a good POS system manages your inventory and calculates your inventory turnover. It will also alert you when the stock is about to end, and when you need to re-order. The system does it just by showing those items as dead stock.
IMPROVES RELATIONSHIP WITH CUSTOMERS
The POS saves the customer details and purchase history, which helps you in knowing your customers in a more precise manner. It is a huge plus point for retail store owners. When you advertise your store, this information helps you know precisely what kind of customer you have to target and what kind of customers will be interested in your sales.
STORES YOUR SALES DATA
The POS system is able to generate reports of your sales no matter whether it is a daily report, monthly or yearly one. Such reports may help you analyse your sales entirely and give a basic idea of profit and loss.
One of the biggest advantages of the POS system is employee management features. It makes you aware about the number of employees required and whether your firm is understaffed or overstaffed. Using the system, you can monitor the performance of each staff member.
HELPS IN EXPANDING YOUR BUSINESS
This POS system with all the above features is capable of expanding your business to many folds. With an eagle eye watch on every aspect of business new heights can be achieved.
So, retail POS systems are essential nowadays for the smooth running of the business. Using such a system, you just need to keep an eye on your software where you capture all the data. Such a system guides you regarding the growth of your firm.