Whether you’re a small business just starting out or an established business looking to optimize operations, the point-of-sale (POS) system you use can have far-reaching implications for your customer experience.
A POS system determines which payment methods you accept and helps ensure a smooth process for each sale. Examples of POS systems include some modern cash registers, self-payment kiosks, and mobile POS solutions.
While POS systems are essential tools for the checkout process, they should go beyond simply handling checkout alone – seamlessly covering critical backend steps like inventory management, shipping, and tax.
Inventory Management
Managing inventory is essential for small businesses, especially in an omnichannel environment. From tracking stock levels to managing orders in real-time across channels, your POS system should give you full insight across your business’s inventory. Luckily, many modern POS systems go beyond transaction processing functions to provide advanced capabilities like inventory management.
With tools like real-time inventory tracking and demand forecasting, businesses can optimize inventory levels to minimize waste and reduce carrying costs, while also ensuring that they always have the products their customers want in stock. More advanced POS systems even allow retailers to integrate with their distributors to streamline and automate replenishment, saving time and helping ensure their store is properly stocked for their customers all the time, while not overstocking and wasting money.
Moreover, businesses need to ensure their POS systems have offline capabilities. In the event of a lag in service or internet outage, POS systems with offline modes allow businesses to manage existing inventory and accept transactions even while not connected to the internet.
Shipping
Though the pandemic shifted much of commerce to an online experience, many consumers still enjoy visiting brick-and-mortar stores to try on clothes or smell the scent of a candle they’re interested in purchasing. Because of this, it’s in a retailer’s best interest to keep a wide variety of products in stock. These days, the majority of sales are starting online, even when they end in the store, with buy online, pick up in store (BOPIS), same day delivery, or simply browsing available in-store stock online, before actually coming into the store to make the purchase. But at the same time, most consumers understand that browsing a store’s shelves can’t fully replicate an online experience.
As a result, shoppers are taking advantage of the ability to place an online order directly from a brick-and-mortar store. This can be done through a sales associate or from the shopper’s mobile device, but either way, the experience should be quick and seamless. In-store sales systems should quickly identify and access shipping and billing information for repeat customers. Mobile sites should have a similar feel to the in-store experience, and should be easy to navigate, and integrate with existing sales systems.
Tax
While many businesses know that a POS system is key to processing sales, they also help in managing the complex requirements of sales tax, so small businesses should take a close look at how their POS system manages tax requirements. Tax rates and rules vary by jurisdiction, which creates complexity for businesses that sell across channels and into multiple jurisdictions. To make matters more confusing, there are more than 13,000 sales and use tax jurisdictions to keep track of in the U.S. alone.
Your POS system should have integrations with automated tax solutions that can automatically update rates and rules for every product at checkout, while also making it possible to streamline other tax requirements, like tax return preparation and filing. Updating POS systems manually to keep sales tax information current is a burden for brick-and-mortar businesses., and manual POS processes can also expose your business to excessive time loss, outdated rates that can put you at risk of under- or over-collecting tax, and system downtime that can result in unhappy customers and costs absorbed by your business.
It can also be useful to integrate a solution with your existing POS system that automatically sends your sales tax to a secure holding account and pays the state automatically when your sales taxes are due.
POS systems should be enablers for small businesses — not something that stands in the way of potential growth. By focusing on critical backend steps like inventory management, shipping, and tax, businesses can leverage them for a better experience for all. In today’s retail market, the point of sale should help the retailer save time and sell more; not just process sales and track inventory.
Cory Evans is the General Manager of Intelligent Content Management at Avalara. Michele Salerno is the Director of Marketing at Celerant Technology.
POS stock image by David Tadevosian/Shutterstock
