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A Point of Sale (POS) system is an integrated software and hardware solution for both big and small businesses to manage sales. POS systems take the place of conventional cash registers by handling transactions, plus POS systems can:
A POS system is made up of 2 main parts—first, there's the hardware, including a printer, cash drawer, and a POS terminal. Then there's the software, which is the computer program that operates the whole system. A POS system works by connecting your credit card processing apps, accounting apps, inventory apps, and other point of sale-related business apps into a single unit.
There are 4 main types of POS software:
This software is cloud-based and comes as an app on your smartphone or tablet. It’s usually compatible with a receipt printer and a credit card swiper, but not as powerful as a full terminal POS system. It’s ideal for sole traders such as plumbers or mobile food cart owners.
The tablet version is similar to mobile POS software, but offers more features and capabilities. You could use tablet POS software to manage a large and complex retail organization, including inventory tracking, employee time tracking, payroll, and accounting. They are compatible with many POS hardware solutions to form a complete POS system for any situation.
This is a fixed POS software with full back-office capabilities. It can be cloud-based or on-premise. Terminal POS software is best suited to large retail stores, spas, malls, and other brick and mortar big or small businesses.
This is designed to be used in kiosks and outdoor units where it's not practical to post an employee. It is often integrated with another POS system nearby, like to provide an extra sales point in a busy grocery store. It can be cloud-based or on-premise since it's not used with a mobile system.
You’ll also find POS software designed for the unique needs of specific industries, such as restaurant and hospitality businesses, apparel retail, financial services, academia and education, and pharmaceuticals POS software.
The costs of your POS software will vary depending on the type of software you choose. Mobile POS software such as a smartphone app can begin as cheap as $50 per month, while more complex software can reach several hundred dollars monthly. When you buy POS software, you’ll usually need to pay an upfront purchase price, plus an ongoing monthly or yearly payment processing fee.
Other factors that may affect the cost of your POS software include:
POS hardware is the indispensable other half of your POS system. You’ll need to get the right hardware to match the actions and transactions you want to carry out using your POS system. A basic set of POS hardware consists of:
Depending on your business, you might also need:
With a POS system, your business can retain more customers through a better, targeted loyalty program and you can also track inventory so that you never run out of stock unexpectedly. A POS system can help you run complex discount offers when appropriate.
With the right POS system, you can also analyze sales history to discover seasonal buying trends and correlations, which can come in useful when you want to increase sales. You can also remove manual error by using barcode scanners and automatic synchronization, as well as combat absenteeism with a more reliable employee tracking system.
Other major benefits include improving payment security as well as the ability to make more sales thanks to your ability to accept more types of payment.
A cloud-based POS system stores data on remote servers and can be accessed online, whereas a traditional or on-premise POS system stores data on a local server and can be accessed through an internal network. Here’s a breakdown of the main differences between a cloud-based POS and an on-premise POS:
If you have long-term business plans and if your requirements are likely to continue to evolve as your business grows, then a cloud-based POS system is probably the best choice for you. On the other hand, if you have fixed needs or a small budget, you might be best served by choosing a traditional POS system.
Asking yourself these questions will help you choose the right POS system provider:
Lightspeed is a unified point-of-sale and payments platform used by top businesses in 168,000 locations worldwide. It offers fast workflows and a full suite of integrations, giving you one touchpoint for all your business needs. From multichannel and multi-location management to inventory control, integrated payments, and real-time reporting, Lightspeed has you covered.
Whether you run a retail store, restaurant, or golf course, Lightspeed has specialized solutions for your needs. You can manage takeout and delivery for restaurants, set up in-store loyalty programs for retail, or even manage tee sheets golf courses.
Lightspeed’s hardware is available in kits with everything from receipt printers and cash drawers to USB scanners. It can also be bought as individual items, mobile tap units, or servers that keep your system running even if you don’t have an internet connection.
Why we chose Lightspeed: Lightspeed's "Order Anywhere" feature reduces wait times and diversifies revenue streams with simple, contactless payments via QR codes. Guests can order from their phones, split bills, and pay with just a few taps. Plus, Lightspeed's unified platform sends all transaction data to your POS in real time.
Our experience: We tested out Lightspeed’s Mobile Scanner app, which turns an Android device into a powerful inventory management tool. It proved quite useful and could count products, track inventory, and fulfill orders. The software is ideal if you don’t want to buy additional devices.
Installation: Free one-on-one onboarding
Contract length: Customizable as a fixed or rolling term contract
Integrations: 22 across several categories
Toast is an Android-based POS system designed specifically for the restaurant industry. It lets you manage everything from front to back of house, multi-store locations, inventory management, and even payroll.
For your front-of-house, Toast offers the Go 2, a handheld device for taking payments at the table, updating menus, sending digital receipts, and splitting checks. It also has a self-service kiosk where customers can place orders, choose add-ons, and leave tips.
In the kitchen, its display system syncs with the front-end devices to show incoming orders. Your staff can mark orders as done with a double tap, and the system can text customers when their food is ready. It even tracks how quickly each station is preparing dishes.
Why we chose Toast: We appreciated Toast's sleek, commercial-grade Android devices that blend with any decor. These spill-proof terminals can handle kitchen accidents and use a hardwired connection for reliable offline mode. This ensures you can always process contactless, swipe, dip, and tap payments. If you'd like a closer look, you can schedule a tour to see Toast's features in action.
Our experience: We set up a dummy account to test the Toast TakeOut mobile ordering app and were impressed. Customizing the storefront profile was a breeze, and updating menus and specials was straightforward. We easily added curbside pickup options and experimented with push notification orders. The app's commission-free model and access to thousands of potential customers were definite highlights.
Installation: Free installation with the first terminal
Contract length: One year
Integrations: 200+ integrations with restaurant partners
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