Objectives of a POS System

by Sandra Johnson; Updated September 26, 2017
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A point-of-sale (POS) system provides businesses with the ability to computerize, systematize and correlate retail information. Where cash registers, including complex register systems, have limited information collection capacity, POS systems can gather, store and return detailed reports on inventory trends and customer information. Additionally, POS systems more easily integrate with numerous sales and ordering systems, including mail or online ordering systems used in conjunction with in-person sales.

Inventory Management

One of the objectives of a POS system is inventory management. POS systems use bar code identification in receiving, tracking and selling inventory items. Rather than expending labor hours to monitor stock levels, determine when to reorder low stock items or to record the sale of specific items, the POS system can automate much of the processes involved in monitoring and managing inventory. A POS system can also monitor the cost of goods sold, purchase price, sale price and profit margins, allowing users to pull reports and determine when to adjust customer pricing.

Customer Data

Depending on the scope of a POS system's software and information input capacities, retailers can use a POS system to gather information on current customers. By using customer identification variables such as a phone number, retailers can customize the buying experience for customers. Keeping a credit card on file, for example, offers customers ease of ordering and encourages repeat business.

Accounting Automation

Another objective of a POS system is to simplify the accounting and record-keeping tasks involved in business. Sales are automatically calculated to determine sales and use tax owed, gross receipts accumulated and even expenses like payouts to vendors for inventory. When incorporated into a computerized accounting system, a POS system can manage sales, collect taxes, record transactions, clear credit cards and track bank deposits from various credit card processing vendors.

Overall Objectives

In short, POS systems seek to automate as much of a retailer's financial processes as possible. By increasing information reporting accuracy, retailers gain smoother operations and better information on which to make crucial business decisions. By reducing the labor hours required to gather such information, retailers can reduce the cost associated with record keeping and information collection. Likewise, costs are further reduced because retailers have more current information on buying trends and inventory levels, as well as increased accuracy in regard to the prices charged to customers.

About the Author

Sandra Johnson is a freelance writer, ghostwriting for private clients since 2006, and writing for print and online publications such as Sashay Magazine. She has studied with both Kaplan and Colorado Technical universities for bachelor's degrees in both human resources and accounting. In addition to writing, Johnson also operates a small family farm in rural Georgia.

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