The Advantages & Disadvantages of Point of Sale System

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POS systems are common in the retail world.
POS systems are common in the retail world. (Image: Comstock/Comstock/Getty Images)

If you run a business, you have a choice when it comes to handling sales. You can choose a traditional cash register, which keeps track of the money your business has taken in each day, or a point of sale system that provides a number of additional features as well. Each approach has its advantages and disadvantages, and it is important to consider your choices carefully.

Inventory Control

A point of sale system can be integrated into the inventory control for a company. Once that integration is in place, the system can automatically generate a purchase order and reorder items when they start to run low. That automated system can reduce the amount of work and expense associated with running the business, which can in turn boost profits and profit margins.

Product Selection

With a point of sale system, managers can run reports that show not only how many of each item were sold, but which items were the most popular. For instance, a convenience store manager could run a report showing soda sales for the previous week and then use that report to determine which flavors accounted for most of the sales. That information can be quite valuable when the time comes to restock the shelves or order new supplies. Managers can also use point of sale data to spot seasonal trends in their merchandise sales and stock their shelves to take advantage of that demand.

Required Updates

With a point of sale system, you are relying on the software that runs the network, and that software must be updated on a regular basis. If you choose to install a point of sale system, you will need to schedule those updates or allow the POS vendor to download and install them for you. Point of sale systems typically also require an ongoing maintenance fee to cover updates and changes to the system, on top of the cost of the initial setup.

Security Risks

Point of sale systems connect the registers in the store to a central network, and that connectivity comes with its own security risks. If the software is not kept up to date, or if it is updated incorrectly, security breaches can occur. Depending on the nature of the business, those security breaches could involve highly sensitive and protected information, including credit card numbers and bank account information. The theft of such personal data could put the company at legal and financial risk.

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