For many decades traditional cash registers have served us well by helping businesses calculate transactions and register sales. Many years have passed since the invention of the cash register and the technological advances have been exponential, especially in recent years. The latest Point-of-sale (POS) systems offer all the functionality of a cash register, with the added benefits of many other modern tools that can help streamline operations and keep your business organized.
But do you really need to upgrade your cash register to a POS system? The answer ultimately depends on the operational needs of your business. This guide will help you understand the benefits of POS systems so that you can decide for yourself if it’s the right solution for your business.
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Cash registers first appeared in 1861 and began to replace traditional cash boxes or cash drawers. The initial goal was to reduce employee theft by making sure each sale was recorded mechanically before the cash drawer would open to allow the clerk to make change. Managers could hear the ding of the machine when the drawer opened, which created a layer of awareness and security
Over time, the records generated by a cash register began to help keep businesses honest about reporting sales tax. As technology evolved, new features were developed to streamline business practice and automate record keeping. Soon, registers could create itemized receipts, and eventually, electronic registers were introduced to automate addition and tax calculations.
With the exponential increase in computing power in recent decades, the simple till has evolved into a modern device called a point-of-sale system. Point-of-sale systems harness modern technology to offer a number of services beyond taking payments and tracking sales, including inventory, human resources and customer relationship management, loyalty programs, gift cards, and much more.
At first glance, cash registers might seem outdated, but depending on your business structure and goals, something as simple as a cash register might be sufficient.
What do cash registers do best? If you’re imagining the cash box you used at a school bake sale, you may not be realizing how much a proper register can actually accomplish. A cash register can do all of the following:
Is a cash register the best choice for your business? Here are a few things to consider.
Do you only have one location for payments? If you have multiple store locations, or multiple counters within one store, a cash register might not be the optimal tool. You’ll need to reconcile and total sales across your various registers manually for proper accounting. However, if you have only one location with a single register for payments, these issues won’t provide a challenge or roadblock for you.
Does your business have limited inventory? If you run a retail establishment and offer hundreds or thousands of items, they may be difficult to track with a traditional cash register. However, if you offer only up to a few dozen items, a cash register can easily be used to track sales.
Is your business primarily conducted in cash or checks? Traditional cash registers process cash and checks. If you want to accept credit or debit card payments, you will need to set up a payments processing system and an accompanying merchant account.
In brief, the best use cases for cash registers are single-location businesses with limited inventory and without the need to take credit or debit card payments.
If you are looking for high-level payment processing for your business, you might be amazed to know how much a modern point-of-sale system can do. And as with any other kind of computerized device, there are a lot of different options out there. We’ll give you the basics here; for more detailed information on POS systems, see our What is a POS system? guide.
POS systems come in two basic categories. On-premises POS systems bridge the gap between traditional cash registers and modern POS devices. They usually feature custom software to help your business run smoothly, and store all data on a hard drive at your location. While most on-premises POS systems can take credit cards with ease, businesses have to take great care with the data collected to ensure privacy and security for their customers.
Cloud POS systems function differently. Instead of storing data on a hard drive located in your store, all information is stored off site, connects to your terminals via the internet, and is managed by your POS provider. Be sure to check the security specifications of any POS you are considering; cloud POS systems should encrypt all customer and credit card data. If you aren’t familiar with Payment Card Industry (PCI) compliance regulations, take a few minutes to familiarize yourself with it. It should help demystify issues of liability and data security. It’s important to understand what level of security each system offers, along with your specific requirements and liabilities.
If you go with a cloud POS system like Clover, you’ll also have access to the Clover App Market. There, you’ll find hundreds of apps that can help you run your business better: set up loyalty programs, coordinate with delivery drivers, handle scheduling with your staff, and much more. Additionally, since the software is cloud based, you’ll have easy access to updates. As new features and functionalities become available, cloud POS systems are usually the first to roll them out. Instead of having to purchase new hardware or software, you can update your system with just a few clicks. Often, critical updates are made automatically by the POS company, freeing you from the burden of maintaining your core system software.
Is a POS system the best choice for your business? Here are a few things to consider.
Do you take, or are you looking to take, credit card or debit card payments? Most POS systems have integrated credit and debit card payment functionality. And depending on your selection, many POS systems take the lion’s share of the responsibility for your data security
Do you want access to software to streamline your business practice? If your business has intricate staffing needs, a desire to appeal to loyal customers with rewards, or the need for marketing campaigns, you may be best served with access to customizable apps through a modern POS. Think about the kinds of tasks you perform to keep your business running smoothly, and explore what options each POS has to address your needs.
Do you want to be prepared for change and growth over time? It’s always challenging to predict the growth of a business. If you are working to expand and grow, it’s important to select a system that can grow with you. Think you might need two payment terminals? Considering a second location? Cloud POS systems aggregate and sync data across all of your terminals instantly. That means that as you grow—whether in terms of locations, devices, or both—your financial information, reports, and processing will always be as easy to access as your initial setup.
The best use cases for POS systems are businesses that want to process credit or debit card transactions, make their operations more productive and efficient, and grow and expand in the future.
As you decide between a cash register and a POS system, think through how you manage your business, what your long-term goals are, and weigh that against the nature of your products and services, as well as the kind of customer relationships you want to establish and maintain. Ask questions like:
If you answered “no” to all of these questions, a cash register will likely suffice. It’s inexpensive and consistent, tends to have a longer lifespan, and can deliver on basic functionality in a reliable manner. If, on the other hand, you answered “yes” to any of the above questions, you might want to consider the various POS systems available. With advances in cloud technology, modern POS systems can take a lot of the stress out of running your business.
We hope that you’ve found the information in this guide useful. These guides are part of our effort to provide valuable resources for businesses across all industries. Be sure to stay up to date on PCI regulations, and the responsibilities and risks to consider when processing debit and credit transactions.
To learn how Clover can help you gain insights into your business operations, schedule a free consultation with a Clover Specialist today.
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