Whether you operate a chain of restaurants, a mom-and-pop convenience store, or a medium-sized retail shop, you are in business to make money. And, one of the most critical aspects to your profit and loss is your ability to track information… you need to know which products are making you money, what items need to be re-ordered, who your customers are, and so on. This is where today’s point of sale (POS) systems play such a valuable role.
In the not too distant past, retailers used mechanical cash registers to record sales onto a paper tape which then had to be manually transcribed into the company’s accounting ledger. Later, electronic versions of cash registers were introduced which allowed business owners to track more of the data pertaining to each transaction (for example, management was able to track all sales and refunds by each cashier). Today, cash registers have evolved into modern computer-based point of sale systems, which let you track more information than previously imaginable.
Some of the ways that a point of sale system can help you increase your profits include analyzing your product margin, tracking sales, increasing the accuracy of your pricing, and maintaining customer contact.
As a business owner, you know how important it is to keep a close watch on the margin of each product since you want to focus on selling the things that make you the greatest profit. A point of sale system can help you quickly identify your greatest money-makers and make decisions about how much of each item you want to stock. (If you have a limited storage area, it doesn’t make sense to fill it up with low-profit items).
A point of sale system also allows you to know, practically at the push of a button, how much cash you have in the till (and how much of it is profit!), the type and amount of each product sold that day, and how many items are still on the shelf. You can even set it up to automatically notify you when reaching the re-order point on any item.
With the advent of barcodes and barcode scanners, retailers now enjoy greater accuracy in the pricing of their products that ever before. If you need to increase the price of a “widget”, you simply make the change in your point of sale system and all widgets immediately reflect the new price. Plus, your cashier or sales clerk doesn’t have to guess what any product costs (which might cause you to lose money)… they just scan it and the correct price is automatically applied.
Marketing 101 tells us that an existing customer is worth a lot of money to a business owner because they are likely to buy from you again and again in the future (this is known as the “residual value”). Because of this, you should make selling to your existing customer base part of your marketing plan. A point of sale system lets you keep track of customer names, addresses, and purchase history… just imagine how you could use that information to generate more sales!
Hopefully by now it is clear that a point of sale system can help you track the information that is critical to your business success. This includes analyzing your margin, tracking each day’s sales, increasing the accuracy of your pricing, and maintaining contact with your customers. Armed with this information, you can make informed decisions and take actions that are sure to increase your profits.