What Are the Best POS Systems for Small Businesses?

  • By Matthew Davis
  • Jun 18, 2024
  • Establishing Your Business

For a new business owner, selecting a point-of-sale system is one of the most critical decisions you will face.

Sure, a POS might seem like a glorified cash register. But the best POS systems for small businesses can be the backbone of your operation and significantly improve your bottom line.

The right system can speed up transactions at the point of sale, and so much more. The best POS systems manage inventory data, streamline accounting, or track employee hours. They can automatically reorder stock or eliminate the need for a third-party card processor.

At the end of the day, the right fit is important. The best POS systems make your life easier and your business stronger. The wrong POS system… a costly, time-consuming error.

So which POS system is best for you? Keep reading for advice on choosing the best small business POS systems:

  • Do you even need a POS system?
  • Small business POS use cases
  • Costs & must-have features
  • Top POS systems by small business type

After reading, you’ll have all the information you need to choose the best POS system for your business.

Does Your Small Business Need a POS System?

Simply put, a POS system digitally manages transactions in a retail or restaurant environment. It’s like a cash register, but all the manual bookkeeping gets automated.

No need to reconcile daily sales with inventory or accounting. A POS records your transactions, money taken, products sold, and then automatically updates your inventory, accounting, and transaction data.

Commonly, small businesses need to upgrade to a POS system if the business is growing, to be more efficient, or you want to accept new types of payment (like credit cards payment processing or contactless payments).

Here’s a small business example without a POS system:

A small business with no POS just received 250 new items. They count in the order and manually update their inventory data. Without barcode scanning, employees must individually price-tag items. Then, once individual items sell, the business must conduct a time-consuming cycle count for up-to-date stock information.

In this case, a POS system would save time and improve performance.

You Might Need a POS System If…

Here are the most common reasons small businesses upgrade to a POS system:

1. Business Growth – You’ll eventually outgrow a manual cash register. A POS system can scale with your business, so you won’t have to worry about upgrading again anytime soon.

2. Improve Efficiency – A POS system automates many tasks, like calculating taxes or managing inventory. This can free up your employees’ time to focus on customer service and other tasks.

3. Better Stock Control – A POS system tracks inventory in real time, so you can see what’s selling and what’s not. This can help you avoid stockouts and overstocking, which both hurt your bottom line. You will need this if you starting selling online too.

4. Data-Driven Decisions – Access POS analytics for detailed reports to understand which items are selling well, what your busiest times of day are, and which customers are spending the most money. This information can help you make better business decisions.

Pro Tip. Start with the problem you’re trying to solve. What specific tasks or pain points do you want the POS system to address? This will help you find the best system for your business.

How POS Systems Help Small Businesses: Use Cases

A POS system can help small businesses streamline operations, improve efficiency, and gain valuable insights.

Some industry statistics suggest a POS improves transaction speed by 30% and can reduce manual transaction errors from 4% to 0.5%. Additionally, a POS can improve inventory accuracy by 25%.

Some of the most common ways a POS improve small business operations include:

1. Streamlined Sales and Checkout: POS systems replace clunky cash registers with user-friendly interfaces, allowing for faster transactions and shorter lines.

2. Inventory Management: Track stock levels in real-time, generate automatic purchase orders when inventory dips low, and avoid stockouts.

3. Customer Relationship Management (CRM): Store customer information, purchase history, and preferences to personalize the shopping experience and offer targeted promotions.

4. Detailed Sales Reporting: Gain insights into sales trends, identify top-selling items, and analyze customer behavior to make data-driven decisions. Create a daily sales report in just seconds.

5. Employee Management: Manage employee schedules, track hours worked, and assign permission levels for secure access.

6. Multiple Payment Options: Accept various payment methods like cash, credit cards, debit cards, and contactless payments for customer convenience. Small businesses can use POS-integrated payment processing or a third-party processor.

7. Table Management (for Restaurants): Seat customers, split bills, and track orders efficiently (useful for restaurants to optimize table usage and improve customer experience).

8. Age Verification: POS systems can help with age verification for alcohol or tobacco sales. This is common in the top pos systems for vape shops and liquor stores.

Bottom line, implementing a POS system provides a compelling ROI for small businesses.

Important Considerations: Costs & Features

OK, if you’ve determined you need a small business POS system, next, consider 1) start-up and long-term costs and 2) features.

Ultimately, you don’t want to pay for POS features you won’t use. And you don’t want to break the bank on expensive POS hardware, if a streamlined system will work.

I. Cost Breakdown for POS Software

Upfront Costs

To purchase a POS, you will need to cover these costs:

  • Software: Can be a one-time purchase, monthly subscription, or per-transaction fee. FTx POS off cloud POS softwareers subscriptions starting at $89 / month.
  • Hardware: This includes essentials like a card reader, receipt printer, and a tablet/computer to run the software. You can buy or rent hardware depending on the system.
  • Setup fees: Some vendors may charge a fee to get your system up and running, including data migration or training.

According to Bankrate, the average first-year costs range from $1200 to $6500 for a POS system for small businesses.

Monthly Fees

Generally, most cloud-based POS software is billed monthly to access and use. These fees include:

  • Software subscription: This is a recurring fee for using the software, often tiered based on features or number of registers. Our retail POS software plans start at $89.
  • Payment processing fees: These are the fees charged by your payment processor for each transaction. Note: You’ll either pay this to your POS company (if using integrated credit card processing ) or a third-party processor.
  • Chargeback fees: These are fees charged by your payment processor if a customer disputes a transaction.

II. What Small Business POS Features Do You Need?

There are some must-have features, and others you should only pay for, if you plan to use them.

At a minimum, a small business POS system must have:

  • Transaction processing: Process sales, refunds, gift card sales, and voids. You might also need a POS with mobile payments or online payments.
  • Inventory management: Track stock levels, set reorder points, and manage product information.
  • Basic reporting: Generate reports on sales, inventory, and taxes.
  • On-call support: Ability to connect with helpdesk to troubleshoot and resolve problems quickly. Very important for small businesses that often don’t have in-house IT.

Depending on your industry, the POS features you need will change. For a small restaurant, a POS with order ingesting and table management would be must-have features.

Advanced Features

As your small business grows, you need a POS that can grow with you. Therefore, as you research options, consider these advanced features (which are typically pay-to-use):

  • CRM tools: With a POS CRM tool, you can store customer details, purchase history, and preferences.
  • Loyalty programs: Reward repeat customers and encourage them to return with a loyalty POS add-on.
  • Appointment scheduling: Manage appointments for service-based businesses.
  • Mobile processing: Process transactions from anywhere using a smartphone or tablet.
  • Split checks: Ability to split checks with multiple payment types, a must-have for restaurants.
  • Integrations: Connect your POS with other business tools like QuickBooks accounting software or marketing platforms.
  • Ecommerce: Increasing necessary, the POS system should integrate with your website for easier inventory management and payment processing.

Bottom line: Make a list of features your business can’t do without. As you research top POS systems, look for these features, which plans they’re available with, and request a POS demo.

Best Retail POS Systems for Retail vs Restaurants

While both share core functionalities, POS systems cater to specific industry needs. You need a POS system that’s the right fit for your business.

Here’s a breakdown:

I. Retail POS Systems

If you operate in the retail industry, you need a POS that:

  • Focuses on inventory management, barcode scanning, and sales processing.
  • Offers features like age verification and gift card functionality.

Top Picks

FTx POS is the best point of sale system for retail small businesses. First, we’re a small business ourselves, and we’ve field-tested our POS system in our chain of 60+ retail stores, owned by our parent company.

Plus, FTx POS excels at multi-store and high-volume retail (like convenience stores, smoke shops, and liquor stores). Our core retail POS features include:

  • Inventory management with reorder automation – Set a reorder point and FTx POS will automatically create a purchase order. See our buyer’s guide for small business inventory software.
  • Integrated age verification – Scan IDs at the register or use advanced tools for ecommerce ID checks.
  • Integrated payment processing – Use FTx Pay for card processing. Best rates guaranteed!
  • Customer management – User-friendly tools to help you collect data at the point of sale.

Other alternatives include Lightspeed, Clover and Shopify. However, these are large software companies. We provide 24/7 support that you can get on the phone – very important for small businesses that need issues resolved quickly.

II. Restaurant POS Systems

Some of the most important features for restaurant industry small businesses include:

  • Table management, split checks, and kitchen display systems to streamline order flow.
  • May offer menu management tools and online ordering capabilities.

Top Picks

Some of the best pos systems for restaurants include Toast and TouchBistro. TouchBistro for example, bills itself as an all-in-one restaurant management system, while Toast is great for iPad and order management.

What Do You Do Next? Tips Before You Buy

If you want to choose the right system, follow these tips:

I. Research and Shortlist Options

Ask colleagues for suggestions and recommendations. You want to know the POS system they use and why they use it.

You can also:

  • Read reviews
  • Look for software comparisons (websites like Capterra offer insights)
  • Watch POS demos

II. Before You Make a Decision

With your shortlist, request live demos. Some of the best steps you can take include:

  • Free trials or demos. This is the best way to get a hands-on feel for the software and see if it’s a good fit for your business.
  • Get quotes from multiple vendors. This will help you compare pricing and ensure you’re getting the best deal.
  • Go with your gut. After your research and trials, you should have a good sense of which POS system is the best fit for your small business.

Want to learn more about FTx POS? Contact us today for a demo or to learn more about our advanced retail POS features.

FAQs

Cloud-based systems are accessed through the internet, while on-premise systems are installed on your local hardware. Cloud-based systems are generally more affordable and easier to maintain, while on-premise systems offer more control over your data.

FTx POS, Square, Shopify POS, Clover, Lightspeed, and Toast (for restaurants) are some popular options.

POS systems can be a business hub, offering features like inventory management, customer relationship management (CRM) tools for tracking purchases and preferences, and even employee scheduling.

Absolutely! While general features exist, POS systems can cater to specific industries. Restaurants might need features for table management and order splitting, while a clothing store might prioritize features for tracking variations in size and color.

Costs can vary depending on features, scalability, and payment models (subscription vs. one-time purchase). Be sure to factor in hardware costs like tablets or scanners, along with the software itself.

A user-friendly interface is key. Look for a system with clear menus, intuitive navigation, and training resources to get your team up to speed quickly.

Integration can save you time and streamline operations. Look for a POS system that can connect with your accounting software, email marketing platform, or inventory management system.

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Business Experts & Contributors

A New Solution Coming To FasTrax

Danielle is a content writer at FTx POS. She specializes in writing about all-in-one, cutting-edge POS and business solutions that can help companies stand out. In addition to her passions for reading and writing, she also enjoys crafts and watching documentaries.

Danielle Dixon

Content Writer
A New Solution Coming To FasTrax

Matthew Davis is a content marketing specialist for FTx POS. With experience in marketing, brick-and-mortar retail, and ecommerce, Matthew enjoys writing about strategies and technology retailers can use to grow. Previously, he managed retail operations for a sports/entertainment facility and worked in marketing consulting.

Matthew Davis

SEO Specialist/Content Writer

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