What Are the Best POS Systems for Small Businesses?

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:

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, and 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 if they want to accept new types of payment (like credit card payments 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 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 are starting to sell online too.

4. Data-Driven Decisions – Access detailed point-of-sale analytic 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.

5. Multi-Payment Options – Today’s customers expect flexibility at checkout. Whether it’s cash, credit, debit, contactless payments, or mobile wallets, a modern POS system lets you accept all forms with ease.

6. Customer Management & Loyalty Programs – A good POS system doesn’t just process payments; it helps you build relationships. With built-in customer profiles and loyalty program integrations, you can track purchase history, reward frequent shoppers, and send personalized offers that keep people coming back.

7. Accurate Reporting – Manual sales tracking leaves plenty of room for mistakes. POS software automates reporting so you can get real-time insights on sales, inventory, and performance at a glance. You’ll know which products drive the most revenue, which staff members are top performers, and where to tighten up operations.

8. Reduce Human Errors – Cash registers rely on manual entries, and mistakes are inevitable. A POS system minimizes those errors by automatically calculating totals, taxes, and discounts. The result? Cleaner books, fewer discrepancies, and smoother end-of-day reconciliations.

9. Compliance and Security – Handling customer data and payments means you’re also responsible for protecting them. A reliable POS system offers encrypted transactions, PCI compliance, and user-level permissions to safeguard sensitive information.

What Challenges Do Small Businesses Face with POS Systems?

For small businesses, a POS system can feel like a lifeline until it isn’t. The right system helps streamline operations, but the wrong one can quietly drain time, money, and patience.

Let’s break down the common pain points most small business owners encounter and how to navigate them smarter.

1. High Upfront Costs and Hidden Fees

The sticker price rarely tells the full story. Between hardware, setup, software licensing, and monthly subscriptions, costs can add up fast. Then come the less-visible fees. Payment processing charges, maintenance plans, or update costs. For small business owners working within tight margins, these hidden expenses can eat into profits before the first sale is even processed. Choosing a transparent POS provider with clear pricing terms can save you from unexpected financial headaches.

2. Staff Training and Adoption Issues

No matter how advanced a POS system is, it’s only as good as the people using it. Many small business owners underestimate the learning curve. If the interface isn’t intuitive or the workflows feel odd, employees struggle, especially part-time or seasonal staff. This leads to errors at checkout and slower service. The fix? Look for systems that focus on simplicity and provide built-in training tools, so your team can learn fast and work confidently.

3. Complex Setup

Getting a POS up and running should be simple, but for many small businesses, it turns into a technical marathon. From hardware pairing and software configuration to syncing inventory and payment gateways, setup challenges often require external support. Not every business has an in-house IT team to lean on. The key is finding a POS solution that offers guided setup, plug-and-play hardware, and real-time onboarding support.

4. System Downtime & Internet Dependency

Few things are more stressful than a “POS system down” moment during a rush. Many modern systems rely heavily on internet connectivity, which means a single network glitch can halt sales entirely. Having offline transaction capabilities or a built-in failover option keeps your business running even when Wi-Fi doesn’t cooperate. Small businesses can’t afford downtime, and neither should their POS.

5. Scalability Issues

What works for a small shop today may not fit tomorrow. Many POS systems designed for small businesses don’t scale easily when growth happens, whether that means adding more registers, locations, or online channels. Investing in a POS system that can expand with your business prevents the need for costly migrations down the line.

6. Integration Challenges

Modern businesses rely on multiple tools, from accounting platforms to CRMs and ecommerce systems. The problem? Not all POS systems play nicely with others. When data can’t flow between platforms, it creates extra manual work and room for error. Choosing a POS with strong integration capabilities (especially for accounting, loyalty, and ecommerce) helps maintain a connected, efficient workflow.

7. Security Vulnerabilities

Cybersecurity isn’t a big business concern. Small businesses are frequent targets for attacks, especially when POS systems aren’t properly secured. Outdated software, weak passwords, or unencrypted data transmissions can put customer information at risk. A reliable POS system should include built-in encryption, secure user permissions, and regular security updates to protect your data and your reputation.

8. Hardware Reliability Issues

From card readers that disconnect mid-transaction to receipt printers that jam at the worst possible time, hardware reliability can make or break your checkout experience. Small businesses often use outdated or budget hardware to save costs, but this usually backfires. Investing in durable, commercial-grade devices ensures smoother operations and fewer interruptions during busy hours.

9. Customer Support Limitations

When something goes wrong, time is money, and waiting on a support ticket isn’t an option. Many small business owners struggle with delayed responses from low-cost POS providers. Opting for a provider that offers live, 24/7 support or dedicated account managers can make all the difference. You want a team that understands your business, not just your software.

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 speed of transactions by 30% and can reduce manual transaction errors from 4% to 0.5%. Additionally, according to a LinkedIn article, a POS can improve inventory accuracy by 25%.

Some of the most common ways a POS improves 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, weekly, or monthly sales report in seconds.

Learn How To Create Custom Reports In FTx POS System For Faster Analysis!

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 our integrated payment solutions or a third-party processor.

7. Age Verification: POS systems can assist with age verification for alcohol or tobacco sales, a feature commonly found in leading POS systems for age- restricted products.

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

POS Software Types: Find the Perfect Fit

The world of POS systems is diverse, offering solutions tailored to various business models and requirements. Understanding the different types is the first step towards making an informed decision.

1. Cloud-Based POS Systems

Cloud-based POS systems have revolutionized how businesses manage their sales and operations. These systems store data on remote servers, accessible via the internet.

Key Features and Benefits:

• Accessibility: Access your data and manage your business from anywhere with an internet connection.
• Automatic Updates: Software updates are typically handled by the provider, ensuring you always have the latest features and security patches.
• Scalability: Easily scale your system as your business grows without investing in expensive hardware.
• Real-Time Reporting: Gain instant insights into sales, inventory, and customer data.
• Lower Upfront Costs: Often subscription-based, reducing the initial investment compared to on-premise systems.
• Integration: Cloud POS systems are designed to integrate with other cloud-based services like online accounting and ecommerce platforms.

Considerations:

• Internet Dependency: Relies on a stable internet connection.
• Recurring Costs: Subscription fees can add up over time.
• Data Security: Ensure the provider has robust security measures.

2. On-Premise POS Systems

On-premise POS systems store data locally on your business’s servers.

Key Features and Benefits:

• Data Control: Complete control over your data and its security.
• Offline Functionality: Can operate without an internet connection.
• Customization: Often allows for greater customization to specific business needs.

Considerations:

• Higher Upfront Costs: Requires purchasing hardware and software licenses.
• Maintenance: Responsible for hardware and software maintenance and updates.
• Limited Accessibility: Data is typically accessible only from the local network.
• Scaling Difficulty: Scaling requires additional local hardware.

3. Mobile POS Systems

Mobile POS (mPOS) systems utilize smartphones or tablets to process transactions.

Key Features and Benefits:

• Portability: Ideal for businesses that operate in various locations, such as food trucks or pop-up shops.
• Flexibility: Process transactions anywhere, anytime.
• Lower Costs: Often requires minimal hardware investment.
• Faster Transactions: Can reduce wait times and improve customer experience.

Considerations:

• Limited Functionality: May have fewer features than traditional POS systems.
• Battery Life: Dependent on device battery life.
• Peripheral limitations: Less connection options for peripherals like printers.
• Security: Ensure secure mobile connections.

4. Tablet POS Systems

Tablet POS systems use tablets as the primary interface for processing transactions.

Key Features and Benefits:

• User-Friendly Interface: Intuitive and easy to use.
• Versatility: Can be used for various tasks, such as order taking, inventory management, and customer relationship management.
• Cost-Effective: Often more affordable than traditional POS systems.
• Modern Appearance: Creates a modern and tech-savvy image.

Considerations:

• Hardware Dependency: Relies on the tablet’s capabilities.
• Peripheral Connections: Needs proper docking stations or connection hubs for peripherals.
• Software Limitations: Tablet OS limitations.

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 works.

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. With FTx POS, you can get a point-of-sale system starting at $0!
• 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.
• 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 the 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, essential POS features include order ingesting and table management.

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.
• Mobile processing: Process transactions from anywhere using a smartphone or tablet.
• Integrations: Connect your POS with other business tools like QuickBooks accounting software or marketing platforms.
• Ecommerce: Increasingly 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 and look for these features, which plans they’re available with, and request a POS demo.

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 ultimate point-of-sale solution designed for small retail businesses in mind. What sets us apart? We’re a small business too, 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 Card Payments for card processing. Best rates guaranteed!

Other alternatives include Lightspeed, Clover, and Shopify. However,

they are large, generalized software platforms. FTx POS stands out by offering 24/7 phone support, a fully integrated suite of retail tools, and an intuitive interface that makes running your business simpler and more efficient.

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

POS systems like Toast and TouchBistro are popular choices among restaurants. But if you’re looking for something built with small businesses in mind, FTx POS for a restuarant is worth a closer look. It combines payment processing, menu and inventory management, and customer loyalty tools in one easy-to-use platform. Plus, with 24/7 support, you’ll always have someone to call when you need help.

How to Choose the Best POS System for Your Small Business

Selecting the right POS system is crucial for your business’s success. Here’s a step-by-step guide to help you make an informed decision:

1. Assess Your Business Needs:

• Identify your specific requirements, such as inventory management, CRM, or online ordering.
• Consider your business size, industry, and growth plans.
• What type of sales volume do you expect? Are there any industry-specific needs that must be addressed? (Restaurant, retail, etc.)

2. Determine Your Budget:

• Set a budget for your POS system, including hardware, software, and ongoing fees.
• Compare the costs of different POS systems, considering both upfront and recurring expenses.
• Factor in potential costs for training, setup, and future upgrades.

3. Evaluate Key Features:

• Prioritize the features that are most important to your business, such as: inventory management, sales reporting, customer management, payment processing, employee management, and integration with other software.
• Consider future needs and potential features that could become important as your business evolves.
• Make a list of “must-haves” versus “nice-to-have” features to streamline your decision-making.

4. Consider Ease of Use:

• Choose a POS system that is user-friendly and easy to learn for both you and your employees.
• Look for systems with intuitive interfaces, clear navigation, and customizable dashboards.
• Ensure the system offers comprehensive training resources, such as tutorials, videos, and user manuals.

5. Check for Integration Capabilities:

• Ensure the POS system integrates seamlessly with other software you use, such as accounting software, ecommerce platforms, and CRM systems.
• Verify the system supports APIs or other integration methods for smooth data transfer.
• Consider if the POS system integrates with popular third-party apps for your niche. (Example: delivery apps for restaurants).

6. Read Reviews and Seek Recommendations:

• Research online reviews and seek recommendations from other small business owners in your industry.
• Consider reading case studies and testimonials to understand how the system has benefited other businesses.
• Check for reviews on multiple platforms to get a well-rounded view of the product.

7. Request Demos and Trials:

• Take advantage of free demos and trials to test the POS system in a real-world setting.
• Ask specific questions during the demo to clarify any doubts and ensure the system meets your needs.
• Involve your employees in the trial to get their feedback on usability and functionality.

8. Evaluate Customer Support:

• Choose a provider that offers reliable customer support and technical assistance, including phone, email, and chat support.
• Check for support availability, response times, and the quality of support resources.
• Look for providers that offer ongoing training and support to ensure you can maximize the system’s potential.

9. Consider Security:

• Ensure the POS system complies with PCI DSS standards to protect customer payment information and prevent fraud.
• Look for features such as data encryption, secure payment processing, and user access controls.
• Ask the provider about their data security policies and procedures.

10. Plan for the Future:

• Select a POS system that can scale with your business as it grows, accommodating increased sales volume and new locations.
• Consider future trends and technologies in the POS industry, such as mobile payments, contactless transactions, and AI-powered analytics.
• Evaluate the vendor’s commitment to ongoing development and updates to ensure the system remains relevant and competitive.

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.

Conclusion

The digital age waits for no one. Your customers expect seamless experiences – think lightning-fast transactions, accurate inventory, and personalized loyalty programs – and your business deserves efficiency. Don’t let your POS system be the bottleneck, struggling with clunky interfaces and outdated reports. Instead, let it be the launchpad. Discover how the right POS, with features like integrated payment processing, robust sales analytics, and streamlined customer management, can transform your operations.