As technology develops, retail businesses are also becoming more IT-driven. Records associated with retail businesses, such as sales information, are going digital with the growth of advanced software and hardware technologies. Electronic records can help to save precious resources and can be backed up, making them more reliable as data sources.
The point-of-sale systems were created to keep track of point-of-sale transactions, inventory records, customer profile management, and any other activity carried out in a store. Trusted POS systems include Shopkeep, Lightspeed, coreSTORE, and many more. These systems help businesses to improve their sales.
What is POS Transaction?
POS transactions occur when a customer makes a payment at an online store or cash counter in return for goods and services. This transaction involves a seller and a buyer and can occur in any medium depending on the type of store or business where the purchase occurs. Point of sale systems, or POS systems, utilize software and hardware to keep track of all these POS transactions on a daily, monthly, or annual basis. Other than managing and calculating cash flow, POS systems allow customer profile management, POS report generation, inventory management, predicting stock requirements, and more.
By recording and monitoring POS transactions of different products, POS systems will help sellers and retailers to keep reliable records and measure business metrics. Sellers will be able to make forecasts and come up with strategies to improve sales by looking at current demand. They’ll also be able to gauge the effectiveness of current sales strategies.
POS Transaction Types
There are two major categories of POS transaction types, online orders and offline orders.
- Online Orders
POS transactions on online stores are the first category. The store is not physically present, and the customer can look at an online catalog and order products to be delivered to them later. The POS transaction happens as the customer keys in credit card details and transfers money to the seller. If there are any issues with the item, refunds can also be returned to the customer.
- Offline Orders
POS transactions for offline orders involve a customer visiting a physical store, selecting an item, and making payment at a cash counter that has POS installed. This allows the instantaneous exchange of goods and services.
Regardless of the transaction type, the POS system records sales and purchase transactions to maintain a record of the amount of money received, products sold, date and time of purchase, and more. These aspects can be analyzed for future forecasts. A receipt will also be given to the customer so they can keep track of the purchases they made.
- POS Reconciliation
POS reconciliation involves comparing POS data sets to ensure accounting records are accurate. The amount of money in the cash counter must align with the number of sales during the specified time period. POS reconciliation removes human accounting errors, so you have an accurate picture of the inflow and outflow of cash. You’ll be able to make accurate predictions and plan for the future. Having clear records will also help you identify unauthorized transactions and reduce unnecessary cash outflow.
With a clear understanding of POS transactions, types, and reconciliation, you’ll be able to run your business smoothly.