POS (Point Of Sales) Recorders

POS software systems can automate several other areas of your business and are not limited to simple cash register functions.

Tina S
Tina S
Dec 16, 2009
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What is POS Software?

Electronic devices that function as both a terminal and a cash register. They are used commonly in retail stores to record sales information at the time of the sale and to perform other data processing functions.

POS software is at its simplest, a computer program that takes the place of your cash register. All sales are made through the computer. You enter the information, sales and transactions, and it records and tracks everything. But it didn't begin that way.
POS Software Basic Features There are a number of essential features you would expect your point of sale software to take care of.
These would include:
•    Display of items and their cost
•    Tax and tax calculation
•    Returns, voids and discounts
•    All payment options, including (of course) credit cards
•    Adaptable to various retail and sales situations

The History of POS Software

POS systems evolved from the mechanical cash registers of the first half of the 20th century and were operated by a crank and lever.

Manufactured by NCR and Burroughs, they recorded data on journal tapes required a few extra steps to transcribe the information into the retailer's accounting system. The next step in the evolution of the POS software that we know and love today was to move to cash registers that were operated with electricity rather than the crank and lever and were again originally manufactured by NCR.

In 1973 new computer driven registers and the bar code readers on the POS systems were introduced. In 1986, the POS systems became based on PC technology with the introduction of the IBM 4683. Also during the late 1980's, credit card devices were developed to operate independently thus making credit card processing easier and more secure.

Today, retail Point of Sale software systems are more advanced than ever. They utilize a variety of operating systems; cater to specific industries, business sizes, hardware requirements and much more.

POS software systems can automate several other areas of business and are not limited to simple cash register functions. Today's systems can enhance marketing by tracking customers and generating automated mailings, they can automate accounting functions like payroll, accounts receivable and payable, they can track inventory, control and automate price updates and much, much more.

Integrating POS & Accounting Software Systems

Interface: A point at which independent systems or diverse groups interact.

Integrated: To make into a whole by bringing all parts together; unify.

In the software world, integrated modules use the same data files and information is updated in real-time. The data is consistent across all modules, offering maximum integrity - so you save time and avoid double-entry.

Interfaced modules use software protocols to translate and transfer data between them. Software Companies usually write interfaces so they can communicate with third party programs. The interface allows to quickly sending information to the third party program so its not have to re-key the information. The drawback is that the interface needs to be triggered manually and it doesn't happen in real-time.

Most POS systems in today's market have point of sale, inventory, customers, purchasing, and accounts receivables built-in and tightly integrated into the software. All of these modules are tightly integrated for a good reason. In fact, it's critical for all of them to seamlessly share and update information.

For example, when you create an invoice you're using the "point of sale" module. When you complete an invoice, the point of sale module instantly updates your inventory quantities in the inventory database. The point of sale module also updates the customer history, accounts receivables, and sales history databases.

Without "complete integration" your inventory, accounts receivables and sales history will get out of date. Imagine how many problems that would cause. The software would be virtually useless.

On the other hand, modules like Accounts Payable and General Ledger don't have to be built-in. In fact, most POS systems offer accounts payable and general ledger as optional solutions. The only problem is that every solution works different.

For example, some POS systems will link to other accounting software packages. Some POS systems will offer built-in accounting. Some POS systems won't offer anything. And of course, every POS Company will tell that their way works the best.

Some POS systems offer more advanced links that update information in real-time, but they all work different.
Here are the different types of links:
General Ledger Only Interface - Some POS systems will only interface to the general ledger. This means you have to update your accounts payable manually, which isn't big deal, since there's not much information to post. However, it does take a little extra time and it's prone to human error.
General Ledger and Accounts Payable Interface - This allows you to send information to both modules so you save a little time and more importantly, you reduce errors. Don't forget that your accounts payable transactions flow into your general ledger. If you make a mistake in accounts payable, you're general ledger totals will be wrong.
• Batch Summary Interfaces - Most POS interfaces send batch summaries to the accounting software (instead of each transaction). This is an efficient way to send information and reduces general ledger entries.
• Line Item Detail Interfaces - Some POS interfaces will send every line item detail (transaction) to the accounting software. This can be helpful because each journal entry usually includes more information, like the customer or invoice number. Then you can quickly trace the transaction back to the POS.
• Advanced / Integrated - Some POS systems offer advanced (integrated) links to QuickBooks and other accounting packages. These advanced links update accounting information instantly (in real-time). They can also include more information, making it easier to trace information back to your POS software.
Advantages of a separate accounting package include:
• Save money - If you already have accounting software, you can save money since you don't have to pay for the "add on" POS - accounting modules.
• No re-training - If you already have accounting software, you don't have to learn another system of re-train employees.
• Better overall design - Stand alone accounting software packages are usually designed better than the packages built into POS systems. POS Companies usually devote most of their effort to the design of the POS and inventory modules, where Accounting Companies will naturally focus on the design of the accounting. This isn't always the case, but it's true in most situations.
Disadvantages of a separate accounting package include:

• Out-of-date info - Not many interfaces update information in real-time. The information is usually sent in batch files at the end of day. So your accounts payable and general ledger information is not always up-to-date. (This might not be an issue for you, since you can access current sales, receivables, purchases, inventory status and lots of information right in your POS software.)
• Learn both programs - You have to learn two different programs and user interfaces.
• Updates and maintenance can cause problems - For example, if QuickBooks has an update to their accounting software, you shouldn't load it until the POS software has an update that supports it. Otherwise your accounting totals will be wrong!

• Difficult configuration - With interfaces you have to map your "POS system generated account numbers" to your "chart of accounts" in the accounting software. If it's not set up properly, your general ledger reports will be wrong. When setting up this type of interface, you'll need to get help from your accountant and the POS company.

Utilize accounting software that's built-in and fully integrated
Some POS companies will offer their own accounts payable and general ledger software that's tightly integrated and built into the POS software.

Some of the advantages of built-in (integrated) accounting include:

• Real-time updates - If the POS system sends line item detail, then all information is updated instantly in real-time. So your accounts payables and general ledger transactions are posted as soon as the sale or receiving transaction is completed in the POS.
• Learn one program - You only need to learn how to use one program.
• Update once - You only load updates into one software program. So you don't have to worry about making sure your POS is updated and supports the new version of your accounting software.
• Quickly drill down - Sometimes you can drill down from your general ledger entries into transactions like invoices, receivables and inventory adjustments, making it really easy to trace information. For example, if you get audited by the sales tax police, you can quickly reference back to the customer name, invoice number and amount for every sales tax entry. This makes it easier to audit.
• Easy configuration - You don't have to worry about mapping account numbers or making sure two different programs are communicating properly.
Some of the disadvantages include:
• Poor design - You could get stuck with poorly designed accounting software. Not all POS companies understand how to design a good accounting system. Just because they offer integrated accounting doesn't mean it's good. It's not their specialty. Your odds are better if the accounting system was designed by specialists.

Keywords: POS (Point Of Sales) Recorders,Integrating POS & Accounting Software Systems,The History of POS,What is POS Software,advantage and disadvantages of POS,Difficult configuration,Real-time updates.

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