Has it ever happened that a customer wanted to pay you by card and you told them that you don’t accept cards and they move on? Or maybe they tell you they would quickly withdraw it from the ATM and come back, but they never showed up?

In the UAE, most people prefer card payments because since 2020, the government has been working to make Dubai cashless. In fact, according to the London-based analytics company GlobalData card payments could reach AED511 billion ($139 billion) in 2024. So, for small businesses in UAE it is especially important to support card payments, or it means lost sales. In such a scenario, a POS system is a perfect solution.

A POS system doesn’t only mean the card machine that is used to accept payments; a POS system is much more than that, but what exactly? How does it work for small businesses and what are the benefits? In this article, we will cover everything that you need to know about a POS system, and how to choose the right one for your small busines

1. What is POS System?

A Point of sale system or a POS system is a combination of hardware and software that helps you accept payments from your customers, (be it cash, card or an online payment) and record and manage those sales transactions.

In simple words, the cash register, the screen, the printer and the card machine that you see at the checkout in a supermarket or any other retail store  together makes a POS system.

Today, POS systems come in different sizes and formats. Some merchants have an elaborate system with a cash register, a huge screen and printers along with a card machine while some use mobile or iPads instead of the screen. Smart POS systems such as Fortis combine both the software and hardware into one card machine so you can accept orders and payments in one machine without the entire setup.

2. Components of a POS System

Now that you have some idea about what a POS system looks like, let’s break it down into components and see what makes up the POS system.

2.1 Hardware

Terminal: This is the primary interface for customers and employees where the POS software runs. Usually it is a screen, mobile or an ipad and in modern POS systems, the interface could be in a card machine too. Cashiers use it to add sales information such as the product and price.

Barcode scanner: Usually large merchants that have a huge variety of products need barcode scanners to quickly scan the product being sold. Small businesses with limited products usually manually add the information or if you have a Smart POS, you can choose it from the catalog added in your card machine.

Receipt printer: Most businesses give receipts to their customers and so they also have a printer. Usually, the printer is connected to the software and it automatically prints the receipt as soon as a sale is registered.

Card reader: If you accept card payments then you need a card machine. The type of card machine you need will depend on the software you are using. Some software is only compatible with specific card machines.

Cash drawer: This is a secure compartment to store cash and other payments for customers who prefer cash. It is a common sight at supermarkets, retail stores etc.

These hardware components work together to provide a complete solution for processing sales transactions. The specific components needed may vary depending on a business’s needs and budget.

2.2 Software

Now coming to the software that runs all the hardware, you can consider it as the brains behind the hardware. The software allows you to record transactions, manage purchase history, customer data and even offer loyalty programs.

3. How Does a POS System Work?

1. Customer Interaction: In a traditional POS system, a customer selects items and brings them to the checkout counter. A cashier then scans the barcode of each item using a barcode scanner, which automatically adds the item to the sale in the software. The POS system displays the item’s name, price, and quantity on the screen.

2. Transaction Processing: The POS system then calculates the total amount due, including taxes and discounts if applicable. The customer chooses their preferred payment method (cash, card, or digital wallet). The cashier enters the payment information into the system and then the POS system verifies the payment and processes the transaction.

3. Generates a receipt: Once the payment is processed, the POS system generates a receipt. It could either be a physical receipt or as it happens now in most stores, the receipt is emailed to the customer.

3.1 POS system-Behind the Scenes

The hardware that you see in a store is an essential part of the POS system, but as we mentioned earlier, a POS system has a lot more capabilities than just registering a sale and accepting payments. Let’s see what goes on behind the scenes.

Order Management: With a POS system software, you can keep track of all your orders and their status. You can check the payment status, the payment type and even see how much sales you did

Customer Data: A helpful thing that a POS system can do for you is collect customer information, such as name, contact details, and purchase history. You can then use this data to build customer loyalty programs, offer personalized recommendations, and track customer behavior.

Maintain a Catalog: If you are a small business, a POS system can also help you manage your products catalog. You can add all the products you sell, their prices and their variants. A helpful tool that frees you from manually tracking your products in Excel or paper.

Reporting and Analytics: The POS system also generates various reports, including sales summaries, inventory reports, and customer analytics. These reports provide valuable insights so you can make informed decisions.

Loyalty Programs: An interesting part about a POS system is that it can help you cultivate relationships with your customers. You can offer your regular customers discounts and increase repurchase.

4. Benefits of Using a POS System

As a small business, there are so many competing priorities that you have to take care of, especially making sure that you start generating revenue consistently that you often don’t pay attention to other things. However, it is essential to lay the groundwork so you are not wasting your time in non-value adding activities such as tracking orders manually or maintaining excel sheets. A POS system can take away all your manual efforts, leaving time for things that matter. Here is why you should consider getting a POS system:

1. Increased Sales and Revenue

• The most apparent benefit of adding a POS system is that you can make sure that you never lose a sale because you only accept cash. With a POS system, you can easily card payments and even accept online payments. You can just create a payment link and send it to your customers to pay online as per their convenience.
• Imagine the amount of repeat business you can drive with an effective loyalty program.  If you are a salon, for example, you can offer loyalty points that can be redeemed for discounts or free services. Just keep them coming back for more and increase customer retention.

2. Improved Efficiency and Accuracy

• A POS system automates the sales process and reduces the time it takes to complete a transaction. For instance, if you are a small grocery store, you can quickly select and record the products sold, calculate totals, and process payments.
• Manual calculations and record-keeping can lead to errors. What if you don’t update your Excel sheet in time or you record a wrong payment? At the end of the month you would be left with a messed up account and numbers that don’t tally with each other. A POS system eliminates these risks and ensures that you record accurate sales data and financial information.

3. Enhanced Customer Experience

• POS systems can act as your CRM and  store customer information, so you can offer personalized services and tailored promotions. For instance, if you are a small coffee shop and you know what your regular customers prefer, you can suggest new drinks based on their past orders.
• The most important aspect of implementing a POS system is that it reduces wait times. It is particularly essential for small businesses with limited space or high customer traffic.

5. Choosing the Right POS System for Your Business

If by now, you are convinced about purchasing a POS system for your small business, then here are some factors that you should consider before you spend your money:

Features and Functionalities:  When it comes to features, make sure that it supports the basic functionalities that your business needs such as transaction processing, customer management, employee management. Now some POS systems may offer you a lot more features that you might not need. These extra features not only add to the cost, but also make managing the POS system more complicated. So, analyze the stage your business is at and then decide accordingly.

Ease of Use: This is an important factor. You would want your POS system to start giving you returns instantly but when you buy a complicated one that is not easy for you or your staff to figure out, a lot of time gets wasted in training and mistakes. So, make sure that the software you choose has a clean and user-friendly UI and you can get started with it with little or no training.

Cost: Before you spend money, evaluate how the POS system will contribute to your business’s growth and profitability. Remember, while there’s an initial investment, the long-term benefits in terms of increased efficiency and revenue can outweigh the costs.

There is always so much you can spend when you are just starting your business. When choosing a POS system, don’t just look into the apparent costs of hardware, software and implementation, but also take into consideration the monthly subscription fees, maintenance costs, and payment processing fees.

Hardware Requirements: The POS software should be compatible with your existing infrastructure and business needs or you would end spending money on replacing your hardware. If you opt for a smart POS, for instance, then you can get an entire POS system within your card machine.

Cloud-Based vs. On-Premise: This is an important decision, while an on-premise system can offer you more control over your data, it requires higher upfront investment and it takes up space as well. On the other hand, cloud offers flexibility and accessibility. Consider your business’s IT infrastructure when deciding between these options.

Customer Support: Make sure the POS provider should offer reliable customer support and technical assistance. You wouldn’t want your provider to ghost you when you run into technical issues. Check how quickly the provider responds to inquiries and resolves issues.

6. How to Implement POS System in Your Business

Once you’ve selected your POS system, it’s time to implement it in your business. Implementation is usually quick and you can get started immediately, but here are some steps that you must follow:

Hardware Setup: The hardware setup would depend on the POS system you choose. If you choose an elaborate POS system then you would have to install the terminal at your checkout counters or other points of sale and then connect cash drawers, receipt printers, barcode scanners, and other hardware components to the terminals. In case, you opt for a Smart POS, you wouldn’t need all of this hardware, all you will need is a card machine to accept orders and the payments as well.

Software Installation: Download the POS software from the vendor and install it on your chosen devices (computers, tablets, or smartphones or integrate it in your card machine). Follow the vendor’s instructions to configure the software settings according to your business’s specific needs.

Data Migration: If you have existing sales and inventory data from your current system, on Excel for example, migrate it to the new POS system to avoid any data loss. Before migrating data, ensure it is clean and accurate to avoid errors in the new system.

Training: Train your employees on how to use all the features of the POS system. Make sure that they get hands-on training and they are equipped to accept orders.

Conclusion

The UAE market would soon be cashless, so even if you are a small business, it is essential for you to accept all kinds of payments including cards and online payments. However, when you are just starting, it could be difficult to invest in all the hardware and software. In this case, it would be a smart decision to go for something that is simple and easy to use such as Fortis POS system.

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