One of the biggest barriers that prevent business owners from making the shift to a point-of-sale system is the price tag. It typically costs more than a traditional cash register, and there’s a whole myth about POS systems that they don’t add significant incremental value to the business. The former may be true, but the latter is highly false.
A POS system is designed for superior functionality, jam-packed with features to drive business efficiency. It speeds up operations, tracks vital business information, and generates insightful reports to help you make smarter decisions for your business. It reduces the need to manually sit down to crunch numbers, comb through paperwork, and wrack your brain for what it all means.
Because a point-of-sale system automates so many manual tasks, it cuts down on time and manpower, which can result in savings for your business. A POS system helps you rake in more profit by highlighting areas for improvement and efficiency.
5 Ways a POS System Helps Your Business Cut Costs
1. Efficient Inventory Management
The automation of inventory tracking is one of the biggest advantages of a POS system. Not only does it save you time and effort by reducing the need for physical counts, but it saves you a lot of money in the long run too. Per the National Retail Federation, an estimated $244 billion is lost by American retailers annually because of excess inventory while approximately $45 billion is lost due to not having items in stock.
Since inventory levels are automatically updated once items are scanned and checked out, the risk of human error and its subsequent cost consequences are greatly reduced. Furthermore, it reduces the chances of theft going unnoticed because you can easily track disparities in your sales report compared to your inventory levels.
2. Smarter Stocking to Cut Costs in the Workplace
A POS system tracks the products or menu items purchased and updates the stock levels accordingly in real-time. This information can provide crucial insight on which items are selling well and which ones are stagnating on the shelves. This allows you to make smarter restocking decisions and avoid losing money on products that are not profitable.
A good POS system can also store and analyze historical sales information, so you can track seasonal trends. For example, if the holiday season is coming up, a POS system can tell you which products sold well last year so you may want to place an advanced order to ensure you have sufficient stock.
It can also remind you when products are due for restocking, so it reduces the risk of you losing customers due to a lack of product. You’ll always have what you (and your customers) need.
3. Better Supplier Negotiations
Another nifty feature of a good POS system is that it can track your supplier purchase history. It stores your stocking information, so aside from letting you know when it’s time to re-order, it can also tell you how much you paid for stocks recently and the average price you have paid historically.
This vital information enables you to negotiate for better prices from your regular suppliers and rake in extra savings. Over time, imagine how this can compound.
4. Cutting Costs by Making Smarter Staffing Choices
Based on the sales across time slots, a POS system can quantify your business’s peak hours and slow hours. This will give you a good idea of how many employees you need at a given time to ensure operations run smoothly.
For example, if your restaurant has dead hours on weekdays but is jam-packed on weekends, it might make more sense to just hire some part-timers for Saturdays and Sundays instead of hiring many regular employees. Avoiding the mistake of overstaffing helps you cut down the cost of employee salaries and benefits.
Having sufficient staff also benefits you in the long run as fair workloads and work hours typically result in better staff retention. High employee turnovers tend to be costly in terms of manpower and resources, and it’s an expense that you can drastically reduce.
5. Make Operational Adjustments
A POS system tracks almost every business-related data point, so you can glean all sorts of insights if you just know where to look. Once you’ve had your POS system up and running for a year or two, make sure to review your historical data. This will show you trends about your business that you can either try to replicate or avoid in the future.
For example, if you notice an unexpected drop in sales during some weekends, you may want to double-check if there was a local event that you didn’t anticipate. This will help you plan better in case it’s a recurring event so that you don’t lose out so much next time around.
Look at a POS system as an investment — an investment with a major ROI. By investing in your business and giving it the technology it needs, you save time and money and even make money as a result. It’s not just about cutting costs at work; you could also very well see a bump in your revenue. If you’re comparing it to your current cash register, know that truly, they can’t be compared at all.
For your business and payment processing needs, turn to the one-stop hub for all things POS. True POS offers top-of-the-line technology and payment solutions and provides excellent customer support from setup to maintenance, so running your business has never been easier. Get a free quote today or let us know how we can help you grow your business!