What is a point of sale (POS)?

By Chase Canada

Are you considering a new point of sale (POS) system? The right POS software can be a workhorse, allowing customers to easily purchase their items and provide business owners with access to crucial data.

Whether you are looking for your first POS system or want to replace your current system, there are many factors to consider. Which features are essential for your business? If you’re completely new to the world of POS systems, you may even wonder what tasks a POS system can do besides calculating how much change to give a cash customer.

This article covers the landscape of the POS system market, including exactly what a POS system is, common features, and how the right POS system can help your small business grow. 


What is a point of sale (POS)?

In a physical store, the point of sale is the location where customers make their purchases, and a POS system is the set of tools that help make that purchase happen. It serves as the central hub to process sales transactions, gathers data, and manages inventory. Whether you run a restaurant, retail store, service-based or hospitality business, or another type of store, all merchants need a POS system. 

A POS system generally includes a register in businesses with a physical location, but they may also use a tablet or cloud-based POS system. A cloud-based POS system includes the software that processes the sale and accepts credit cards but offers the ability to use any device to accept payments. With a cloud-based POS system, management and their teams can access sales reporting from anywhere.

A conventional POS system in a brick-and-mortar establishment includes several devices, including some combination of the following:

  • Cash register
  • Receipt printers
  • Credit card readers
  • Barcode scanners

A POS system also includes the software that processes the sale and accepts credit cards. As a small business, you must be able to take payment by card; after all, in 2020, credit cards made up 30% and debit cards made up 38% of all transactions in Canada.

What are cloud-based POS systems?

Cloud-based systems securely store data and process payments over the internet — without requiring expensive on-site servers.

Most of us are familiar with the standard cash register — and may have used one before. However, many mobile, cloud-based POS systems use a tablet or smartphone rather than a traditional register.

There are several benefits to this setup. For example, it allows merchants to access reports and manage their business in real-time and on-the-go. It also provides more flexibility: It’s easier to host pop-ups or add registers during high-traffic seasons, such as the holidays.

There are other benefits to cloud-based POS systems:

  • Setting up and using the system is simpler than a traditional register.
  • The customer may be able to pay without waiting in line.
  • Businesses may sell more products because they can easily manage multiple locations by accessing sales and business information from anywhere.
  • Businesses have access to better data and faster reporting.
  • Integrations with other software help manage inventory, monitor hourly employees, and more.

Many cloud-based POS systems also provide additional features to improve business flow. They may integrate with your business software or offer employee training. 

Features to look for in a POS system

The right POS system can help you drive sales, improve the customer experience, and simplify the sales process.

Before deciding on a system, take a look at your current process. Research and answer questions like:

  • What data do you need?
  • Where do your customers and/or employees get confused during a sale?
  • Are there specific challenges you want your business to overcome?

For example, if wait times are higher than you’d prefer, you may prioritize a cloud-based POS system that can be used on multiple mobile devices. That way, employees can help customers check out on the sales floor. Alternatively, if managing inventory takes a great deal of time, look for a system that tracks product turnover and improves the ordering process.

Let's look at the most common POS system features you should know about.

Catalogue tracking and management

Inventory control and order management can take up hours of your time. A POS system can manage much of this for you by tracking items sold, allowing employees to look up stock and find prices, and notifying you when stock is low or at a pre-set level.

Multi-channel capabilities

If you have both an online and brick-and-mortar store, look for a POS system that has multi-channel capabilities. With it, your business can seamlessly track and process sales in both locations. If you sell on sites such as Amazon in addition to your business website, make sure your POS software can handle those channels as well.

Customer management

POS systems do more than just process credit cards and track revenue — they can also help you keep tabs on your customers and their needs. Data from POS software can help you better understand where your customers live, collect email addresses to build your email marketing list, manage loyalty programs, and store receipts to streamline the return process. Look for a POS system that offers the customer management features your business needs to succeed. 

Reporting and analytics

Data drives businesses. The right POS system provides a range of reporting and analytics features you can use to drive business decisions. For example, you can see which products sell the most, what time of the day is busiest, which credit cards people use, or which employees sell the most products.

This information makes it easier to order products on time, schedule employees, and determine which products your customers prefer and buy most often. After taking payments, reporting is the most critical feature you should look at in a POS system.


POS systems shouldn't work in a silo. In today's digital world, they connect with many other platforms, including your sales software, customer relationship management (CRM) platform, email marketing provider, invoicing software, and more.

This connection, known as integration, also improves automation. For example, a small business selling custom knitwear could integrate their POS system, email marketing software, and CRM platform and use these integrated systems to create an automation that emails coupons to frequent customers who haven't completed a purchase in two months.

Choose a POS system that connects with your sales, marketing, and other business platforms so you can make the most of your business data.

Security and compliance

Security is a top concern whether your business is online, brick-and-mortar, or both. Most POS systems process credit cards and other electronic payments, so you need to ensure that data is secure. Beyond account information, email addresses, phone numbers, and physical addresses are all also sensitive data, so make sure your entire POS system guards this information.

Depending on the locations of both you and your customers, you will need to comply with Canadian privacy laws, CASL, GDPR, and other regulations in your area.

Make sure your POS system takes security seriously. This may include using encryption, whitelisting applications, and automating security updates.


If a POS system is hard to use, it frustrates employees and slows down the sales process, which can cost a business money. For your business, consider a POS system that is created specifically for your industry or product. Choose one that's intuitive to use with well-labeled buttons and an easy-to-use interface. Ask about customer support options as well, because your business deserves to work with a provider that has excellent support that’s available when you’re open and need them.

Training resources

To make the most out of your POS system, you have to know how to use it. Make sure your system’s provider offers training resources, such as videos or a detailed FAQ page. Training should include not just new employee training, but also in-depth product guides, details about features, and troubleshooting documentation.

Some POS systems offer integrated training, which allows users to access tips as they navigate the payment process. This feature can be extremely helpful in a fast-paced retail or restaurant environment.

Customer support

No matter how easy your POS system is to use, eventually, you'll have questions, need help, or run into problems. Make sure the POS system you are considering offers support in the languages and time zones you need. Check online reviews, too, to see how current customers rate the support. Does the company respond quickly? Are there long downtimes?

Less common POS system features

Your business doesn't have the exact same needs as every other business, which is why there is no one right POS system on the market. In addition to the common features explained above, some systems offer more niche features, such as:

  • Online ordering for in-store pick-up
  • Delivery tracking
  • Age verification
  • Integrated calendars
  • Gift card management

Drive the success of your business with a cloud-based POS system

In today’s world, data is king. The right POS software provides the data and features your business needs to grow, all in one easy-to-use package. Cloud-based POS systems are affordable and can integrate with other sales and marketing tools. For many businesses, that means you’re not stuck in a single provider’s ecosystem that doesn’t work with your other data sources.

For small businesses that want to invest in their future, a cloud-based POS system is essential.