There exists in the world an important variety of computer software known as a ‘POS System.’ Depending on your background, you may or may not be familiar with the term. A good general description of what a POS system is would be; A piece of business software designed to collect, process, store, and organize information relating to sales, billing, payment processing, inventory and accounting. In case you’re wondering, the acronym ‘POS’ also stands for, ‘Point of Sale.’
Any person or organization that sells products or services utilizes a POS system of one kind or another. In the broadest sense, a POS system could even be a handwritten ledger use to keep track of sales. These days, however, nearly every business employs a computer-based solution for keeping track of this kind of information.
We come in contact with a range of POS systems every time we buy something. At the convenience store, a POS system is used to ring up your Sunday coffee and doughnuts. It also calculates any taxes that you and/or the business you are buying from must pay, adjusts inventory to let the store’s manager know when they are running low on doughnuts, records which employee sold you the doughnuts, reports on which days and times of year doughnuts are particularly popular, and which employee is the best at upselling you to a newspaper with your doughnuts. If you pay the $2.76 for your coffee and doughnuts with a credit card (you know who you are), the POS system will also handle the complicated series of network transactions between your bank, credit card issuer, and the store’s payment processor needed to make that purchase possible.
The most common POS system you are likely to encounter on a regular basis is the kind used by retailers – however they are also used by many other types of businesses. With BenCoblentz.com, for example, I use a very cool POS System called Microsoft Office Accounting to handle invoicing, payment processing and customer account management for my consulting business. Say what you will about Microsoft and it’s evil empire, this program has provided a perfect solution for my needs and it comes at the very attractive price of free.
Enterprise level POS systems can have implementation and maintenance costs that range anywhere from a few hundred dollars to a few million depending on the application and scope of their use. The full version of the program I use costs around $200, but for the time being I choose to use the free version because the additional functions of the fancier program are not useful to me at this point in time. The price of ‘free’ in my case is a few banner ads
across the bottom of my screen and no physical inventory tracking. Because I only sell services, there is no need for me to count and track individual items that I might otherwise need to record in the POS system.
What my system does do is keep track of my client accounts with contact information, sales history, fully integrated billing and payment features as well as helping me stay on top of internal accounting. I find this latter function especially valuable. Being an English major and more of what some might call ‘the creative type,’ it is safe to say that my natural interests do not lean toward the ins and outs of the accounting profession. Microsoft Office Accounting allows me to handle the necessary parts of making the money side of my business work without having to manually tabulate and track things like taxes, invoices, and corresponding debits and credits to customer accounts on an individual basis. To this I say, “hooray!”
Specific features of a POS product you might choose can vary a great deal. For my own case, a few additional features Microsoft Office Accounting provides are access to business credit rating information, employee hours and wage tracking, and detailed sales and client trending reports. I do not currently use some of these extra features but it is nice to know that they are there if my business grows to a point where I might find them handy. Scalability is always a big plus when deciding on any business software.
For example, the cost of running credit for new clients can add up to be a sizeable chunk of change for a small business like mine. In the future I might find it worth while to determine a pre-set dollar amount for work that I will provide before being paid by a client, but at the moment the cost/benefit ratio for such a practice just doesn’t make sense for my business. By requiring a 50% deposit on all new accounts I can be fair to every new client I serve while ensuring that I am not exposing myself to unsafe levels of liability for the occasional unpaid account. I can also then use a client’s prior account history to make sensible decisions on the extension of business credit for future projects.
Similarly, since I am a one man show, I don’t need to worry about keeping track of employee information and compensation. Of the extended features I mentioned earlier, the only one that I am likely to use in the near future is the ability to run custom reports to figure out which of my services are providing the most benefit to my customers.
You might wonder why I decided to write about something like POS systems on a blog that is supposed to be about me and my work, and for that I have a simple answer. I could not do my work without this important business component in place to help me out with the administrative details that might otherwise be overwhelming and difficult to stay on top of. Though it may not be as fun or engaging as coming up with a cool new logo design or advertising campaign, some time and consideration must be given to making sure that there is a good support system in place to keep the majority of my time reserved for doing client projects. Also, keeping track of my incoming revenue and outgoing expenses becomes important around tax time. Suffice it to say, I think it’s important enough to mention once… and now I have!