General Manager’s Guide To POS: What IS POS?

Part 1 of the General Manager’s Guide

General Manager's Guide
General Manager's Guide to POS: What is POS?

General Managers’ plates are full: You ambitiously juggle the responsibilities of smooth business operations, well-equipped staff, satisfied guests, and positive revenue growth. The General Manager’s Guide To POS dives into the secret weapon that can help you meet all of your small business goals: point of sale (POS) systems. 

Whether you’re a seasoned veteran of POS or completely new to the technology, you’ll learn something surprising about point of sale’s capabilities in the front and back of house, as well as how this technology boosts guest engagement, staff performance, and overall business profits. 

BUT, for now, we’re taking it back to the basics: What the heck even is POS?

Point Of Sale’s Origin Story

We know that POS stands for point of sale, with the most basic definition being that it’s where money is traded for goods

Invented by an American shopkeeper in the late 1800s, the first point of sale quickly became known as a cash register. As computers began to drive cash registers nearly a century later, the introduction of credit cards accelerated the point of sale evolution

Now, POS devices process card payments, act as ordering tools, and feature touchscreen technology and colorgraphic monitors. Therefore, they’re essential to making your small business money, honey!

POS Systems Are Made Up Of Two Parts

POS systems speak to the entirety of two key components: software and hardware. 

POS Software Is Tech That Accepts Payments, Tracks Sales, & More

The primary solution that POS providers offer is the unique, robust software behind their systems. It’s the technology that allows you to accept and process payments from guests and keep track of all your sales data. 

For most providers, POS software doesn’t stop there. In fact, to remain competitive among other softwares out there, POS companies build additional capabilities that go above and beyond payment processing. Here are a few examples of additional software features:

You can opt in or out of using additional features depending on your business’s needs. 

POS Hardware Are The Devices That Support The Software

POS hardware is more straightforward: It’s the devices your staff and guests physically interact with! That includes:

  • Stationary devices: Tablet terminals with stands on a bar or counter
  • Mobile devices: Handheld terminals (tablet or smartphone) that staff carry around
  • Guest devices: Yes, guest smartphones are considered POS devices when using contactless ordering! More on that to come. 

The type of POS devices your business needs typically depends on your service model, but we’ll get to front of house operations in the next chapter of the General Manager’s Guide!

Of course, there’s other POS hardware that assist staff in their jobs, such as:

  • Kitchen display system (KDS) which includes a controller and bump bar
  • Printers
  • Cash drawer
  • Bluetooth barcode scanner

How Much Do POS Systems Cost?

Now that we know what makes up a POS system, let’s talk about how much you must budget in order to use all of this handy software and hardware. There are several different components of cost that you and ownership need to consider. 

Platform Costs

Because POS systems are so robust in their capabilities, you can expect to pay a monthly or yearly fee to access the software’s platform. Some POS providers include features like customer support and a reporting dashboard in their platform fee, but others charge for those features separately. 

Make sure you budget for the must-have features first, and choose a POS that gives you the opportunity to grow into additional features and functionalities.

Payment Processing Fees

POS processing fees sound complicated, but they’re important to understand so you can help make informed decisions for your business. 

Here’s what you need to know as a General Manager:

  • Whenever a card is swiped (or tapped or dipped!) someone is paying a processing fee. Accessing credit card networks isn’t free
  • A lot of stakeholders want a slice of this processing fee pieBanks and Card Networks get the lion’s share, and POS providers get a small bite
  • Your business’s processing costs depend on the fee structure of your particular POS provider: Interchange Plus or Flat Rate Processing.

Keep in mind that every POS provider is hopping the same card processing hurdle. If a provider is boasting incredibly low rates here, they’re making up that money elsewhere, likely in additional monthly feature fees or customer support fees.

Here’s where certain providers stand out when it comes to reducing processing costs: POS tools exist that help small businesses offset those fees

Dual Pricing, for example, completely recovers payment processing costs for both credit and debit card transactions. Plus, every state allows businesses to do it and it’s a positive guest experience tool. 

If you’d like a deeper dive on POS costs, here are some great resources for General Managers:

Hardware Costs

The hardware you budget for depends on your business’s size and number of staff members. Purchasing fast, durable devices is vital to your efficiency and success, so it’s well worth the investment. This includes everything we touched on above: tablets, mobile handhelds, printers, etc.

There are different purchasing options for hardware depending on your chosen POS provider. You can get:

  1. Proprietary hardware: These are custom-built devices that work with a particular POS software, and highly recommended if your business can afford it. They’re typically more expensive, but usually come with a warranty and hardware support if something goes wrong. 
  2. Open source components: This is an option if you’d prefer to shop on your own for compatible hardware. Resellers vary in quality, but it may be a cheaper option at first. Most POS providers prefer you buy hardware from them, simply because open sourcing isn’t as reliable. 
  3. Leased hardware: This isn’t recommended for a business trying to scale. You’ll likely end up paying more in the long run than you would just to buy hardware outright, and you also run the risk of getting stuck in a contract for the leased materials. 

Onboarding Costs

Onboarding your business and team onto a new POS system is a big transition. This is of course a one-time cost, and worth the money to make everyone on your staff feel comfortable and well trained on the system. 

Some POS systems, like Arryved, provide on-demand training resources, such as step-by-step articles and how-to videos, for your team to revisit or for new hires to access. That way, you can always make the most out of everything your POS has to offer!

Integration Costs

POS software integrates with other software, ultimately extending the functionality of your entire system. Because integrations specialize in certain areas of business as completely separate providers from your POS, you can expect additional recurring fees for each of your integration partners. 

We break down specific integrations critical to your success in a future chapter, so hang tight!

What is POS? It’s Essential To Your Small Businesses Success!

We’ve broken down some of the technical nitty gritties of POS systems, but we’d be remiss not to mention all of the tangible human benefits to these small and mighty systems

  • The robust capabilities of POS systems make your staffs’ jobs easier—in both the front and back of house—by streamlining operations. 
  • Guests have better experiences with the help of POS systems. Since operations are streamlined, orders get delivered faster and guests have more time to create genuine connections with your knowledgeable staff. Plus, there are a ton of guest engagement tools available that ensure your guests are brand loyalists for life.
  • POS systems help businesses organize, scale, and ultimately increase profitability

You can’t ask for much more as a General Manager! 

Alright, onto the next chapter:

    Ready for a better POS?