What Is a POS System and How Does It Work

What Is a POS System and How Does It Work?

If you are wondering about the answers to the questions of what is a POS system and how does it work, you landed at the perfect spot. POS is the abbreviation of the phrase “point of sale”. Simply put, a POS system is a system that provides the business transaction between a customer and a company. It is made up of hardware and software that work together to accomplish sales and payment transactions at the point of purchase. If you are starting a business, you might need a point of sale system. However, firstly, you need to know what a POS system is and how it works. 

If you are searching for an answer to the questions of what is a POS system and how does it work so this article is just for you. A point of sale system, or POS, is the place where your customer makes a payment for products or services at your store. In other words, when customers purchase a product at your store, they’re completing a point of the sale transaction. 

How does a POS system work?

 Firstly, a customer decides to purchase a product and gives the product to the cashier to make a payment. After that, your POS system calculates the price of the product and updates the inventory count of that product to show. Then, your client makes the payment by credit or debit card. Finally, when the payment occurs, a receipt is created and now, you can give the products to your customer.

What Is a POS System and How Does It Work?: Key Components of a POS System

POS systems are made up of two components: hardware and software. 


The software is the program that enables POS to work. There are two types of POS software: on-premise and cloud-based. To use on-premise POS software, you need to be on location. It does not require the internet since it is based on a closed computer network. However, cloud-based POS software offers more flexibility. It can be accessed over the internet. If you have an internet connection so you can access the software from any device like a phone or tablet. POS software has common features:

Sales Reporting: Most POS systems record and analyze your sales data. An ideal post system should create detailed sales reports that are based on the product, employee, hour, net profit, the total cost of the products that are sold.

Inventory Management: Inventory management keeps track of your products so that you can know when it’s time to order them. 

Customer Management: It keeps track of your customers’ data, so you can see what they bought and when they bought a product.

Employee Management: It allows you to know when your employees are working or how they are performing.


These are the physical components that are necessary to run your POS. 

Monitor/Tablet: A tablet will be a good alternative to see your employees’ clock-in and sales reports.

Barcode Scanner: It enables you to see the details of a product.

Credit Card Reader: It allows your customers to make a payment securely. 

Cash Drawer: It allows you to keep your cash securely.

Receipt Printer: Paper receipts show what and when customers bought a product or how much they paid.

PCBancard is a credit card processing company, and it has the best POS system. We take care of your credit card payments with the highest level of integrity. While doing this, we aim to eliminate your credit card processing fees, and we help you save extra money in order to upgrade your business. We hope that this article guides you through everything that you need to know about the answer to the questions of what is a POS system and how does it work. If you have any questions or problems, please do not hesitate to contact us. Our amazing team will be delighted to assist you and figure out your problems.

powered by Typeform