What is a POS system?
A POS system is the software and hardware a shop uses to record sales, take payment and give receipts. POS stands for point of sale: the counter, and the moment, where a customer pays.
A cash register adds up a sale and holds the cash. A POS system also knows what you sell, what each item cost you, how many are left on the shelf and who sold them. Every sale updates the stock count and the day’s figures as it happens, so you are not working them out in a book at night.
In Kenya you will also hear “POS machine” used for the card terminal a bank gives a shop, often called a PDQ. That machine only takes card payments. A POS system runs the whole sale: the items, the prices, the payment however it is made, and the record afterwards.
What does POS mean?
POS means point of sale, the place where a sale is completed and paid for. “POS system”, “POS software” and “till system” all mean the same thing: the tool a shop uses at that point.
You may also see EPOS (electronic point of sale). It is the same idea; the “electronic” is there to set it apart from a cash box and a receipt book.
What are the parts of a POS system?
A POS system has one essential part, the software, and a few pieces of hardware you add as the shop needs them. A small shop can start with the software on a laptop or tablet it already owns.
| Part | What it does | Do you need it? |
|---|---|---|
| POS software | Holds your products and prices, records sales and payments, keeps stock and reports | Yes |
| Till device | The computer, tablet or phone the software runs on | Yes, but it can be one you already have |
| Barcode scanner | Reads the barcode on a product so the cashier does not type | Very useful once you sell many items |
| Receipt printer | Prints the customer’s receipt, usually on 58 mm or 80 mm thermal paper | Most shops want one |
| Cash drawer | Holds the cash and opens when a cash sale is completed | Useful where you take a lot of cash |
Some shops add a label printer for barcode and shelf labels. Setting up POS hardware explains how each piece connects.
How does a POS system work?
A POS system works by matching each item sold to a product record that already has a price, a cost and a stock count. The cashier picks the items, the system adds them up, the customer pays, and the sale is saved with all its details.
Here is a typical sale in a mini-mart in Machakos:
- The cashier scans a 2 kg packet of sugar (KSh 290), a 2 kg packet of maize flour (KSh 180) and a bar of soap (KSh 120).
- The till shows the total, KSh 590, with VAT worked out on the items that carry it.
- The customer pays KSh 600 in cash. The till shows KSh 10 change and the drawer opens.
- A receipt prints with the shop’s name, KRA PIN, the items, the total and how it was paid.
- The stock of sugar, flour and soap each drops by one.
- The sale joins the day’s totals: by hour, by product, by cashier and by payment method.
At the end of the shift the system knows how much cash should be in the drawer. The cashier counts it, and any difference shows the same evening instead of at the end of the month.
What does a POS do that a cash register cannot?
A POS system keeps track of stock, customers and money, not just the total of each sale. Those are the three things that usually go wrong first as a shop grows.
Stock
Each sale takes items out of stock, and each delivery you receive puts them back in. You can see what is running low before it runs out, and a stock take compares what the system expects with what is actually on the shelf.
Customers
If you sell on credit, the POS records what each customer owes, what they have paid and how long a balance has been outstanding. The notebook behind the counter stops being the only record, and disputes are settled from the record rather than from memory.
Reports
Sales, profit, VAT and stock value come straight out of the sales you have already made. You can answer questions such as “which 20 products bring in most of my money?” or “are Saturday afternoons busier than Saturday mornings?” without adding anything up by hand.
Control
Each cashier signs in, so every sale, discount and refund has a name on it. The owner decides who may give discounts, change prices or cancel a sale, and the system holds everyone to it.
Cloud POS or installed POS: which is better?
A cloud POS runs in a web browser and keeps your records online; an installed POS is a program on one computer in the shop. For most Kenyan shops, a cloud POS that also keeps selling offline gives the advantages of both.
| Cloud POS | Installed POS | |
|---|---|---|
| Where it runs | In a browser on any computer, tablet or phone | On the computer it is installed on |
| Where the records are | On the provider’s servers, reachable from anywhere | On that computer, and lost with it unless you copy them |
| Seeing sales from home | Yes, from any device | Usually only at the shop |
| More than one branch | One system for every branch | Often a separate copy per branch |
| Updates | Arrive by themselves | Installed by you or a technician |
| When the internet is down | Depends: some stop, good ones keep selling | Not affected |
| Typical pricing | Monthly subscription | One payment, sometimes with yearly support fees |
The weak point of many cloud systems is the internet. Before you choose one, ask what happens during an outage; how offline POS works explains what to look for.
How Wave POS works as a POS system
Wave POS is a cloud POS for Kenyan shops, supermarkets and wholesalers that runs in Chrome on any computer or tablet, and on phones. Your business gets its own address, such as yourshop.wavepos.app, and any device with Chrome can be a till.
- Selling. Scan with a USB barcode scanner, or search by name or SKU. Quantities go to three decimals, for goods sold by the kilo, litre or metre.
- Offline. Sales are saved on the till and sent, in order, when the internet is back. Receipt numbers have no gaps, even offline.
- Payments. Cash, M-Pesa, card, bank transfer, cheque and customer account, or a mix of them in one sale.
- Stock. Every sale takes stock out of the branch it was made in, and every delivery you receive adds it back at cost.
- Receipts. 58 mm and 80 mm thermal printers, with your logo and KRA PIN on every receipt.
- Reports. Thirteen reports, from sales and VAT to profit and loss, each exporting to Excel, CSV or PDF.
A card payment taken on your bank’s card machine is recorded at the till as a card payment; Wave POS does not connect to the card machine itself.
Who needs a POS system?
Any shop where the owner cannot see every sale with their own eyes needs a POS system. That usually means more than one cashier, more than a few dozen products, sales on credit, or more than one branch.
It suits supermarkets and mini-marts, hardware stores, pharmacies, agrovets, boutiques, wholesalers, liquor stores and beauty shops: any business that sells goods over a counter and needs to know what it has left.
A small kiosk where the owner serves every customer and sells a handful of items may manage with a book for now. The moment you hire your first cashier, or open a second shop, it is worth looking again.
Signs your shop has outgrown the cash book
You have outgrown a cash book when finding out what happened takes longer than fixing it. These are the usual signs:
- The cash in the drawer is often short, and you cannot tell which day or which cashier.
- Checking M-Pesa at the end of the day means an hour of scrolling through messages.
- You find out a best seller is finished when a customer asks for it.
- You do not know which products make money and which only take up shelf space.
- Customer debts live in a notebook, and the totals are disputed.
- You have opened, or want to open, a second branch in another town.
- You cannot leave the shop for a day without worrying about what is happening there.
If three or more of these sound familiar, it is time to look at a POS system. If your records are in Excel today, moving from Excel to a POS shows how to bring your products across without typing them again.