What is a point of sale (POS) system?

A system is a point of sale system when it can enter a sale, calculate the amount due and save a record of the transaction. The job it does defines it, rather than the way the device looks - and that job can run on dedicated retail hardware or through an app on a device you already own.

The easiest way to understand a point of sale system is to look at the connected jobs around a sale:

Not every setup needs every part, which is why two setups that look nothing alike can both be POS systems. A mobile service provider may need only a phone, POS software and a way to take payments. A busy retailer may need several checkout stations, scanners, printers and shared stock information.

Learn more about the components and features of a point of sale system.

A point of sale system records what you sold, takes or records the payment and turns that record into stock counts, staff activity and reports.

Runs the checkout
Your staff can select or scan products, add services, change quantities and calculate the total amount owed by your customers. Depending on the system, they may also apply discounts, add tips, split a bill or process a return.

Records payment methods
A point of sale system can record cash, card and other supported payment methods. When it connects to a payment terminal, the total and payment result may move between the two automatically. That can reduce manual entry, but the connections on offer vary.

Keeps a sales history
Each completed transaction can add to a searchable record of sales. You can see what was sold, when it was sold, how much the customer paid and how the payment was recorded.

Updates stock
If stock management is included and set up correctly, the point of sale system can reduce an item's recorded quantity when it sells. That helps you spot low stock, compare expected stock with a physical count and see which products are moving. A point of sale system’s stock count is only as accurate as the information entered.

Organises staff activity
Individual staff profiles can show who opened a sale, applied a discount or used a particular checkout device or till. More advanced systems may include permissions, shifts, time tracking or performance information.

Creates reports
Point of sale system reports turn transaction records into totals and comparisons you can act on. You may be able to see sales by day, product, payment method, staff member or location. Read what a point of sale report is [/za/knowledge-hub/learn/what-is-a-point of sale-report/] and how to use one.

Connects to other business tools
Some point of sale systems connect to accounting, ecommerce, loyalty, delivery or customer-management tools. An integration can reduce duplicate data entry, but it doesn’t mean every field or action will synchronise. Check what the connection sends, how often it updates and what happens when it fails.

A point of sale system works by capturing the details of a purchase, calculating the amount due, calculating the amount due, recording or requesting payment and saving the completed transaction.

A typical sale follows five stages:

1. A staff member scans or selects the products or services.

2. The point of sale system applies the saved prices and calculates the total.

3. The customer chooses how to pay.

4. The payment is recorded or electronically authorised.

5. The sale is saved and connected records are updated.

For a cash sale, the point of sale records the payment and calculates the change. For a card sale, a payment terminal sends the transaction for authorisation. The point of sale system and payment terminal may be separate, connected or combined in one device.

Once the sale concludes, the transaction feeds into stock counts, end-of-day totals and sales reports.

To learn more about how a point of sale system works.

No, a card machine accepts electronic payments, and a point of sale system records what was sold and helps you manage the information around the sale.

The difference is hard to see because some modern devices do both jobs, and a handheld terminal might run point of sale software and accept a tap payment on the same device.

You need only a card machine if you know what to charge and just need to take payments. You need a point of sale system when you want a structured record of products, stock, staff or sales.

No, a cash register stores cash and records basic transaction totals, and a point of sale system runs the full sales process in software. It also records more detailed sales information.

A cash register could be sufficient if you only take cash, have a small product range and simple reporting needs. A point of sale system is useful when you want to see what sold, connect sales to stock or manage information across staff and locations.

Point of sale systems can be grouped by where they run, where they store data, and how you use them. These categories overlap - a system can be cloud-based, run on a tablet and work at a counter all at once.

Countertop point of sale systems

A countertop system stays at a fixed checkout point. It typically includes a touchscreen, card machine, cash drawer, scanner and printer. Use this if you complete most sales at a till or service counter.

Handheld and mobile point of sale systems

A handheld or mobile point of sale lets staff take checkout to the customer. It suits restaurants, queues, markets, events, deliveries and services at different locations. A mobile point of sale may be an app on a phone or tablet, while a handheld point of sale is usually a dedicated portable device. 

Tablet and phone-based point of sale systems

Some point of sale software runs on your phone or tablet. This gives you a familiar interface and a flexible starting point. Check device compatibility, operating-system requirements, battery life and support before you buy.

Cloud-based point of sale systems

A cloud-based point of sale stores or synchronises business information online. You can view sales from any connected device, and updates roll out across locations easily. Cloud-based does not always mean every function stops without internet access. Offline features and functionalities differ between providers. 

On-premise point of sale systems

An on-premise system stores data on computers or servers at your business. You get more local control, but you manage updates, backups and technical support yourself. Some systems combine on-premise and cloud-based storage.

Online and omnichannel point of sale systems

An online business uses checkout software instead of a point of sale hardware. An omnichannel setup connects sales across your shop, website and social selling channels. 

What a point of sale system has to handle changes with what you sell, and the kind of sales you make - from barcodes and stock counts in retail to tables and split bills in a sit-down restaurant. The system that suits you is the one that handles your sale the way you actually sell, rather than the one with the longest feature list.

Not every business in a category needs all of these, and what you get varies by provider and by plan. A small menu, a one-person team or low transaction volume can make a simpler setup the better choice for you.

A point of sale system that suits your workflow gives you a clearer sales record, less repetitive manual admin, faster checkout, better stock visibility, more useful information for decisions and a setup you can add to.

A clearer sales record. The system captures transaction details as sales happen, which is more reliable than rebuilding the day from slips, notes and memory.

Less repetitive admin. The same sale can contribute to checkout totals, payment breakdowns, stock records and reports instead of being entered more than once.

Faster, more consistent checkout. Saved products, prices and options mean your staff don’t need to remember every amount or work out each total by hand.

Better stock visibility. When stock is connected to sales, you get a more current view of what should be on your shelves and what may need attention.

More useful decisions. Decisions get easier when you can see sales by product, time, location or staff member, which is what you need for ordering, scheduling and judging whether a promotion worked.

A setup that can grow. Some systems let you add devices, users, locations or integrations as your needs change.

None of it's automatic. It depends on choosing a system that suits you, setting it up properly and using it every day.

A point of sale system can improve your records, but it cannot run your business on its own.

It can’t:

• Fix incorrect prices, products or stock quantities entered during setup.

• Record a sale that a staff member never puts through the system.

• Prevent every mistake, theft, return problem or stock difference.

• Replace physical stock counts and sensible stock controls.

• Guarantee that third-party integrations will always synchronise correctly.

• Replace full accounting, payroll or tax advice unless those services are specifically included.

• Decide what to buy, what to sell or how many staff you need.

• Keep every feature running through a power or connectivity interruption.

Your reports only show what the system has been told, so a clean setup, staff training and regular checks matter as much as the software.

A point of sale system costs you for the software, the hardware and the fee on accessories, connectivity, setup and support, growth and switching.  Compare the full cost of running the setup over time.

A low hardware price can still add up to a high running cost once the software, the payments and the support are counted, and a feature-rich setup can charge you for capability you never switch on. Start with the workflow you need, then compare options that suit your needs best.

Not every small business needs one straight away. A few straightforward sales may be manageable with a card machine, receipt book or spreadsheet.

A point of sale system becomes more useful when the manual process starts hiding information or creating repeated work. Common signs include:

• You know the day's total but not which products or services produced it.

• Stock differences are discovered too late.

• Your staff remember prices or work out totals by hand.

• Cash, card and recorded sales regularly fail to match.

• Creating a weekly or monthly sales view takes hours.

• More than one person, device or location needs access to the same information.

• You are adding products, sales channels or locations.

Your starting point can still be small. Begin with one device and core sales features, then add capabilities when there's a clear need.

Along with features, check the total cost in Rand, how your customers prefer to pay, when your payouts land, what happens during load shedding, what support you can reach while you trade, and what the contract says about ownership and your data.

The total cost in rand. Understand the hardware, software, payment, connectivity and support costs, and whether prices may change with usage or added features.

How customers prefer to pay. Check which payment methods are supported and whether they connect directly to the point of sale system or have to be recorded separately.

Payouts and reconciliation. For electronic payments, find out when funds are paid out, where transaction records appear and how they can be matched with sales.

Power and connectivity. Ask what happens during a power cut or loss of data, how long devices can run on battery and which functions need to reconnect.

Local support. Check support hours, contact methods, repair or replacement processes and whether help is available during the hours you trade.

Ownership and contracts. Know whether you are buying or renting the hardware, how long any agreement runs and what happens if you switch provider.

Data access. Find out whether records can be exported, who owns the data and which access remains if a subscription or contract ends.

Payment security. If you accept cards, understand your own responsibilities and use providers and equipment that follow relevant payment-security requirements.
The PCI Security Standards Council provides guidance for merchants.