What Are the Processes Involved in A Point of Sales System?

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POS or point of sales system is a vital component that each retailer ought to have in place. They represent an essential part of the business when it comes to completion of transactions. Overall, the system is responsible for registering all the items that have been purchased, calculating all the totals, processing the payments, as well as maintaining your inventory.

The processes work differently when it comes to a debit card, credit card, and cash payments. However, a POS acts as the final step in terms of completing any given transaction.

Point of Sales Systems

When your customers approach you to complete their transaction, you will most likely use a cash register or computer system when collecting the necessary information. You can either use a barcode scanner to enter the information or enter it manually.

The POS will then proceed to retrieve product description and pricing from your database. Depending on the system in use, the item may be deducted from your inventory automatically. Once you indicate that all the products have been registered, the subtotal will be calculated for you, and the applicable taxes applied as well.

How are Payments Processed?

If your client chooses to make a cash payment, you have to register the amount in the system. Your POS will accept the currency indicated, calculate the totals, and return any difference present.

If a check is offered as a mode of payment, you could choose to accept it as a cash substitute. This would require you to deposit the check in your bank later. Alternatively, you can choose to deposit the check using the check depositing feature that is in your POS.

If the check processing feature is present, your system will read the routing number and the account numbers from the check. The information will then be submitted to the Automated Clearing House (ACH) network so that it can be settled.

Processing of Credit Cards

For debit and credit cards, you are required to swipe the provided card through the magnetic card reader. The reader will typically be attached to your point of sales system.

The information from the POS will then be bundled together with the card information and transmitted to the appropriate network for processing. The client’s bank will then either accept or decline the transaction depending on whether the card is loaded.

Once a transaction goes through, the customer’s bank will return a response, which will then be displayed on your POS.


 Additional Reading: Step By Step Guide To Managing Inventories Using A POS System