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The TOP Most Important Consideration When Choosing POS Software

- By Bob Twain

The most important (and practically the only thing) to consider when choosing a retail POS software system is your...

      Return on Investment (ROI)

This should drive your entire evaluation process.

How do you determine which POS system will give you the HIGHEST return on investment?

Well, there are plenty of factors that determine your ROI, but let's first look at "HOW" your POS and accounting software will give you a return.

It can be broken down into 3 simple categories:

  1. Your POS software will reduce expenses.
  2. Your POS software will increase sales.
  3. Your POS software will increase your gross profit margin.
Thinking about it in this simple fashion helps you determine an accurate ROI and also helps prioritize your needs. Just by making small improvement in these three areas you can put a lot of money in your pocket.

So you should ask yourself...

How will POS software reduce my expenses?

To get the little hamster running, here are a few possibilities:

  • Improve your overall efficiency and keep payroll expenses down by reducing paperwork, calculating sales tax in seconds, and finding sales history almost instantly.
  • Reduce inventory costs by tracking sales accurately and using a more scientific ordering method.
  • Integrate your accounting and lower the fees you pay your accountant.
How will POS software increase my sales?

A couple ideas include:

  • Use the customer list in your software to send targeted and high converting direct mail messages. Send "thank you notes" to best customers. Send add on suggestions to customers that bought a certain widget. The possibilities are endless.
  • Track lost sales so you stock the right products and increase overall sales.
  • See which products are best sellers so you stock the right merchandise and improve store appeal. Remember, your inventory is what defines your store. If your customers see what things they like they'll come back. If they don't, they probably won't come back.
How will POS software increase your gross profit margins?

A few more ideas include:

  • End of day sales reports can show your exact profit margin for the day and help you easily figure out why you're missing your target. Simply by drilling down into low profit margin areas will help you reach your goals and increase profit margins on a daily basis.
  • Centralizing pricing in the computer makes it easier to keep your pricing consistent. Also, customers don't question prices if that's what the computer says.
  • Monthly and yearly sales reports can show you which product lines give you the highest profit margin. With this knowledge you can drop lines with low profit or simply move the high margin stuff in easier-to-see areas.
There are countless ways a POS system can make you more money and improve efficiency. The data in your POS software gives you knowledge, and we all know that knowledge is power.

The Big Picture

Now that you're beginning to think in terms of your return on investment you can start to throw in other factors that will affect your decision. Those factors include:

  • Cost of the POS software
  • Ongoing fees
  • Reliability of the software
  • Training available
  • Quality of the company providing you with support and service (this is important)
Many of these factors are intangible but you should attempt to incorporate them into your decision-making process.

For example, the reliability of the software can affect your ROI. If the computer goes down all the time, you will waste time and money.

If the company doesn't provide you with good training and prompt technical support, you will lose time and money.

Do your best to determine which POS system will give you the highest ROI. Because in reality, that's the only thing that's important. When you stop to think about all the important characteristics of a POS system (ease of use, reliability, and so on), they all affect your ROI.

A flashy name or feature might sound appealing… but if it doesn't affect your ROI, who cares?

To your success!


Bob Twain is the president of Strategic Technologies, LLC. He provides tips and advice about retail POS software at http://www.possoftwareguide.com




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