Inventory management is essential to any retail business. Mismanaging your inventory can affect your overall productivity and profitability. In fact, you can’t sell anything if you don’t have any clue where your products are, how many products you have or where they are supposed to be sent out. Read on to find out how you can efficiently manage your inventory for your retail business through a POS system.
What is a POS System?
A Point of Sale system or simply POS, processes card payments for any product purchased at a retail shop, restaurant or even in an online store. It acts as the central component for your business, comprising essential aspects of your company such as sales, inventory and customer management. A POS system often includes a barcode scanner, cash flow, credit card reader and receipt printer. It is a network that records sales transactions and integrates with payment processing services.
What is POS for Inventory Management?
A Point of Sales (POS) inventory management system can do so much more than just listing the products you sell. It streamlines both inventory tracking and purchase ordering. A POS inventory management system allows businesses to virtually have more than just one business location and track inventory in real-time without the need to be physically present.
What are the Advantages of Using a POS Inventory Management System in a Retail Business?
A POS inventory management system provides businesses with an accurate view of their stocks as well as which product sells the most. With this, costly inventory mistakes can be avoided.
Here’s a list of four major advantages of using a POS inventory management system in a retail business.
1. Monitor inventory
A POS system provides business owners with transparent inventory tracking regardless of the number of stores they have. Since POS terminals on different locations are tied into the business’ accounting and inventory systems, owners won’t need to be on-site to check the stocks available.
Optimising your inventory through an excellent POS system will enable businesses to handle more products, allowing them to increase the number of SKUs. With more products and stocks available, businesses can have more chances on increasing their sales.
2. Automate purchase ordering
POS inventory management software can help automate the purchase ordering process by sending you an alert once your supplies have depleted below a specific threshold.
3. Track sales trends
A POS system comes with essential reporting tools that allow business owners to easily identify which items are moving and which are not making progress. Depending on your needs, this data can be filtered either by week, by month or by year. With this information, businesses can easily adjust their purchase ordering to put their hot items in stock whenever customers want to purchase them.
4. Improve cash flow
An inventory that doesn’t work efficiently is a waste of time and resources. A POS system ensures that excess inventory situations are well taken care of. By stocking the right amount of products, a POS system can help lower costs and improve cash flow.
Which Businesses Use POS Inventory Management Systems?
Tracking inventory is significantly important in retail. As such, retail businesses are among the most popular users of POS inventory management. In most cases, POS systems are used by retailers for efficient use of data. Apart from this, POS systems also feed in a company’s sales, accounts receivables as well as returns and exchanges.
Aside from retail businesses, restaurant businesses, specifically the fast-food industry, use the POS systems efficiently. POS systems for restaurant businesses are designed to handle customer-owners, processing payments and assist in drive-through windows.
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