Modern Retailer Technology Guide Part 1: POS and Accounting

by Dhiren Bhatia / February 19, 2020

Running a retail store these days can feel much different than it did ten or even five years ago.

Ecommerce has completely upended the traditional brick-and-mortar retail model. Retailers are still thriving, of course, but they’re doing so in spite of competition from ecommerce — or perhaps because of the new opportunities that selling online gives them.

In the midst of these changes, plenty of digital technology tools have emerged to handle the needs of retailers that want to sell both in-store and online. 

These tools can even track inventory and sales across all channels in real-time. They can run sales and discounts, combine items into groups for sale, and connect effortlessly to other apps that help run and promote your store efficiently. These digital tools also provide reports that can provide instant insights into the health of your entire operation.

Retail technology aims to make the job of store ownership easier and less risky — and it’s good at what it does.

In fact, so many software programs are now on the market that it choosing the right combination of programs can be daunting. Software costs can be significant, and making changes once you’ve settled on certain software can be difficult. It pays to make the right choice from the outset.

That’s why we wanted to provide retail store owners with a complete guide that explains exactly which technology retailers need, and how all of those tech components can fit together to build a comprehensive retail system.

In our retail technology guide, we’ll cover:

  • Point of sale systems
  • Accounting systems
  • HR and scheduling systems
  • Analytics and dashboards
  • Loyalty programs
  • Gift card programs

Point of Sale 

The first technology tool that you need to choose for your store is the point of sale system. 

A POS system, of course, refers to the hardware and software you use to accept payments. However, today’s cloud-based systems are much more complex (and useful) than the simple cash registers of the past. 

Thanks to cloud technology, POS terminals can sync with each other continuously so users can understand how their entire store is doing financially in real time. 

POS systems also come with a host of other features that form the backbone of your store’s technology suite. Your POS system should connect with almost all of your other tech tools to give you the complete insights you need to run your store. 

Some retail POS programs, including Vend, Revel & Lightspeed, are subscription-based, meaning you pay a flat rate per month per terminal or per store location. Other programs, such as Shopify, charge a flat monthly rate plus a small percentage of each transaction and a small flat fee per transaction.

A Few Features to Look For in a POS System

Here are a few of the primary features that each retailer absolutely needs in a POS system. 

Ecommerce / Omnichannel Sales

It wasn’t long ago that retailers needed separate programs for their web stores and in-store sales. However, these days, a POS system should handle sales from all channels in the same system. This is called omnichannel retailing. 

In addition to having the same products and inventory available in both channels, your POS should also give customers the ability to do the following things:

  • buy online and ship to their homes
  • ship their purchase to a store location
  • pick up their purchase in the store
  • transfer a purchase from one store location to another

Your customers should also be able to see their full purchase histories, including both online and in-person transactions, in the same place. That includes all returns, refunds and store credits, from all channels. (This info is expected by the customer, but it’s also very helpful on the business end, such as for customer service and marketing purposes.)

Finally, as we’ll discuss in more detail later, administrators should be able to apply things like special promotions, marketing campaigns, loyalty programs, and gift cards to their stores both in-person and online.  

Inventory management

We all know the basics when it comes to inventory: Your POS system should deduct inventory as it’s purchased and send alerts when levels get low. But once you start selling a lot of products with a lot of different attributes, you’ll need a more robust inventory system. 

Sophisticated POS systems make it easy for users to keep their inventory updated with stock and auto-fill options. They enable administrators to order more stock, assign different characteristics and attributes to products, assign SKUs, and apply barcodes to products for quick checkout and easy counting. 

They also allow managers to combine different individual products together for sale as a group (called “composites”). Managers should also be able to create sales and discounts easily for specific products or products with certain characteristics.

Inventory reports should stay updated across all channels in real time. Omnichannel inventory will ensure that you don’t accidentally oversell an item that isn’t actually in stock, for example. 

Inventory counting and reconciliation

Inventory tracking software can keep a fairly accurate estimate of inventory as it’s purchased, but it’s still necessary to occasionally double check inventory counts to make sure that the quantities match what the software shows. 

Inventory counts can be inconsistent for a number of reasons — accounting mistakes, operational errors, and losses from theft or damage are a few of them. 

POS software with the right inventory features can help make these counts easier. 

Many retailers opt to reconcile portions of their inventory throughout the year instead of counting all of the inventory at once. Some software, such as Vend, comes with a “partial count” inventory feature built-in. Others, such as Shopify, require you to add a cycle counting app for the job. 

Learn more about inventory counts in this post: Which of These Inventory Reconciliation Techniques is Right for Your Business?

Stock transfers and multi-store management

Larger retailers with more than one location or a product that goes through a complicated inventory process need yet another level of inventory features. They need POS systems that let them track inventory through the processes of shipping, warehousing, and distribution.

These advanced inventory features allow users to manage multiple locations and move stock between stores and warehouses. 

Omnichannel inventory software that supports multiple locations should also be able to let your employees (and your customers) know exactly where your products and supplies are in any given location or channel.

Special inventory reports 

Reporting is a key feature for any POS system, but some systems have more robust reporting systems than others. 

We’ll discuss more about the analytics and dashboards you should be looking for later in this ebook. But as far as inventory is concerned, you should be looking for a system that can produce key reports such as a sell-through report and average ticket value.  

POS Hardware Needs 

In addition to the software itself, you’ll need to invest in the hardware the POS system requires to work. Even though today’s cloud-based software doesn’t “live” primarily on its hardware (instead, it’s accessed via the internet from a remote server), you’ll still need the following tools to make sure your system works properly. Specific hardware requirements will vary based on the type of software you choose. 

You’ll need:

  • Barcode scanners (USB or Bluetooth)
  • Receipt printers (come in wired or wireless options)
  • Cash drawers
  • PC / Mac-based, iPad based (Which usually includes online & offline functionality

Examples of Omnichannel POS Software for Retailers

  • Lightspeed Retail
  • Vend
  • Revel
  • Shopify POS
  • Square 

Accounting

You can’t keep your business’ doors open if you can’t stay profitable, and you’ll never know whether you’re profitable without keeping careful financial records of money as it’s spent and as it’s received.

Thankfully, there are plenty of software programs on the market that automate the jobs of bookkeeping and accounting for retailers.

The most important feature to look for in an accounting program for your store is its integration with your point of sale system.

With a solid integration, your POS software can send the transaction data directly to the accounting software. This means you’ll get real-time reports with no need for manual reconciliations or spreadsheets.

Here are a few of the ways your point of sale software and accounting software should share data to make things easier for you:

  • Transactions and totals, including details about payment types, cash transactions, and loyalty and gift card use, should be sent from your POS system to your accounting system automatically.
  • Cost-of-goods-sold (COGS) from your POS is updated in real time in your accounting system.
  • Any purchases that require invoices should create those invoices automatically in your accounting system.
  • New inventory orders should show up in your accounting software as accounts payable invoices.
  • Product codes should sync from POS to accounting.
  • Accounts created in the point of sale system, such as those for customers and suppliers, should be automatically created and updated in the accounting system, too.

These integrations make it much easier for managers to track profitability and assess liabilities and expenses. They can also identify potential financial problems or errors quickly. Reports can draw on data across both programs for better insights on employees, customers, products, and more.

But integration provides more than helpful insights. It also eliminates errors and saves you and your staff hours of time that would have been spent producing reports and transferring data manually.

Examples of Common Accounting Programs That Integrate With Retail POS Systems 

  • Xero
  • Quickbooks
  • Freshbooks

Although the POS, inventory, and accounting are a huge part of what retail technology specializes in, that’s just the beginning.  Click here for  Part 2 of our Modern Retailer Technology Guide, where we’ll dive into technology for managing your staff, and your customer relationships, and more.

Tags: Cloud Technology Retail Tips POS Accounting
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