To be a small business owner is often more challenging than to be the CEO of some big public company. After all, big CEOs have armies of employees at their disposal, most of them experts in their fields. You are, on the other hand, alone or have just a couple of employees or family members to help you. Because of that you must focus on the most important thing to grow your business – bringing new clients and keeping the old ones. And doing that while keeping close eye on the cash flow at the same time. You really do not have much time to deep dive into the accounting, IT solutions, HR practices or all the other things which are important for the big enterprises.
To help you with that you must to have easy, user friendly Point of Sale software, which can be customized to your needs. There are literally hundreds of POS software solutions, so choosing the best one is not easy. While exact Point of Sale software depends on your industry and other needs the most common features it must provide to you are:
- Inventory Management with tracking on SKU numbers level
- 24/7 technical support
- Multi – location and multi – device ready
- Eye-catching, easy to understand reporting
- Unlimited product and orders available for processing
- Employee and payroll management
- Affordable, easy to understand pricing scheme
- No cancelation fees if you decide it to stop using the solution
Other features that quality Point of Sale software can have are:
- Reward and loyalty module for targeting your repeat customers
- Phone and Tablet App
- Label printing feature
- Email and SMS campaigns possibility
While most of the above-mentioned requests are self-explanatory, we will take a closer look at the first two. Because, unlike having or not having employee management, first two requests needs some more time to evaluate. The reason for that is because both Inventory Management with tracking on SKU numbers level and PCI compliance in processing credit cards requests can make your POS software solution practically useless, if not chosen wisely. Those requests should really be tried and tested on your actual business setting and needs before committing to buy the Point of Sale software.
Inventory Management with tracking on SKU numbers level
To explain this request for Point of Sale software we first need to answer one question: what are the SKU numbers? SKU numbers are not UPC (universal product code) numbers and are unique to your business. If several companies are selling the same product that product will have same UPC number in every company. But every company will have different SKU numbers for the same product. Usually, SKU numbers are made of eight alpha-numeric characters, but this is not obligatory.
SKU is short for Stock keeping Unit. One product can have several SKU numbers, depending on how you are tracking your inventory and how you sell it. The easiest way to understand this is by example. Let’s say you’re buying some product (maybe pencils) in bulks from the wholesaler and selling it in retail. So, you buy a boxes of 1000 pencils and decide to sell it in your retail stores. Your customers can buy them from you in packs of 1000, packs of 100, packs of 10, or separately, one by one. Boxes from your supplier will have their own SKU numbers. The important thing to understand is that your supplier’s SKU numbers are NOT your SKU numbers. Your supplier generated them based on his needs and his setting. You will generate your SKU numbers based on your needs and your setting.
Although you receive the stock as one product and one SKU number (a box with 1000 pencils) in your POS software you will probably create 4 different SKU numbers (for 1000 pack, 100 pack, 10 pack and for individual pencils). In that way you will track your inventory based on your needs. For example, you will get 2 boxes with 1000 pencils each and, in your inventory management system, you will enter them as one 1000 pencil box, five 100 pencil boxes, twenty 10 pencil boxes and 300 individual pencils. All of them are, for you, different products with different SKU numbers and you will track them individually in inventory management part of your POS solution. So, quality Inventory management module in Point of Sale software in this example must allow you to create different SKU numbers and allow you to “translate” different SKU numbers from one to another. To change 1 piece of 100 pencil box to 10 pieces of 10 pencil boxes if that is needed. Tracking inventory in that way, by different SKU numbers, will enable you to analyze performance of every SKU and to adapt your selling strategy.
Also, creation of SKU numbers in your Point of Sale software should not be restricted by some hard-coded rule. You should be able to generate them in the way that makes sense to you and your business. Although you can generate SKU numbers randomly using only letters or only numbers this is not advisable. The best practice is to use combination of letters and numbers in a meaningful way. In our example we could generate them like this: XPEN0001. First letter would be name of your supplier (Company X), next three letters would be the indication of product (pen), and four digits would indicate the packaging (single pencil). SKU numbers for 10-pack would be XPEN0010, and same product supplied from Company Y would have SKU number YPEN0010. Keeping the same logic, when you buy notebooks from the Company X you should give them SKU numbers XNOT0001, if you are selling them individually. There are infinite number of ways to generate SKU numbers and important thing is that it makes sense to you. Any POS solution that doesn’t allow you that freedom is not a good Point of Sale software and you should look elsewhere for another solution.
PCI compliance in processing credit cards
Next to the Inventory Management with tracking on SKU numbers level, the PCI compliance is another request for your POS solution that you must spend some time checking out. PCI compliance is not a functionality of POS software that first comes to mind when thinking about acquiring it, but it is important.
PCI compliance means that processing of the credit cards is done according to the Payment Card Industry Data Security Standard or PCI DSS. PCI DSS is, basically, a rule book designed by major credit card brands on how different businesses should process their credit cards. Those rules are designed to improve safety of credit card data. To conduct your business according to PCI compliance requirements you must process, store, or transmit any credit card information in a safe way, thus protecting credit card holders and issuers. Potential problem is that PCI compliance requirements could be different for every credit card issuer and every merchant. So, when doing your homework on which POS solution to implement one of the most important things is to check if Point of sale software you want has PCI compliance covered and for which card issuers. You certainly don’t want a situation that you covered PCI compliance only for Visa if you’re accepting Amex cards from your customers. If you are not using POS software for processing credit cards you will have to use credit card processor. In that case you must pay PCI compliance fee. PCI compliance fee can be annual or monthly.
Although PCI compliance is not a legal requirement, businesses which do not have PCI compliance covered are in danger of fines and lawsuits. And those fines are not joke either. They could be up to $10.000 per month and half a million of US$ per incident. Furthermore, for businesses without PCI compliance their ability to take and process credit cards can be revoked by the credit card issuer, thus damaging their business even more.
Many small business owners make a mistake thinking that their business is too small for PCI compliance, but this is terribly wrong. They try to avoid PCI compliance fee and that can leave them open to the class action lawsuits and lead them to bankruptcy. There are even situations where the credit card processor (this is not a POS provider) is charging you noncompliance fee. That means you don’t save any money on PCI compliance fee and are open to the lawsuits. Your credit card processor should give you all the information on how to become PCI compliant.
But, pay close attention if your credit card processor tries to sell you Data Breach insurance. As always with insurance policies, devil is in the details. Read all fine prints and small letters to see if credit card processor will cover you in case of data breach.
If you are paying PCI compliance fee your credit card processor should advise you how to become and how to stay compliant. If you are unhappy with their support, you can always change the credit card processor.
If all that talk about PCI compliance is made your head spinning there is, of course, the easier solution. And that is a quality Point of sale solution. In that case POS provider will handle all that is necessary to process credit cards according to PCI compliance. It will also have PCI compliance covered for all major credit card issuers. As mentioned before, most of the time you will not even have to pay the PCI compliance fee, because it will be included in the price of Point of Sale solution.
Which Point of Sale Software to use
One Point of Sale software that has all the features we talked about in this article and is best suited for small businesses is www.octopos.com. Octopos has PCI compliance covered and has inventory management feature to track your stock by SKU numbers. Besides credit cards, their solution also accepts Debit, EBT Apple Pay and Android Pay payments, so you won’t lose any customers. They have custom made POS solutions for grocery stores, retail stores, liquor stores, convenience stores and for other small businesses. You can integrate Octopos to your ecommerce business on numerous platforms, including Amazon and Shopify. Different marketing campaigns are available, including loyalty and reward programs, email, and SMS campaigns. Dashboard reports are made in real time and are very easy to understand and analyze your performance. If using Octopos those reports will be your most important source of data for making business decisions, and you can drill down data to the customer level. Technical support is available 24/7 and you can reach them by phone, email, or chat. As a business owner you know that slow checkout lines are major reason for customer dissatisfaction. Octopos can even help you with that. Their innovative numpad solutions will increase your checkout speed up to 30%, making your customers happier and increasing the number of daily purchases, keeping the cost of staff flat. Their POS solution comes with the Phone App and you can use it across multiple locations and multiple devices. Octopos is cloud-based solution, which enables you to access your business documentation from anywhere. All hardware needed for your daily operations are offered by Octopos, including Barcode scanners, Printers, Scales, Payment Terminals, Tablets and so on. Payment terminals can also work offline without any downtime. Printing labels and price tags is also included in their Point of Sale software. All these features are making it your one-stop solution for completely running your whole business process. From ordering and inventory receiving to closing the sale and taking the payments. Employee management is also included where you can create and maintain data about your employees and track actual hours worked for every employee. If you compare that with actual sales data for every employee (also available) you can make some serious decisions about salary increasing or decreasing or about possible promotions.