A point-of-sale (POS) system provides you with tools to efficiently ring up sales, accept payments, manage your inventory, and build customer relationships. So, while learning how to navigate new technology can be overwhelming, taking the time to learn how to use a POS system is crucial if you wish to maximize its full potential.

Key takeaways

  • As a business owner, you will need to understand both the setup procedures and available functionalities of your POS system.
  • Modern-day POS systems vary from simple to complex setups depending on the level of customization you need.
  • When used effectively, a POS system will help you save time, reduce errors, and make data-driven decisions.

How to use a POS system

Learning how to operate a POS system varies depending on your industry and the type of POS system you have, but the core functions remain similar:

  1. Process transactions: Ring up sales by scanning barcodes, selecting items from a menu, or manually entering prices.
  2. Take payments: Accept multiple payment methods, including cash, credit and debit cards, mobile payments, and gift cards.
  3. Print or send a receipt: Provide customers with a printed receipt or email a digital copy. 

Industry-specific POS systems come equipped with specialized features and tools tailored to the needs of different business types. Below, we explore how to use a POS system effectively in retail, restaurant, and hospitality settings.

Also read: 

Using a POS system in retail

Retail POS systems are designed to handle high sales volumes, track inventory in real time, and manage customer data efficiently. Square for Retail is a popular POS system for retail businesses.

Here are some of its features and tools that cater specifically to the needs of retail companies:

Inventory management tools: Track stock levels in real-time, set automatic restock alerts, and categorize products for easier management. Advanced POS systems can also suggest reorder quantities based on sales trends.
CRM software collects and store customer data.
Customer relationship management (CRM): Collect and store customer data, track purchase history, and offer personalized promotions. Built-in loyalty programs help encourage repeat business with rewards and special offers.
Omnichannel capabilities: Integrate in-store and online sales to create a seamless shopping experience. Sync inventory across all channels and fulfill online orders directly from store stock.
Shifts and schedules of team members in Old Fourth Ward.
Employee management: Track employee hours, sales performance, and commissions. Some systems include scheduling tools and time clocks directly within the POS.

In my over seven years of evaluating POS systems, I found Square, Lightspeed, Shopify, and Clover consistently stand out for retail businesses.

Also read: 

Using a POS system in restaurants

Restaurant POS systems are designed to optimize order management, kitchen communication, and customer service. Here’s how Toast, a top restaurant POS system, can handle the complexities of a restaurant operation:

Order management and kitchen display system showing orders at the counter directly into the kitchen.
Order management and kitchen display systems (KDS): Orders taken at the table are sent directly to kitchen displays. This helps improve order accuracy and speed up preparation.
Table and floor management: Visual floor plans allow staff to monitor table status, manage reservations, and optimize seating arrangements in real-time, reducing wait times and enhancing the guest experience.
Menu management: Update menu items, change prices, and mark items as out of stock in real time. Special features include seasonal menus, modifiers, and combos that can be easily configured within the system.
Integrated payment processing: Accept payments at the table with handheld devices, split checks, and process tips efficiently. This speeds up the payment process and enhances customer satisfaction.

Expert Tip

When choosing a POS system, consider your requirements during peak hours. I recommend systems with at least 8GB RAM and a solid-state drive when ringing up multiple items and processing orders from more than one terminal during the lunch rush.

Discover: The best restaurant POS systems.

Using a POS system in hospitality

Hospitality POS systems are designed to enhance guest services and streamline operations across different areas of a property. Here’s a quick look at how a popular POS system, OPERA Cloud, makes hospitality management seamless:

PMS integration: Link your POS with your Property Management System to manage room charges, restaurant orders, and other on-property services on a unified platform, simplifying billing and checkout.
Opera Cloud sales management platform.
Multi-outlet management: Manage multiple outlets such as restaurants, bars, and gift shops from a single system. This centralization helps track sales and inventory across all areas of your property seamlessly.
Mobile POS solutions: Integrates with the main POS system, allowing you to offer services anywhere on the property with mobile POS devices, allowing staff to take orders or process payments poolside, at events, or in lounges for a more personalized guest experience.
Guest profile and loyalty integration: Access guest preferences and loyalty information directly through the POS, enabling staff to provide tailored recommendations and enhance the overall guest experience.

Expert Tip

Set user-based permissions for your staff.  When you give every employee full access by default, mistakes can happen. I recommend setting up cashier, manager, and admin roles from the start to keep things tight.

Using a mobile POS system

A mobile POS (mPOS) system is an app-based POS software that can run on a smartphone or tablet and accept payments with a connected mobile credit card reader. Unlike mobile POS devices connected to a traditional POS system, an mPOS is purely mobile. 

Here’s how businesses can run their business from a mobile device.

Transaction processing: Access inventory and ring up a sale on a mobile device wherever you are. Some POS providers, like Toast, support a purely mobile system. (Source: Toast)
Mobile card reader: Connect a mobile credit card reader with your smartphone or tablet to start taking swipe, chip, or NFC payments. Mobile card readers, like those of Clover, are convenient and reliable without the high price point of standalone handheld POS devices. (Source: Clover)
Generate invoices: Prepare invoices from your smartphone or tablet. Providers like PayPal will allow you to access your product catalog and build customer profiles anywhere you work — perfect for professional services such as landscaping, HVAC, training coach, and more. (Source: PayPal)
Send digital receipts: Create a receipt template from the settings. Once you receive payment in-person or from an invoice, you can send a digital receipt to the customer’s email address or via SMS. Some handheld POS systems also have options for printing a thermal receipt directly from the device (Source: PayPal)
Manage inventory: Your mobile POS system will allow you to upload, add variations, and update product listings from your mobile device. Some providers, like Square can also include features that allow you to conduct physical stock counts. (Source: Square)

Expert Tip

A 2D scanner future-proofs your setup and improves checkout flexibility. Basic 1D scanners work fine for UPCs, but I’ve found 2D imaging scanners (that can read QR codes, mobile coupons, and even damaged labels) more versatile.

Learn more: 

Using a POS system with an integrated e-commerce platform

Most POS systems nowadays can seamlessly manage both in-person and online sales with an integrated e-commerce platform. To illustrate, let’s take a look at the leading omnichannel POS and e-commerce platform, Shopify, and its features. 

Here is how to use a POS system with an e-commerce integration:

Inventory management: Your inventory is synced to your online store, so your inventory records will show you real-time availability of each product. This helps to ensure that you don’t oversell or keep selling items that are already out of stock. Set a reorder point and create an alert so you don’t run out of fast-moving products. (Source: Shopify)
Omnichannel capabilities: With a connected e-commerce platform, your POS is capable of providing a seamless multichannel sales experience. Customers can buy online and pick up in-store (BOPIS) or even browse in-store and purchase online (BIPO). (Source: Shopify)
Manage returns: With a physical location, you can handle returns for products purchased from your online store, also referred to as buy online, return in-store, or BORIS. In this example, a boutique that uses Shopify POS in its storefront will be able to access a customer’s online transaction records and process the returns. (Source: Shopify)
Reports management: With an integrated online platform, providers like Shopify can provide you with real-time sales reports that will include online sales performance. You can create filters and customize data to match the insights needed for business decisions. (Source: Shopify)

Expert Tip

Use a unified product catalog. This helps you avoid having to update two systems every time something changes. It’s easier to manage SKUs, pricing, and promotions when your in-store and online systems pull from the same catalog.

How to set up a POS system

Setting up a POS system involves several key steps, from installation to configuration and testing, ensuring it’s fully optimized for your business operations. Here’s a step-by-step guide to help you get started:

Installation and launch

  1. Choose the right hardware: Depending on your business needs, select the appropriate hardware, such as POS terminals, barcode scanners, receipt printers, cash drawers, and card readers. For mobile setups, you might need tablets or handheld devices.

Related: Best POS Inventory Systems

  1. Connect devices: Set up your POS hardware by connecting all devices to the main terminal. Ensure the system is properly wired or configured for Wi-Fi, Bluetooth, or other connections.
  2. Install POS software: Download and install the POS software on your terminal or devices. Follow the on-screen instructions to complete the setup, which may include software registration and user account creation.
  3. Configure your network: Ensure your POS system is connected to a reliable network. A stable internet connection is crucial, especially if your system relies on cloud-based software for real-time data synchronization.

Expert Tip

Organize your hardware and label connections clearly. Color-code and label every cable — power, Ethernet, printer, scanner while setting up your POS system and add this information to your user manual. This will save you hours during troubleshooting later on.

Setting up your system

  1. Customize your dashboard: Configure the dashboard to suit your business operations. Set up categories, buttons, and shortcuts to quickly access frequently used functions like sales reports, inventory management, and customer profiles.
  2. Load product information: Input your inventory data, including product names, SKUs, prices, and tax settings. Many systems allow you to import this data from spreadsheets, which can save time if you have a large catalog.
  3. Set up payment processing: Integrate your POS with payment processors to accept various payment methods. Configure options for credit cards, digital wallets, gift cards, and contactless payments. Test each method to ensure smooth transactions.
  4. Configure tax settings: Enter your local tax rates into the system so they’re automatically applied at checkout. This setup helps maintain compliance and simplifies end-of-day reporting.

Expert Tip

Upload and verify your product database before accepting your first sale. Surprisingly, I’ve encountered businesses struggling with sales and inventory discrepancies a few weeks after using a new POS system. This can be avoided by making sure your inventory information is accurate and resetting any test transactions you made before going live.

Ringing transactions and back office setup

  1. Create user accounts and permissions: Set up user profiles for employees, assigning roles and permissions based on their job functions. This step ensures that staff only have access to the tools and data they need.
  2. Train your staff: Conduct training sessions to familiarize your team with the system. Focus on how to process sales, handle returns, manage inventory, and access reports. Provide hands-on practice to build confidence.
  3. Test the system: Perform test transactions to ensure everything works correctly. Check that sales are recorded, payments are processed, receipts print properly, and inventory levels adjust as expected.
  4. Set up back office functions: Configure back office settings such as reporting, inventory management, and integrations with other business tools like accounting software. Customize alerts and notifications for stock levels, sales goals, or any anomalies.

Expert Tip

Never skip testing your system. I recommend running at least 20 to 30 mock transactions before opening day. Try refunds, split payments, discounts, and receipts to uncover glitches while the pressure’s off.

Final steps

  1. Go live: Once all settings are configured and tested, your system is ready to go live. Monitor the first few days closely to address any glitches or adjustments that may be needed.
  2. Regular maintenance and updates: Keep your system up-to-date with the latest software versions and security patches. Regular maintenance helps ensure the POS continues to operate securely, smoothly, and efficiently.

Expert Tip

Customize your receipt footer. Receipts are free real estate. Use the space to add a return policy, website, or a friendly thank-you message, as these small details build trust and repeat visits.

Also read: How Much Does a POS System Cost?

Best practices when using a POS system

Maximizing the value of your POS system means more than just using its basic functions — it involves leveraging its advanced features and implementing best practices to enhance performance, security, and efficiency. Here are some key tips to help you get the most out of your POS system:

  • Optimize inventory management: Use your POS system’s inventory tools to set up automated stock alerts, track inventory across locations, and generate detailed reports. Regularly monitor inventory data to identify top sellers, manage slow-moving products, and reduce shrinkage. 

Related: Best POS Inventory System

  • Enhance customer engagement: Implement loyalty programs, personalized promotions, and feedback collection features within your POS. Leverage customer purchase history to send targeted marketing messages and create a personalized shopping experience that drives sales and loyalty.
  • Streamline staff management and training: Continuously train staff on POS features, updates, and best practices. Use the system to track performance, manage schedules, and set role-based permissions to secure sensitive data, reduce errors, and enhance staff productivity.
  • Leverage analytics and reporting: Regularly review sales and inventory reports to identify trends, forecast demand, and make data-driven decisions. Customize dashboards to track key metrics, analyze sales trends, and adjust business strategies based on real-time insights.
  • Integrate with other business tools: Expand your POS system’s capabilities by integrating it with accounting software, e-commerce platforms, and third-party apps. These integrations streamline operations, unify sales channels, and reduce manual data entry.
  • Maintain security and software updates: Keep your POS software updated with the latest features and security patches. Implement strong security measures like multi-factor authentication, role-based permissions, and regular data backups to protect your business from vulnerabilities.
  • Customize your system to fit your business: Tailor your POS system’s dashboard, shortcuts, and reporting settings to align with your specific operations. Regular customization improves efficiency and ensures the system adapts as your business evolves.
  • Utilize customer feedback: Collect and analyze customer feedback through your POS system to gain insights into their experiences and identify areas for improvement. Use this feedback to enhance service and operations.
  • Regularly audit system performance: Conduct regular audits to ensure that integrations, payment processes, and inventory tracking are functioning correctly. Address any issues promptly to prevent disruptions and maintain smooth operations.

Also read: 24 Key POS Features You Need

Frequently asked questions (FAQs)

To make a POS transaction, start by adding items to the sale by scanning barcodes or selecting them from the product list on the screen. Once all items are added, select the payment method (such as cash, card, or mobile payment), and follow the prompts to process the payment. Finally, issue a receipt, either printed or digital, and complete the transaction.

POS payment works by processing a customer’s payment through a point-of-sale system when a purchase is made. When the cashier enters the sale items and selects the payment method, the POS system calculates the total, processes the payment through a connected payment processor (card, mobile, or cash), and updates inventory and sales data in real-time. Once the payment is approved, the transaction is completed, and a receipt is issued.

To receive money from a POS transaction, ensure your POS system is set up with a payment processor and linked to your business bank account. When a customer makes a payment, the funds are processed through the payment processor, which then deposits the money into your account, typically within 1-2 business days. The exact timing depends on your processor’s settlement schedule.

A POS system helps manage inventory by automatically tracking stock levels in real time, issuing low-stock alerts, and organizing items by categories and variants. It also provides detailed reports and forecasting tools, enabling businesses to reduce errors, avoid stockouts, and make smarter purchasing decisions.

A growing restaurant requires a more efficient way to manage orders, sales, menus, and ingredients, among other things. Using a restaurant POS system can help automate these tasks to minimize errors and improve customer service.

Yes, most modern POS systems can integrate with tools like accounting software, payroll platforms, e-commerce stores, and customer relationship management (CRM) systems. These integrations help centralize data, automate workflows, and improve overall business efficiency.

Anna Lynn Dizon Avatar
Anna Lynn Dizon
Senior Staff Writer
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Anna Lynn Dizon has over four years of experience in risk mitigation, serving as both a research lead and client liaison. Her fintech journey began at PayPal in customer and technical support, followed by a role in office and finance management for a U.S. company that collaborates with global banks to establish and manage HR and international payment processing. Since 2017, Anna has been a contributing staff writer for Fit Small Business, Technology Advice, and TechRepublic, covering fintech and POS software reviews, payment processing guides, eCommerce, inventory management, business startups, and regulatory compliance.