Business owners need to think carefully and constantly about how best to meet their business needs. Whether it’s a large or a small business, finding the best way to process payments is an essential part of business management — and for many, it’s a toss-up between a traditional cash register and a point-of-sale system (or POS system).
There are a few key differences between a basic cash register system and a POS terminal, and one may be better suited to a particular type of business than another.
To help you figure out the best option for you, we’ve put together this comprehensive guide to POS systems vs. cash registers.
Cash registers and POS systems both allow cashiers to take and process payments in exchange for goods or services. POS systems can also have self-service capabilities. Let’s take a closer look at each of these options.
Cash registers are simple machines used to process payments for restaurants. Cash registers usually consist of a few components:
A cash drawer
A barcode scanner
A receipt printer
They can also be equipped with a credit card reader to allow for payments by card.
Basic cash registers may have limited functionality, but they can usually take payments and process refunds as standard. Most cash registers can accept at least one or two different payment methods, such as cash, credit card, or gift card.
A POS system is like a more high-tech cash register, but it usually has several additional features.
POS hardware usually takes the form of a touchscreen device, such as an iPad or other type of tablet, or a large freestanding machine — think of those large self-service kiosks you may have seen in McDonald’s.
A staff member will ring up the order and process the payment on the POS system, just like they would on a cash register. Alternatively, the customer can place their own order, as some POS systems also feature self-service functionality. The devices typically have card payment integration as a standard feature but not all of them have a cash drawer.
As well as processing payments, POS systems have several more advanced features and integrations. For example, some POS companies can connect a business’s device with their accounting software to produce sales reports and analyze customer data. They can be used for employee management, customer support, and even online ordering.
When it comes to POS systems vs. cash registers, the main difference is that a POS system has more features. POS systems also run on software that can easily be updated. As service trends come and go, this makes it easier to update your restaurant’s system for processing payments and managing customers.
Most of us will be very familiar with cash registers, as they’ve been used in retail shops and restaurants for decades.
Modern POS systems are a more recent digital innovation, and there are several different types: They can be large and complex machines, like those we’re used to seeing in fast-food chains or large grocery stores, but there are also simpler, tablet-based systems available. These can let smaller businesses make the most of the advantages of POS systems without the substantial upfront costs of a large freestanding kiosk.
There are several pros and cons to both cash registers and POS systems.
Thanks to the simplicity of cash registers, they are straightforward to use, with little to no set-up time. In addition to this ease of use, they are normally cheap to run, with no ongoing costs for software.
Another benefit of cash registers is that they’re simple. You won’t need to train staff on a high-tech system, as they’re pretty much self-explanatory to use.
However, a significant downside of cash registers is that they have limited features. Aside from processing payments and printing receipts, they can’t usually link up with accounting software or be used to track inventory.
Cash registers are also static, so it’s not easy to move them around. For many businesses, this won’t be a problem, but if you run a food truck or want a more portable system, a cash register might not be the best fit.
A POS system is more than just a payment processor; it has extended features that integrate seamlessly into the payment station. The very best POS software can help entrepreneurs make business decisions. They may be able to:
Run reports
Track inventory
Use built-in marketing tools
Integrate customer loyalty programs
In addition to these features, POS systems that run on hand-held devices, like tablets, are easily portable. Mobile POS systems can be beneficial for market sellers and other business owners who need to sell on the go.
There are a couple of downsides to these high-tech systems, though. They often rely on an internet connection, so if you’re offline or your Wi-Fi is down, you won’t be able to process payments. They can also take a while to set up, and if you’re not technically minded, it might be tricky.
If you want a large POS kiosk with plenty of features, there can also be significant upfront costs. The prices of kiosks and POS systems vary, but you should be aware that it can be a more expensive purchase processing solution.
Price is a key factor when it comes to POS systems vs. cash registers. Cash registers are typically cheaper because they have fewer features. It can cost as little as $100 to buy a basic electronic cash register.
A mid-range cash register can cost between $300 and $800, and the upper end of the price bracket for this type of machine is usually around $1,000. Once you’ve paid for your cash register, there are usually no or very low ongoing costs. The only other things you’ll have to pay for are the electricity to run it and the rolls of paper for printing receipts.
However, it’s worth considering that you’ll probably need to spend both time and money on additional software to track your incoming revenue and outgoing expenses — with a POS system, you may be paying more, but these costs are included.
POS systems also have varying costs depending on the brand you choose and the features you need. Overall, though, they tend to be more expensive than cash registers.
If you need to buy hardware (such as a monitor, a cash drawer, a card machine, and a receipt printer), you’ll have to pay an upfront cost. For a high-quality device with outdoor functionality (i.e., weatherproofing), you could be looking at upward of $20,000. If you don’t need so many features, prices drop. There are POS hardware systems on the market for around $450, but you could end up paying $800 and up.
There can also be ongoing service charges for the software you’ll need to run the POS system. Some companies charge a monthly rate, while others charge per transaction. Another option is to buy an all-in-one package that includes both hardware and software. You’ll pay a flat monthly fee that includes the POS software and the equipment you need to run it — this may cost between $50 and $300 per month.
The exact cost you’ll incur depends on how many transactions you need to process, the number of check-out machines needed, and the number of restaurant locations you’re using the software in. Additionally, you should bear in mind that the more features you need to use, the more expensive the system will be. However, you could end up saving money overall when you consider that it’s an all-in-one service — you won’t have to pay for several different systems every month.
If you want a more budget-friendly option, consider a tablet-based POS system, particularly if you run a small or medium-sized business. You can use a tablet and credit card reader as a combination of a self-service kiosk and a POS system to provide a comprehensive purchasing solution with the add-on features you need. You can buy your hardware for under $500, and depending on your annual transactions, you could pay as low as $50 per month for the software.
POS systems have more features than cash registers, but the best POS systems may be too advanced for small businesses or startups. A simple cash register could be better for your business, or you could opt for a POS system without too many bells and whistles, such as a kiosk with POS software integration.
Consider the number of customers you serve or transactions you process each month. If it’s a lot, a POS system could allow you to keep track of your inventory and expenses more easily; if it’s not many, you may be better off with a more straightforward system.
Keep track of whether your customers mostly pay with cash or by card. If you’re mainly processing card payments, a POS system without a cash drawer may be better for your restaurant. With no cash onsite, you reduce your risk of theft and of the register being short at the end of a shift.
Think carefully about whether you can afford a comprehensive POS system. The hardware and software costs can add up to a sizable expense, so make sure you’re not paying for features you don’t need.
On the other hand, if you need self-service capabilities and different integrations — things like inventory management, split tickets, keeping tabs open, and loyalty programs — it could be cheaper and easier to use a single POS system. Paying for all these features individually or manually organizing them can be expensive and time-consuming.
Think about your business needs and decide what’s right for you.
There’s no one-size-fits-all solution for businesses looking for the best payment processor. Some companies are happy to stick with traditional cash registers because they’re simple and they get the job done. Others need more functionality and want to reduce the time they spend on business admin like accounting and inventory management.
If you’re looking to reduce your processes, use a self-service kiosk like KioskBuddy as your POS system. It’s an intuitive, all-in-one system that allows customers to order and pay with ease.
Sign up for KioskBuddy today for a simple solution to your order processing needs.