Small businesses usually face several problems in the very first years of conception. In fact, the U.S. Small Business website states that almost 60 percent of all small businesses fail in the first year of business due to simple but universal problems that involve inventory, purchasing, billing, credit lines, and taxation. The companies that do manage to streamline all of these functions into a single integrated system with warehouse inventory management and POS systems are more likely to survive and flourish. If you are a small business owner and are actively contemplating the purchase of a small business POS, here are a few common problems that the POS system will overcome.
Understanding Financials and Taxation
A recent study listed on Smallbusinessbc.ca showed that 83 percent of all small businesses in the country failed due to a serious financial ignorance about accounting and taxation. These problems could have been avoided easily with POS systems as the system automatically tracked payments for products at the billing counter. It also calculated any discounts applicable on sale or marked down products and listed it routinely for the cashier.
Combination deals were also listed on the billing register and the cashier could use and add discount deals, coupons and codes (offered by the customer or the manufacturer) to the billing to discount the price. Almost all POS systems were also updated with current sales tax and VAT rules. As a result, at the end of the day, the daily cash income was automatically tallied with sales tax and VAT requirements. This tax tracking continued over a month and storeowners could just check the monthly printout to find out what they had to pay in the form of taxes.
Inventory Management and Re-Stocking
Business owners did have technical skills but they found it difficult to tally daily sales with inventory depreciation and reordering. In fact, most business owners stated that end-of-day cash register/inventory tallies were the most annoying part of running a business. All of these problems can be avoided with a POS system for small business. It tracks sales for products sold every day. For example, if three bottles of Savlon are sold in a day, the system automatically deducts it from store inventory of 45 bottles and registers in-store inventory as 42.
This not only simplifies the purchase, inventory and tracking process but also keeps the business owner informed about how products sell in the store. The POS system can also have automatic email alerts for the business owner, the warehouse and vendors. Email alerts may be sent to the warehouse for restocking of items. The emails are also sent to vendors when store and warehouse stocks fall low and the storeowner can put in automated repeat ordering parameters. This ensures that products never fall below a certain number and popular high-volume goods are always available for customers. At the same time, the POS software also ensures that product loss in the form of theft and misplacement is minimized.
Marketing and Customer Loyalty
The challenge for small business owners is to market to their customers and increase their brand or store loyalty. With increasing competition, it is now very common to find a wandering customer base. Well-informed consumers are more than likely to comparison shop at more than two to three retail stores just to ensure that they are getting the best. For a small business owner, this means that they have to offer the best deals possible.
With an integrated and cloud-based POS system, this is completely possible. Internet-based billing systems can link to manufacturer and coupons websites and update the retail system immediately. As a result, customers are offered the best deals almost immediately. The POS system also integrates with in-store customers and offers them immediate freebies and coupons when they approach products through in-store Wi-Fi.
Improved Cash Flow
One of the major benefits of a POS system is data availability. For new business owners, cash is usually tight. They have to make informed decisions on what to spend money and when. A POS system provides accurate guidance in this aspect. As it tracks sales, it is possible to find high-volume products with a bigger dealer percentage. These products can be promoted and marketed leading to better sales and higher profits. As the system tells the proprietor what to buy and when, they can make informed decisions about their inventory and expenditure.
Not every small business problem can be resolved with a POS system. However, a good system can ensure that the basic problems of vendor coordination, customer billing, credit lines and cash flow are managed efficiently through the system. This management ensures that stock is available for purchase, a steady cash income is available, vendors are paid, and the business remains financially flush with a chance of success.