The 12 Best POS Systems for Small Businesses: Our Top Picks for 2022

When you invest in a POS system, three main costs typically come with it – a one-time hardware fee, a monthly or annual software fee, and a payment processing fee. Depending on the vendor you choose, there may be additional costs for features like marketing, online ordering, or gift cards for your customers.

• Hardware: The average cost for POS hardware is $799, but you could spend up to $1,500 on it. The exact price depends on how many registers and any peripherals you need. If you already own this type of hardware, you could save on this cost by choosing a POS provider that allows third-party hardware integrations.
  
  
• Software: The software plan costs range from free to $150 per month. You may have to pay for a higher-priced plan if you have a lot of employees, need to track a lot of inventory, or want multiple add-on features.
  
  
• Processing: The payment processing fees range from 1.5% to 3.5% per transaction. The fees often vary slightly based on whether the transaction is in person or online. 

Before choosing a POS system, you need to determine what type of system you need, what features you require, and how much you can afford. Ask yourself the following questions to narrow down your options. 

Do you want a cloud-based or server-based system?

Cloud-based POS systems are mobile, easy to use, and generally less expensive than server-based systems. With cloud-hosted systems, you can access your reports and other back-office features from anywhere. Because your data is in the cloud, you don't need to set up, maintain, and secure a local server. You may want a server-based system if you don't have reliable internet access, though. These POS systems are installed on a server and host your data locally instead of in the cloud. The advantage is that you don't need the internet to run your POS system. However, the security and backups are your responsibility, so you may have additional IT and maintenance costs. 

Did you know?: Because of their mobility, affordability, and usability, cloud-based POS systems are becoming the norm for small businesses. In particular, restaurants benefit greatly from mobile POS systems.

Do you need retail or restaurant POS software?

Most POS providers offer one version of their software for retailers and another for restaurants. Some retail versions also offer integrations or add-ons that make the POS suitable for service-based companies. Other providers specialize in one vertical, offering only retail or restaurant POS software. 

Be sure to choose the right type of POS software for you. Restaurant POS systems, for example, are very different from retail POS systems and not typically compatible with the needs of a retail environment. The wrong POS system could waste significant time and money for your business – and require your staff to figure out workarounds that make the whole process confusing and inefficient.

Do you prefer Apple or Android devices?

Some mobile POS systems work on both iOS and Android tablets and PCs, while others only work with one operating system. The main advantage of using iPad-based systems is that they are known for being user-friendly, stable and secure. The main drawback is that they tend to be more expensive. [Already using Apple? Learn how to turn your iPad into a POS system.]

If you go with Android devices, you'll likely end up paying less, and these platforms allow for greater customization. But there are only a few Android POS systems, so your options will be limited. 

The right POS features will make it easier to run your business and streamline your processes. Here are some features you should look for in a POS system. 

Payment Processing

Most businesses begin looking for a POS system because they need a way to complete customer transactions. Many POS providers go beyond accepting credit and debit card payments, also allowing you to take online and contactless payments. You'll receive detailed insights about your daily sales in the process, so you'll always know how your business is performing.  

Inventory Management

Basic POS systems may only support a product catalog, while others can track inventory at the component or ingredient level. Some plans include purchase ordering and vendor management features to simplify your reordering process. Consider whether standard inventory tools will be sufficient or if you need advanced features to keep your business well stocked. [Learn more about how POS systems help with inventory management.]

Customer Management

POS systems have varying customer management features. Some allow you to capture basic information, such as your customers' email addresses so you can build an email marketing contact list. Others have CRM features that let you create customer profiles, including contact information, purchase histories, preferences, birthdays, and notes.

Tip: If you prefer more extensive customer relationship management than you can find in a POS system, consider one of our picks for the best CRM software.

Loyalty Programs

To ensure a loyal customer base, you need to reward your best customers. A POS system enables that with built-in loyalty software. The top POS systems can track information on your customers' shopping and dining preferences, then help you create loyalty and rewards programs around that data. You can customize rewards based on how frequently the customer shops at your store and the products or services they purchase.

Employee Management

You can usually add your employees to the POS system and manage their access to various features and information. Some systems have role-based access controls, while others let you customize the controls for each employee. Some have built-in timeclocks, which let your employees use the POS system to clock in and out. Others can track individual employees' sales or manage tips. [If tracking your employees' time is one of your main needs, consider the best time and attendance software.]

Reporting

All POS systems have reporting capabilities, but some are basic, with just a handful of preconfigured reports and limited customization. Others are advanced, with dozens of reporting options and filters to help you analyze data for your sales, inventory, customers, and staff. 

The best systems have real-time reports that you can access from any device with a browser or mobile app. Before purchasing a POS system, make sure it offers the specific reports you need to run your business efficiently. [Related article: 5 POS Reports Every Business Owner Should Run]

Add-ons and Integrations

POS systems often have a lot of features, but they may not be enough for your small business. That's where add-ons and third-party integrations can be helpful. You may, for example, want to use a specific email marketing platform, sync the sales data with your accounting software, or offer a customer loyalty program from a certain provider. The best POS systems give you a ton of integration and add-on choices so you won't be limited as your business grows.

Customer Support

You should be able to contact your POS provider around the clock to receive help with the system when you need it, even if your business keeps irregular hours or you're working on the weekend. Look for a POS provider that you can easily reach via your preferred mode of communication, whether that's phone, email, live chat, or social media. The best companies even offer 24/7 support.

• All-in-one system: A POS system allows you to manage many aspects of your business from a single location. You can track your sales, inventory, customers and reports from your POS app.
  
  
• Cloud-based software: Most POS systems are hosted in the cloud, which means you can access your data from anywhere – and complete customer transactions on the go.
  
  
• Better customer service: Many POS systems have advanced features like inventory management, e-commerce functionality and customer loyalty programs. These features allow you to provide better and more personalized service for your customers.
  
  
• Greater insight into your business: The data your POS system collects will give you details on how your business is running. Along with your general sales data, you can see detailed information about your customers' buying habits and who your best-performing employees are, for example. 

FYI: Three POS reports you should run regularly are sales summaries, sales per product, and sales per customer. Learn how to interpret your POS sales reports and use that info to boost your business.

What is a point-of-sale system?

A point-of-sale (POS) system records the products or services a customer intends to purchase, adds up the items' cost, calculates tax, accepts various forms of payment, and generates a receipt. 

A POS system differs from a cash register in that it has advanced features that make it easier for merchants to manage sales data, inventory, customers and employees. It has three components: software, hardware and a credit card processor. 

What types of businesses use POS systems?

Virtually every business needs some way to accept and process customer payments, and POS systems help them do that. However, customer-facing businesses like retailers and restaurants most commonly use these systems.

When does your business need a POS system?

As soon as you begin selling goods or services in person, your business needs a POS system, no matter how small your operation is. A POS system makes the checkout experience easier for you and your customers, reducing the time it takes to ring up a sale and the risk of human error, such as miscalculations.

A POS system also helps with inventory management by tracking the items you have in stock, and some can even generate purchase orders. POS systems with advanced inventory management tools can track sales from your e-commerce platform or physical retail store in real time or across multiple locations.

Real-time reporting shows which items are your bestsellers, so you can reorder popular items and offer promotions on underperforming items. It can also help you identify your busy and slow hours, days, and seasons so you can optimize your staffing.