a graphic of a person using a POS system in a grocery store

Different Types of POS Systems: Quick Guide For Retail Business Owners

If you run a liquor store, QSR, golf course, grocery store, convenience store, or any other type of B2C business, you’ll need to equip it with a point of sale system. However, the type of POS system you choose depends on the type of business you run, the size of the business, the number of customers and employees you have, and other factors.

A POS system is essential to your day-to-day operations and can help keep everything from payment processing to inventory management running smoothly. Still, there are many different types of POS systems on the market, which can make your choice complicated. Here’s a quick overview of the different types of POS systems and how to use them. You’ll also learn how to choose the best POS system for your business, and we’ll provide some other POS-related resources.

Table of Contents

  1. Terminal POS systems
  2. Tablet point of sales systems
  3. Multichannel POS solutions
  4. Cloud POS
  5. Open-source POS software
  6. Self-service kiosk POS
  7. Touch-Screen point of sale systems
  8. How to Choose the Best POS System for Your Business

Terminal POS Systems

A POS terminal is a hardware system for processing card payments in stores and recording revenue earned and products sold. The software reads the magnetic stripes of credit and debit cards and is built into the hardware.

Terminal-based POS systems are the most common type of POS system. The terminal refers to the screen that the employee uses to enter information into the POS software. Other hardware components may include a barcode scanner, cash drawer, receipt printer, and customer-facing screen with a card reader.

Terminals are typically used at the checkout counter in retail stores of all sizes (grocery, antiques, electronics, books, salons and spas, liquor stores, convenience stores, thrift stores, etc.) Advantages of a terminal include easy employee restrictions and the ability to integrate additional point of sale hardware pieces (such as tablets) or software (such as online ordering). However, POS terminals present a lack of mobility for employees, and they typically take up more space.

Depending on the POS provider, retailers can purchase or lease a terminal based on how they prefer to manage their cash flow. Buying a system involves higher upfront costs, while leasing spreads payment out monthly payments (although the total lease payments may be higher than a one-time purchase over the life of the system).

Tablet Point of Sale Systems

A mobile POS system refers to software that can be accessed via a mobile tablet or smartphone (the latter usually with a small hardware credit card reader that plugs into the headphone jack). It is primarily used to process payments, with some limited inventory or time management functions.

The mPOS systems can be used to allow customers to pay remotely and/or on the go. This allows shoppers outside your immediate geographic location (such as a storefront) to make payments quickly and securely. A mobile POS system is ideal for providing customers with a smoother, more convenient payment experience. The best mobile POS systems can accept the following types of frictionless payments:

Mobile POS is great for businesses like ice cream stores, fast food trucks, juice bars, farmer’s market stalls, and street vendors, but can also work well in traditional retail stores. For example, a mobile POS can speed up the payment process when you have a long line in your store.  Using a mobile POS requires little or no upfront investment and offers the aforementioned mobility. However, the functionality can be limited and lacks marketing tools that medium to large businesses would need.

See related: The Difference Between POS and mPOS & Mobile Payments Explained

Multichannel POS Solutions

Multi-channel POS software is a system that allows a business to manage store operations across multiple channels. This type of POS system integrates all of your sales across your online store, social media pages, and various physical storefronts.

Multi-channel POS software helps you avoid stock-outs by synchronizing inventory levels across channels. This is especially important for maintaining accurate sales data, especially as online and offline commerce lines continue to blur. A benefit of multi-channel point of sale systems is that they enable you to expand your business by further widening your consumer market. The multi-channel point of sale system is ideal for an eCommerce store that establishes a physical location, a physical store that adds online orders, or online vendors that host in-person pop-ups.

See also: Multi-Channel Retailing: The Ultimate Guide to Engaging Customers On and Offline

Cloud POS

Cloud-based payment terminals record transactions in real-time, allowing you to access your data from anywhere with an internet connection quickly. The cloud-based cashiering system can be truly portable (if using mobile devices), while the business owner can check and use sales data from anywhere that they have cloud access. Because the data is stored on the POS system provider’s remote servers, a cloud-based POS system can generally only work when there is an internet connection, although providers may offer some offline functionality to minimize potential disruptions to your customer service.

See also: Future Of Cloud-Based POS: Trends in the Point of Sale Industry

Small businesses with multiple POS systems or multiple locations benefit from a cloud-based POS system, as the data syncs with a centralized database, giving you an overview of your business. Many cloud-based POS systems also include real-time inventory updates, which is useful for merchants with multiple stores to track product levels.

Open-source POS Software

Open source POS systems offer the ability to customize the interface of your POS software to work exactly the way you want it to. However, you’ll need software engineers to do this, and since they often charge high rates, open-source POS systems can be expensive. However, it may be the only option for large companies with unique POS system needs.

In general, open-source POS systems are best suited for businesses that require a highly customized solution, have a larger budget, and have a development or IT staff on hand. Reach out to KORONA POS about our open API if you have more questions on this type of POS solution.

Self-service kiosk POS

Most self-service kiosk POS systems are specialized solutions that serve a specific purpose. For example, you might offer a self-service kiosk that allows customers to purchase movie tickets or manage parking time and payments. Another useful option is to install a few kiosks in your large retail store to allow your customers to check prices, product availability or even to check out. 

Like the terminal, the components of a self-service kiosk POS typically include a display, card reader, receipt printer, and barcode scanner to help the customer check out. The most common use cases are movie theaters, grocery stores, bus passes, and parking tickets. However, some point of sale providers like Square also offers self-service kiosks for restaurants.

Touch-Screen Point of Sale Systems

A touchscreen point of sale (POS) system works on tablets and mobile devices, usually via an app. The biggest advantage of using a touchscreen or tablet is a streamlined interface for faster checkout. In addition, touchscreen devices are more portable than cash registers or wired countertop POS systems, allowing for mobile sales capabilities. The intuitive design of touchscreen software makes it easy for customers and employees to use. The best tablet and touchscreen POS systems are affordable, easy to use, and equipped with key business management features, such as inventory management and sales reporting. They are best for high-volume businesses and for any business that needs a system that is easy to train employees on.

How to Choose the Best POS System for Your Business

Every business has different needs. When it comes to the type of POS system you’re going to purchase, there are five different factors that can help you choose from the types of POS systems we’ve described above. 

  • Type of business – small or large, restaurant or retail
  • Low or high sales volume
  • Budget
  • Hardware requirements
  • Specialized features – advanced inventory management, customer-facing displays, fast payment processing, fully customizable features, and employee management tools, etc. 

Don’t hesitate to talk to other business owners in your industry to get more information on the best POS systems. Hop on a few demos to explore all the options available and make the right choice for you. Consider customer support, too. Your point of sale is an integral part of your business, so knowing you have the right team behind you is crucial.

Must-Read: 10 Questions To Ask When Shopping For A New POS

KORONA POS: The Retail POS System You Need For Your Retail Business

KORONA POS helps you better position yourself in the retail industry with the most advanced point of sale system on the market. It includes integrated payments, powerful inventory management, and real-time reporting to guide you in the right direction. KORONA POS comes with a lot of other features, too: 

  • Custom eCommerce integration
  • Employee time tracking
  • Loyalty programs
  • Quickbooks Online accounting integration
  • Retail inventory management tools
  • Cashier permissions and reports
  • Credit card processing agnostic
  • ABC retail analysis
  • Automatic inventory reordering
  • CRM and email marketing
  • Promotions and discount features
  • EMV and mobile payment integration

Different Types of POS Systems: Conclusion

Overall, point of sale solutions offer important benefits for modernizing retail businesses. Hopefully, this guide provides some background to help you determine which software is best for your situation.

Choosing the right POS for your industry starts with understanding the nature of your business needs in terms of functionality, determining a budget for your individual store or network, choosing a solution with simple and secure data migration processes, determining which integrations are essential for your business, and finally evaluating the ongoing support offered by the various systems you have.

Should you currently be looking for POS software, click on the button below to learn more about KORONA POS through a product demo.

FAQs: Different Types of POS Systems

1. Which POS system is the best?

The best POS system depends on your business and your needs. For companies that operate in the retail sector, there are several POS systems such as KORONA POS, Lightspeed, Square, and many more. Basically, the best POS system is one that is able to solve your store management operations efficiently.   

2. How much does a POS system cost?

A point of sale system for your small business costs anywhere from $0 to $300/month. For most small businesses, the average cost of a point of sale system is about $69 per month. Factoring in fees for additional software features, such as advanced analytics, loyalty, and gift cards, you could be paying over $100/month for your POS system. More custom solutions will require a bigger monthly investment.

3. Do all POS systems charge per transaction?

Pricing varies from one POS provider to another. The POS provider may charge a per-transaction fee if it offers integrated payment processing. However, this option is not typically recommended. It is best to opt for solutions that give you the choice of your payment processor in order to choose the rate that suits you best.

a graphic showing a person holding a large piece of paper

What Is The Work Opportunity Tax Credit

a candidate interviews for a work opportunity with a recruiter

There are a number of provisions and programs that the government has implemented in an effort to alleviate occupational barriers for certain groups of Americans. These groups include wounded veterans, convicted felons, underserved rural communities, and more. One such provision is the Work Opportunity Tax Credit (WOTC). The WOTC offers subsidized incentives for businesses that hire qualifying American job seekers. 

This program is meant to extend opportunities to economically disadvantaged Americans who need them most, while helping participating businesses save some money on tax liability. But what is the work opportunity tax credit, exactly, and how does it work? Learn how your retail business can take advantage of the WOTC by hiring the right people and earning a tax credit at the same time.

 Table of Contents

  1. Defining WOTC
  2. WOTC Target Groups And Eligibility
  3. The Benefits Of WOTC For Employers
  4. Calculating Your Tax Credits
  5. WOTC Screening Questions And Forms
  6. Third Party Tax Services

What Is The Work Opportunity Tax Credit?

The Work Opportunity Tax Credit traces its origin back to 1996. Since then, it has since been slightly modified and continuously extended by legislative bodies. WOTC offers tax credits to be claimed by employers who hire American workers of certain demographics, such as veterans, individuals that live in rural areas, recipients of nutritional assistance, and more. 

The program is meant to increase employment opportunities for individuals who have been economically disadvantaged or otherwise face work challenges. In theory, if an employment decision came down to two similar candidates, the employer would be motivated by WOTC deductions and hire the applicant that categorically faces tougher employment barriers.

What employees are eligible?

The IRS categorizes “targeted” groups that they intend to aid in employment. These groups are considered underrepresented and disadvantaged in the business world. Increasing their employment is the intended goal of the provision. The IRS website lists these groups as the following:

  • Those formerly incarcerated or those previously convicted of a felony
  • Recipients of state assistance under Part A of Title IV of the Social Security Act (SSA)
  • Veterans
  • Residents in areas designated as empowerment zones or rural renewal counties
  • Individuals referred to an employer following the completion of a rehabilitation plan or program
  • Individuals whose families are recipients of supplemental nutrition assistance under the Food and Nutrition Act of 2008
  • Recipients of supplemental security income benefits under Title XVI of the SSA
  • Individuals whose families are recipients of state assistance under Part A of Title IV of the SSA
  • Individuals experiencing long-term unemployment
an employer looks over a WOTC candidate's paper work

How Does It Help Employers?

Through the WOTC, employers will be able to save money when they pay taxes. When businesses hire new eligible workers, they can apply for this credit during that worker’s first year of employment. There are no parameters regarding how big or small your business must be in order to qualify.

There are also no limits on how many WOTC employees you are allowed to hire. However, you can only claim an employee once. And employers are restricted from reapplying for a work credit for a particular employee if they are rehired. 

WOTC Calculator: How Much Can Employers Claim?

Different categories have different allowances. However, for most employees that work over 400 total annual hours, employers can claim 40% of up to $6,000 of their wages. This means that the cap on this credit would be $2,400. For employees that are retained for at least 120 hours, employers can claim 25% of up to $6,000 of their wages. This credit cap would be $1,500. 

There are some specific “qualified veteran targeted groups” that allow employers to potentially claim an increased amount of tax credits of up to $9,600 through the program. No matter which group you hire, WOTC is non-refundable, meaning that you must use it towards a tax liability. 

Because of the fact that there are no limits on the amount of workers you can claim, the WOTC offers significant tax breaks for businesses. Not only will employers be saving money on their yearly taxes, they will also be partaking in socially responsible hiring practices by opening up opportunities to those who need it most.

Work Opportunity Tax Credit Program: What Is the Paperwork Process?

First, complete an IRS Form 8850 before the employee starts the job. This form is the “Pre-Screening Notice and Certification Request for the Work Opportunity Credit.” The first page of the form includes a WOTC questionnaire that is filled out by the employee. Remember that the employee is not required to fill out this form. But if they do opt into completing the form, it must be sent to the Department of Labor within the first month of their employment. 

Next, complete the “Individual Characteristics Form,” which provides detailed demographic characteristics about the employee. The form can be filled out by the employer or the employee. For some of the sections, the form requires supplemental documentation. This must also be sent into the US Department of Labor workforce agency within the first month of employment.

The workforce agency will then notify the employer whether they require any further information about the specific employee. If not, they will send the employer the certification with the tax credit. Should it be approved, the business owner can use the Work Opportunity Credit 5884 Form to claim the deduction on the following year’s taxes.

Outsourcing Tax Work

Depending on the size and resources of different businesses, it may be worthwhile to hire a third-party tax service. This will likely save you time and increase accuracy in the process. Doing so will also make it more likely your business is qualifying for the maximum deductions available. 

ADP tax services, for example, claims that they screen “34 million applicants per year for the WOTC program.” If your company hires a high number of employees or experiences frequent turnover, utilizing a streamlined, specialized third-party platform will likely be well worth the

KORONA POS Offers The Best In Employee Management 

Luckily, for retail businesses, KORONA POS has built-in employee management software to keep track of all of your staff in real-time. Employees can easily clock in and out of their shifts right through the point of sale screen Plus the solution integrates with TimeForge and Quickbooks Online making it easier than ever to manage scheduling, conduct payroll, and compile tax info each year. 

Best of all, with our cloud-based POS, you can monitor staff hours and activity right from the comfort of your home or while on the go. Give us a call today to learn more about how KORONA POS can make your retail business run as smoothly as possible.

FAQs: Work Opportunity Tax Credit

How does the WOTC work?

The Work Opportunity Tax Credit offers tax benefits for businesses that hire employees that are considered by the IRS to be in “targeted” groups. These groups include veterans, recipients of social services, and formerly incarcerated individuals, amongst others. The idea is to provide increased opportunities for these groups by incentivizing businesses with tax credit subsidies for hiring them.

What is a Work Opportunity Tax Credit questionnaire?

The Work Opportunity Tax questionnaire is the first page of IRS Form 8850. It is used to determine whether the employee in question is eligible for the WOTC program. The questionnaire asks for basic information about the applicant regarding unemployment, military service, and more.

How Are WOTC Credits Calculated?

WOTC credits are calculated by three factors: hours worked, category of employee, and total wages. For employees that work 400 hours or more, employers can claim 40% of their wages up to $2,400. As for employees that work between 120 and 399 hours, the employer can claim 25%.

What is the maximum WOTC credit?

The maximum WOTC credit employers can claim is $9,600 dollars, but this is for highly-specific circumstances. This only applies if a business hires a disabled veteran who is receiving compensation for a service-connected disability and has been unemployed for at least 6 months. Typical credit is capped at $2,400.