If you’re keen to learn the critical differences between a cash register and a POS system, this article will teach you all you need to know.
It begins with a brief history lesson. Understanding how mechanical cash registers evolved into modern point of sale systems gives you a simple way to comprehend the differences.
The cash register was invented by James Ritty and John Birch back in 1879. Birch owned a saloon in Ohio. He invented the machine to keep track of the money coming into his business and keep tabs on the staff who handled it.
The first cash register was mechanical. It was little more than a primary adding machine with a cash drawer. There was also a bell that rang when a transaction took place. Paper receipt rolls followed about five years later. The first time electricity was used in cash register systems was in 1906, when one was produced with an electric motor.
Cash registers still exist today and fulfill precisely the same functions of logging transactions, creating receipts, collecting money and handling change. Many of them do much more and use computers and electronics in place of most mechanical engineering.
Despite the continued existence of standalone cash registers, a point of sale system takes place in most modern businesses. So, what’s a POS system, and how is it different from a cash register?
A POS system can (and often does) have all of the standard cash register features: a cash drawer, a place to record transactions, and a receipt printer. However, it has much more besides. For example:
- It’s usually linked to a local or cloud-based computer system that holds a database of all the products on sale.
- It can integrate all kinds of hardware and software add-ons, from weighing scales to mobile devices.
- It plugs directly into various payment options, such as card machines.
Cash registers are relatively straightforward, isolated pieces of hardware. POS systems, which constantly develop and improve, sit right at the heart of modern retail and foodservice businesses. They are there to deal with “taking the money” – just like the first cash register in John Birch’s saloon – but they can handle everything from inventory management to eCommerce integration.
Let’s delve a little deeper into the key differences:
POS Systems Can Fully Integrate with Payment Systems
Again, history can help to explain this difference.
Two or three decades ago, businesses would use a mechanical “click-clack” card machine to process card transactions. Usually, shop or restaurant staff would place the completed and signed card paperwork in the cash drawer. Gradually, these were replaced with electronic card machines.
Independent payment systems (and card machines) still exist. Some POS providers like Square continue to sell them alongside fully-fledged POS systems.
A complete POS system integrates payment processing and logging the transactions within the same system. A cash register does not do this, leaving the business to record and reconcile the sales manually.
Over the years, there’s been some cross-over between computerized cash registers and POS systems. For example, supermarkets and retail chains have had fully integrated systems. Some independent businesses still operate with a cash register and an independent (unlinked) system for payment processing.
A POS Cash Register Can Manage Your Inventory
A POS system can help link the “front office” and “back office” of a business. One fundamental way it can do this is inventory management.
Thinking back to the first mechanical cash registers, there was no link between the register and stock control. The cash register was there to collect the money, and inventory management was handled separately.
A modern POS system can also manage inventory – not just in one store or restaurant but also across multiple branches and warehouses. The system “knows” when a product has been sold and adjusts the stock data accordingly.
Again, this is an example of larger businesses having had the functionality available to them for longer. Supermarket chains used mainframes for this some decades ago. Thanks to cloud-based POS systems, that kind of “enterprise” functionality is now available to much smaller businesses.
A POS can be a “Computer Cash Register,” – But No Cash Register is Required.
POS systems can include cash drawers and receipt printers, which generates some inevitable confusion between cash registers and POS systems. They can look like the same thing.
However, a POS system doesn’t have to include those things. iPad POS systems are increasingly popular, and a business that only takes card payments and emails its receipts can operate without cash drawers and receipt printers. Apple stores operate almost entirely in this way.
POS Registers Can Integrate with All Kinds of Hardware and Software
POS systems usually allow for connections with various hardware devices and software products. Hardware can include self-service kiosk systems, remote devices for sales processing (such as at a restaurant table or on a shop floor), and a selection of payment devices, such as contactless card readers.
Software integration options are often extensive too. For example, POS systems can integrate with accounts software, sending transaction details directly to the accounting system. There are often options to link with third-party loyalty cards and gifting schemes.
Independent cash registers don’t provide this array of options.
POS Systems are Well Suited to Businesses with Large (or Growing) Staff Teams
Imagine a supermarket chain with unintegrated cash registers on every checkout and branch. This would create a chaotic environment, with no central control of stock, finances, or staff interaction with the systems. Businesses with large teams and multiple branches almost always choose a POS system.
As POS systems are increasingly affordable, the same benefits and convenience are also available to small and growing businesses. Even a company with just a few employees or branches is easier to manage when everything is connected and centrally controlled. Standalone cash registers cannot do this.
Some Point of Sale Systems are Tailor-Made for Specific Businesses
POS providers have worked to create solutions for various niches. For example, Upserve caters specifically to restaurant businesses, offering kitchen displays, table management, and menu intelligence features.
A cash register is just a cash register. Businesses can choose POS systems specifically designed for the unique needs of different businesses – from restaurants to retail stores and from salons to garden centers.
Cloud-Based Systems Allow Businesses to Operate (and be Managed) from a Distance
Increasingly, POS systems hold their data in the cloud. This negates the need for too much hardware that must be locally located, managed and maintained.
Cloud-based systems also offer additional benefits. Transaction and payment processing can happen anywhere, allowing businesses to operate from remote locations, such as pop-up stores and food fairs.
Remote management is also possible, allowing managers to access real-time sales information or see which staff are logged on and working. With a traditional cash register, the only way to see how business was going was to go and look in the till!
As you can see, point of sale systems have taken the original cash register concept and evolved it for the connected world. Small businesses can now access the functionality (and connectivity) that was once the exclusive preserve of household-name companies.
Traditional cash registers are still available. However, their functionality is limited by comparison. They introduce the need to manage other back-office business functions, from inventory to payment processing, using disparate and unconnected hardware and software.