Whenever an exchange of items for money takes place, there needs to be a system which will facilitate the transaction. In every shop, there is a fixed place where one of the employees is charged with the responsibility of handling this system. This place, where customers can check out their items and pay money for them, is called a point of sale terminal.

The traditional POS systems only comprised of the manually-operated cash register. Cashiers would collect cash from a customer, add it to the register, and return the change along with the purchased item. Over time, the option of paper receipt generation was also added. Gradually, the entire system at the point of sales became computerized.

With the latest technology, credit card readers have also been added. Barcode scanners are now a part of POS systems. The POS has now also gone mobile. Tablet and iPad POS is now used by many businesses. Online stores also have a POS of their own. Customers who prefer online shopping over in-store shopping are also very happy with the integration of a payment system on their favorite online stores.

By using the POS, restaurant owners, bookshops, and businesses providing services have all gained an advantage. Newer POS systems serve as an inventory management system too. When a sale takes place, several processes take place at the backend. The barcode reader scans the code for the sold item. The database is automatically updated with the new value of the stock. If an item goes out of stock, some systems generate alerts. Using a POS for inventory management also ensures that the cashiers do not make mistakes or try to steal from the business.

Perhaps the most common use of the POS system is in retail stores. Each transaction is processed by the system. It will scan items, calculate the total bill and change, generate a receipt, and update the stock. Some POS systems also generate sales reports for the users. Thus, using a retail POS system has simplified the sales process for business managers and owners.

The POS system greatly reduces business costs. It helps in stock management. The number of mistakes made by cashiers are also cut down. Employees can also be trained to use the system very easily. Customers are also more satisfied by the quick, time-saving checkout system. Since the point of sales system carries so many advantages, it is now preferred by all kinds of businesses.