Retail accounting already has unique challenges, and ensuring that you have proper integration between all business software (in this case, your POS system and your back-end accounting) is crucial.
Some key ways of keeping customers coming back to your restaurant include taking advantage of unique features in your POS system, such as loyalty programs, customer profiles, and more. These tips can apply to all retail businesses, and proper integration can help.
The goal of integration is to use the same data files for multiple systems. Your POS is helping to itemize a customer’s purchase and record individual sales. These sales combine to form your total daily sales. Usually, these daily sales are then “dropped” into your accounting software. Your accounting software might not break down sales on a transactional level, but they will have ledger entries for a specific week’s sales or days sales.
There are many key POS software features to consider when evaluating systems, but many tend to gloss over the benefit of a solid integration with your accounting system. It’s important to consider whether or not the POS system your shopping for can integrate with your current system, or if you may need to consider a fully-integrated solution. Regardless, POS and backend accounting have similar but distinct functions, that together, can help your retail business run much smoother.
Eliminate Manual Entry
A huge benefit of software integration is the ability for data to be transferred, and thus avoid entering in the same data twice. An example of entering data twice would be having a handful of transactions go through on your point of sale, and at the end of the night, having to manually enter in each transaction into your back-end accounting system.
In a POS, you’re processing many daily transactions. Simply put, it would be very time consuming to record each and every one of these transactions into your back-end accounting system. In fact, some bookkeepers may become lazy and decide that it isn’t necessary to record these transactions in the back-end accounting, simply due to time constraints. They may take a shortcut such as only inputting daily or weekly sale figures. This leaves your overall accounting records not as complete as possible.
Match Credit Card Payments
A benefit of most POS systems is the ability to process credit card sales. Some POS hardware will have credit card scanners built in, while others will allow you to input a sale as either “cash” or “credit”, and use a 3rd-party CC reader that is detached from the POS system/register. In the latter scenario, it becomes vital that your inputted CC sales on the POS are matching the CC payments that are processed on your CC reader. On top of all that, you’ll want to record credit card sales in your accounting software separately from your cash sales, and need to ensure the correct figures are being sent over. A POS integrated with your accounting software will automatically do this for you.
Sending these daily credit card reports is a common transaction, but it becomes vital that any POS deposits are coinciding with actual bank deposits. A recent Accountex report gave an example that many retailers could come across: A merchant service in a POS may decide to cut off credit card charges before the close of business for the day. This means that any amount that is deposited will not pair up with any bank deposit that would be made. Another example given was how the merchant service provider may take fees that are owed to them out of your deposit, rather than letting you deposit the gross sale amount and letting you pay the fees in a separate transaction.
Sync Customers & Their Balances
A large amount of POS systems will allow you to track both customers (information, contact, order history) as well as a customer balance (what they owe or have been invoiced for). Typically this information is found in the AR part of your accounting program, as businesses will want to track funds paid and funds owed. In a situation with no POS in place, you may receive a sales order from a customer. You’ll record the sale data in the customer record and process any payment (or issue any invoice) in the AR module. In a POS, this transaction can be processed a lot faster. When you think of most retail transactions, you think of quick sales of sundries, where there isn’t time (or a need) to match the sale of the specific item to a customer account.
With repeat customers, or with allowing customers to open accounts with you, it starts to make sense to store information on customers and pair up their transactions with their customer file. If your customer does have an account or a line of credit with your business, it becomes beneficial to have this information recorded in both your POS and AR system. Given that POS transactions will have a lot more action or volume in them, the AR becomes a more clean and condensed place for you to search for and gather specifics on a specific customer’s purchases.