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The robust progress in the IT industry during recent years has also evolved businesses. With the revolution of advanced software and hardware technologies, the records associated with any retail business are digital. The electronic maintenance of records saves resources, is more reliable, and can be backed up with a minimum chance of data loss.

The Point of sale systems have been specifically designed to keep track of all sales orders, inventory records, POS transactions, customer profile management, and all other activities being carried out in a retail store. Popular POS systems aiding businesses in improving their sales include Magestore’s Magento POS, SquareUp, Lightspeed, Shopkeep, etc.

What is POS transaction?

The POS transaction takes place when a payment is made by a customer at a cash counter or online store in exchange for products or services provided to them. In general terms, a point of sale transaction occurs whenever an activity involving the conversion of assets, liabilities or equity occurs.

The exchange of cash and goods can occur in any medium depending upon the nature of the business or store from which the purchase is being made. The transactions involve two user roles: a buyer and a seller. The systems comprising of software and hardware which keep track of these transactions are termed POS or Point of sale systems.

Magestore POS screen

As a result, any monetary exchange taking place through a cash counter integrated with a POS software and hardware is known as a Point of sale transaction. Retailers purchase the POS system to keep an eye on the number of transactions being made on a daily, monthly, or annual basis. 

The POS systems are also responsible for calculating the amount of cash generated each day on sales of different products. Other amazing features include inventory management, POS report generation, customer profile management, stock management, predicting stock requirements, etc.

Utilizing a POS system for recording and monitoring Point of Sale transactions will help retailers and sellers maintain reliable records. It is also to measure the progress of their businesses in an effective manner.

These systems also help the sellers in devising strategies to improve sales by looking at the demand and sales of each product and the impact of sales procedures already implemented. It can also generate POS reports in accordance with the input data.

POS transaction types

Each sale or purchase involves the transaction of money but the medium through which this money is being transferred can vary in different cases. The two major categories of POS transactions are mentioned below along with precise descriptions:

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POS transaction for online orders

The POS transactions which occur while making a purchase from an online retail store belong to this category. In this case, the store is not physically present, but the buyers can view product details online and order desired products that are delivered to their doorstep in some time.

The Point of sale transaction occurs when the buyer enters his/her credit card information and the money is transferred to the seller in the online category. In the case of unsatisfying product quality or faulty items, the amount is also refunded to the customers in some cases.

POS transaction for offline orders

When a buyer visits a store, chooses certain items, and makes payment at the cash counter on which a POS is installed then this category is termed as an offline point of sale transaction. In this case, the money is directly received by the seller without any delay.

These online and offline transactions are further categorized into three different types:

best practices with order editing process

Sales

When a product or item is sold whether it’s a physical store or an online retail shop then this type of transaction takes place. In both cases, the cash or payment is directly received by the seller. The number of products sold, the amount of cash received, the date and time of purchase, the employee handling the sale, and the customer information are recorded in the POS system in order to monitor these factors for future predictions.

Purchases

This Point of sale transaction occurs when a buyer purchases a product from any medium and its return makes a payment. All the information associated with the purchase is recorded on the POS system.

Receipts

After the buyer has successfully purchased his desired products a receipt is generated for the esteemed customers which contain details like the amount of cash paid, number of products, name of items purchased, date and time of purchase, etc. This receipt is handed to the customer so that they can also keep track of the purchases they made at a retail store.

POS reconciliation and its relationship with POS transaction

The term POS reconciliation is becoming extremely important in small and large businesses and it is used when the accounting records of POS data sets are compared with each other. This is done to ensure that the recorded data and accurate.

Point of sale reconciliation is also explained as the calculations made to verify that the amount of cash in the cash counter is equal to the number of sales made on that day/month or year.

Refund without receipts check

The POS reconciliation and POS transactions closely relate to each other as both are used to verify each other’s data. The data extracted with the reports generated in a Point of sales system is cross-checked through Point of sale reconciliation methods. As a result, the inflow and outflow of cash are recorded perfectly.

Benefits of POS reconciliation

Eliminate accounting errors

The POS reconciliation methodology removes any possible human errors in the calculation of finances and helps you analyze data in an accurate manner.

Secure business deposits

The cross-checking carried out during this procedure also helps you to be sure about the cash amount reserved in your account so that future investments or purchases can be predicted in an accurate manner.

Stability 

The Point of sale reconciliation process also accelerates stability in the management of your business-related finances. The exact estimation of available cash helps you plan ahead of time and carry out your tasks smoothly.

Identify unauthorized transactions

The double-check of all the sales and purchase-related finances also helps you identify the transactions which are not authorized and minimize the risk of unnecessary cash outflow.

To sum up

We have gone through a basic understanding of POS transactions and POS transaction types. If you want to explore more about POS transaction or any other aspects of retail, feel free to talk to our consultant.

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Kate N.

Author Kate N.

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Join the discussion 2 Comments

  • Murtaza Bharmal says:

    Retail business has some definite changes every year and with technology upgradation, owner also has to make changes in their business process. With point of sale I am able to update my work process seamlessly. Retailers can try this out once if it suits their business.

  • Claire Masters says:

    I now understand that POS has two kinds of transactions; one mainly happens online where there is no physical store and payment is usually made via credit card and the other one is the traditional offline transaction in a real store. If I were a retailer, I would really understand how a management system could be helpful and both these transactions, especially on a larger scale.

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Magestore | POS for Magento

Best POS (Point of Sale) System

for Magento

A complete omnichannel POS for Magento retailers
Sell online or in your physical stores seamlessly with real-time data synchronization.

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What is Magento POS

A Magento POS (point of sale) system is software integrated with the Magento platform to synchronize data between your online and offline stores and facilitate retail operations. Magestore POS is a web-based and Magento-native POS which requires at least one Magento website to work.

Who needs Magento POS system

The Magento POS system is developed for retailers with both Magento eCommerce websites and physical stores, and want to use the Magento website as a centralized place to manage all sales data and sell both online and offline.

Some features of Magento POS system

A basic Magento POS can work as a cash register to create orders, add discounts and taxes, print receipts, and manage sales. But a complete Magento POS system can assist you with more advanced tasks, such as inventory control, supplier management, loyalty programs, etc.

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After you complete the registration form & schedule a meeting with us, we'll contact to ask for your confirmation. This demo session is completely FREE & requires no commitments.

1. Where we'll discuss

We do screen sharing, so the demo will be conducted using Google Meet.

2. What we'll do

Our specialists will guide you through the POS solution and answer any questions you have. All to see if our POS system fits your business requirements.

3. What you'll get

  • A LIVE demo session to see how Magestore POS works
  • A FREE demo site to explore every product feature
  • A FREE consultation with our expert to discuss the best-fit solution for your business.

4. Additional information

  • A demo typically lasts for 45 minutes, but we can adjust the duration based on your needs
  • No preparation required but it's nice to have your requirements clear
  • Additional team members are welcome to join
  • If you want to see how Magestore POS works in reality, you can contact one of our customers and ask for their experience
  • Magestore doesn't do cold-calling, we only contact you on request.

Magestore | POS for Magento

About the Magento platform

1. What is Magento?

Magento is an open-source platform that helps retailers create eCommerce websites, released on March 31, 2008, by Varien and developed on Zend Framework. In 2018, Adobe acquired Magento with a price of $1.68 billion. There are currently about 270,000 eCommerce websites running on Magento in 2022.

2. Why do retailers choose Magento?

Most of our customers say Magento is speedy and more customizable than others; it is suitable for medium and large enterprises or fast-growing businesses with complex requirements/customizations.

Not sure if you're using Magento, check your website here!

3. What to do next?

  • If you are new to Magento or searching for eCommerce platforms, you can explore more about Magento in this article.
  • If you are looking for Magento website development services, please reach our dedicated service team here.
  • If you've already had a Magento website and are searching for a POS system, please close this pop-up and continue exploring.