2025's Best POS Systems for Small Businesses

Customize your transaction experience, organize inventory, and record sales with the best POS systems in 2023. Compare pricing, see hardware, and find what works best for your business.

Last Updated: April 2025

What is a POS System and How Does It Work?

A Point of Sale (POS) System combines software and hardware technology to help businesses organize, perform, and record sales.

Organize Inventory

Every type of business—whether retail, restaurant, or hospitality—manages some form of inventory. A POS system’s first function is to organize your business’ unique inventory by categorizing products, adding price values to items, and keeping track of the number of units in stock.

For example, if you run a food truck that sells street tacos, your POS system would help you organize your menu items, add prices to each menu item, and notify you when you’re running low on a specific ingredient.

Perform Transactions

When it’s time to actually sell your product or service, a POS system can provide the tools needed to process the transaction. Think of the modern POS system as an intelligent cash register—when a customer comes up to make a purchase, you can use your POS terminal to ring up the purchase, accept the customer’s cash or credit card, and provide a receipt of purchase.

NOTE: Some POS systems do not process credit card transactions, requiring business owners to instead search for third-party credit card processing companies. You can learn more about that service, here.

Record Transactions

When a customer purchases a product or service, a modern POS system will also record several important data points. These may include their contact information, the price of the product, the number of sales, the time of day, the date, and more.

Over time, your POS system will gather enough data to run analytics on your data set, resulting in key insights that could benefit your bottom line. Some of the insights may be on the individual level, like customers collecting rewards points. Others may be larger scale; you may find that some products have seasonality–they sell better in some months and worse than others. You can use these insights (among others) to help improve sales and strengthen marketing campaigns.

Software for POS Systems

One of the great features about POS software is how it can be customized based on both your industry and your specific business. Out of the box, though every POS system includes a few universal features:

  • Inventory management: Most POS systems allow business owners to create a customized inventory of products or services, complete with pricing details and the number of units in stock.
  • Payment calculation: Like any cash register worth its salt, your POS system can calculate the total amount a customer owes during a transaction, as well as any change you may owe the customer after payment.
  • Payment validation: After a payment is complete, your POS system will create receipts for both you and your customer.
  • Record keeping and statistics: Most POS systems will store sales information, which can later be crunched by built-in analytics tools.

Hardware for POS Systems

As a business owner, you can add a POS system into your workflow in several ways. Some POS setups require lots of hardware, others require none. Setups include:

Terminal Hub+

Terminal hubs act as the command center for business transactions. Your primary piece of hardware will be the terminal itself: an internet-connected device that has your POS software of choice already installed. In addition to the terminal, many business owners will purchase bonus hardware such as credit card readers, cash registers, receipt printers, and UPC scanners.

Tablet or Desktop Repurposing

Instead of purchasing a stand-alone terminal, POS system software can often be installed on devices such as laptops or tablets, repurposing them for business transactions. In addition to purchasing cash registers, receipt printers, card readers, and UPC scanners, some business owners may purchase specialized stands or cases that make it more convenient for customers to enter their cards and sign a receipt during a transaction.

E-Commerce

Some businesses will forgo all hardware, sticking instead to an entirely online presence. If your business is solely e-commerce, you can oftentimes purchase POS software to fully integrate into your online store. This way, you can get all of the benefits of a POS system without having to purchase any hardware.

POS Features by Industry

POS systems are designed to fit the workflows of one of the three primary industries: retail, restaurant, and hospitality. Here are a few unique POS features for each industry:

Retail

  • Inventory notifications: Receive an automated notification when an inventory item reaches a critical minimum, before you sell out of the product in-store.
  • Price slashing: Quick buttons and toggles make it easy for employees to enable complex discounts for sales and promotions.

Food Service

  • Kitchen display system: Organize menu items, alterations, and customer requests into easy-to-scan digital and physical tickets for cooks, bartenders, or waiters to view while on the job.
  • Integrated floor plan: Customize the way you handle transactions by building a unique POS floor plan, making it all the easier for waitstaff to record customer orders and pay by the table.

Hospitality

  • Appointment scheduling: Schedule customer appointments and reservations into your POS system’s ongoing calendar so you’re always on top of tomorrow’s workday.
  • Multi-industry flexibility: Dip into the unique features of other industries, such as running a retail POS system at your golf course’s pro shop or operating a unique floor plan at your hotel’s restaurant.

For even more information on POS features by industry, check out our article detailing these features in greater detail.

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Frequently Asked Questions (FAQ)

POS systems enable business owners to juggle a variety of essential business tasks all at one time. If your workday consists of making sales, categorizing inventory, running Customer Relationship Management (CRM) software, or crunching performance numbers, a POS system could save you time by doing all of these things at once.
The total cost of a POS system; including hardware, software, and credit card processing capabilities; will vary greatly for your business’s specific needs. The best way to find out your specific price quote is to speak with a customer representative from the POS company of your choosing. With that caveat in mind, POS systems typically charge their customers in at least one of three ways, including subscription pricing (per month), transaction fees (per credit card sale), and per hardware (per wholesale price of unit).
Yes, although offline transactions are usually considered a last resort. Many POS systems allow business owners to operate offline in the case of an emergency, with many of the essential functionalities remaining in place. Offline mode shouldn’t be used as a permanent solution: you will need a primary internet connection in order for your POS system to work properly in the long run.
In addition to the inventory management, transaction capabilities, and analytics tools built into generic POS systems, restaurant POS systems are designed to ease ever-changing menu items and seating charts. Many restaurant POS systems feature a customizable floor plan to help waitstaff complete transactions, as well as a kitchen display system that makes it easier for cooks or expos to see upcoming ticket requests.