POS systems manage inventory via special inventory management software that tracks inventory levels, sales, orders, and deliveries. This software is used in the manufacturing industry to create bills of materials, work orders, and other production-related documents. Companies use POS systems to manage inventory to avoid product overstock and outages. This technology organizes inventory data that was stored in spreadsheets or on paper before.

The main benefits of POS inventory management technologies are:

Tracking Inventory in Real Time

Businesses of any size need to be able to track inventory in real time. POS inventory management technology can generate reports and let business owners track and collect data. Entrepreneurs can access cloud-based inventory data from a wide range of internet-enabled devices, including tablets, smartphones, laptops, and traditional desktop PCs. What is more, users do not have to be inside business premises to use web-based inventory program and can access the inventory software while on the road.

Fast Deployment

Deploying web based POS inventory software is very easy. All a business owner needs to do is sign up for a monthly or annual subscription and can begin using the inventory management software via the internet.

Reduce Hardware Expenses

Because POS system software is usually cloud-based, business owners do not have to buy and maintain expensive hardware. Instead, they can invest their capital and profits towards expanding the business to reach more clients. Cloud-based inventory management solutions also eliminate the need to hire a large IT workforce. The service provider usually takes care of maintaining the inventory software.

Easy Integration

It is easy to integrate cloud inventory management software. For example, business owners can integrate the inventory software with their cloud-based accounting software or eCommerce store. The rise in popularity of third party marketplaces, such as eBay and Amazon,  has motivated cloud-based inventory management companies to include the integration of these marketplaces with the rest of a business owner’s retail business, allowing them to see and monitor stock across all channels.

Improved Coordination

POS inventory management programs also allow departments within a company to work together more effectively. Inter-departmental communication also makes it simpler to restock because you have this information. You also know which customer orders have been shipped and which haven’t. Operations can be more efficient and smoother, enhancing customer experience.

Accurate inventory data can also have a huge influence on a company’s bottom line. It allows you to see where workflow issues and bottlenecks are and to calculate profit margins and break-even points correctly.

Enhanced Effectiveness

POS inventory management systems increase efficiency in several ways. One is inventory monitoring in real time. A single change can replicate itself throughout the company instantaneously. As a result, companies are more confident in the accuracy of the information in the system, and management can generate reports and track the flow of supplies and products more easily. Moreover, cloud-based solutions offer greater accessibility.

Disadvantages of POS System Inventory Management

Cloud-based system data is managed by a third party provider. Hence, you run the risk of data being accessed by unauthorized users. This is why you should always inquire into the safety features.

Limited Flexibility

System and software upgrades will be performed based on the provider’s schedule, so businesses may experience some frustration stemming from limitations in flexibility.

Dependency

Since the vendor manages maintenance, users are essentially fully dependent on the provider.

Integration

Not all on-premises systems or service providers can be synced with the cloud software used.

Why Is Inventory Management Important?

It is easy to focus on ease of use, design, and the price when casually shopping for a new point of sale system. For most retail or restaurant establishments, inventory management is one of the most important components of a POS system. It’s imperative to exercise caution so that you don’t find yourself facing an immediate issue upon purchasing your POS system. If the items you sell are difficult to categorize or upload or if you run a really busy restaurant and ingredient tracking isn’t up to snuff, you might end up losing valuable time. What’s worse, the inefficiency could cut into your profits.

Below, we’ve reviewed two POS systems with solid inventory management systems in place.

Vend POS is great for small retailers, but also major franchises and everything in between depending on the plan you get. This is because there is no limit to the number of stores a client can have. There is a free version for very small businesses. The solid, reliable, and flexible solution features user-friendly packages to accommodate almost every type of business.

On the downside, there are no item modifiers for table management and tipping. The rich inventory management functionality more than makes up for that, however.

Toast is an excellent POS system that is best for small businesses. For example, small restaurants can increase revenue and streamline operations easily thanks to robust inventory management. This handheld POS lets your staff spend more time with guests and less time running around.

Toast is a durable POS that has been shown to improve guest experience and table turn time. It is easy to connect the front of house and back of house in real time and access menu item details for allergy information or drink recommendations. Moreover, you can also view chits by modifier, ingredient, and allergy information at a glance, allow guests to pay and tip.

Other nice features of this POS system are a customizable loyalty program, the option for guests to leave a personalized message, and easily redeemable digital gift cards. There is also a quick order feature. Toast was designed as a solid solution for all types of food service businesses, including small quick service and full service restaurants.

Conclusion

Most of the best POS systems on the market come with integrated inventory tools, but each program is different in terms of the functions and features on offer. There’s really no reason to stick with a system that doesn’t help you analyze your stock fast and determine how to increase your profits.