5 Must-Have Retail POS Software Features to Streamline Your Small Business

(8 minutes to read)

Retail store owners operate on tight margins, and have many constantly moving parts. This becomes especially difficult to manage efficiently when using manual methods. A point-of-sale system is a great tool to manage all these moving parts while helping to ensure customer satisfaction, but finding the right POS for small business is no easy feat.

You’re not alone in feeling this way: of the thousands of small merchants we talk to each year, 64% of single-store retailers still don’t have a POS system in place.

“POS can help businesses in a variety of ways, including managing inventory, providing customer management data, identifying opportunities and weaknesses in the store and much, much more,” says Nicole Reyhle, founder of retail publication Retail Minded and author of “Retail 101.”

To help, Software Advice identified the following five must-have POS features to look for in a system. These features can streamline the management of your store and can lead to more positive customer experiences. We’ll also share advice from retail store owners who are using POS software successfully and highlight some of our own data on POS systems and retailers.

Click below to jump to a section.

 Sales reporting and analytics

 Customer management

 Employee management

 Inventory management

 Point of sale

Sales Reporting & Analytics: Transparency Into Data

Sales reporting and analytics functionality allows you to capture and analyze your store’s sales data. Not only does this automatically keep track of what’s selling well, it also shows how much revenue you’re making on each product. This allows you to identify and focus on driving sales to your top money-making items.

Among the POS buyers who contacted Software Advice for help, 76 percent request sales reporting and analytics capabilities.


Steve Lankler is the senior vice president of marketing at Direct Capital, a small-business financier of POS systems and other business tools. He believes the data points that sales reporting and analytics can capture allows owners to manage their shops more effectively.

This is the case for recent POS adopter Erica Rios, owner of Texas-based boutique The Crowned Bird. She says her store is operating much more effectively since adopting a POS system with sales reporting and analytics.

“With one click of a button, I can see what our sales were for that day, what our returns were and how we’re doing on inventory. The old way, without having [a POS], I’d have to look through all the data on the books and add it up manually.”

Erica Rios, The Crowned Bird

It’s this transparency and insight into your revenue drivers—which simply counting handwritten tickets can’t offer—that makes sales reporting and analytics a must-have for retailers.

Example: Sales Reporting and Analytics in Action

Lightspeed allows you to view sales totals by different filters, and offers mobile device accessibility to view your store’s performance from anywhere

Customer Management: Attract Valuable Customers

Customer management capabilities enable retailers to proactively increase the quantity of high-quality customers. These applications collect data on your customers’ purchase histories, allowing you to identify your most valuable shoppers based on their spend. This offers an additional layer of transparency that retailers without POS systems simply can’t obtain.

Identifying regular shoppers is vitally important: Two-thirds of respondents to our survey say they are likely to stop shopping at a given store if they aren’t recognized as loyal customers.


“There’s much greater intelligence around buyer behavior with these [POS] payment systems,” Lankler explains. “It’s allowing merchants to get more control around buyer data. You start to layer on this new opportunity to understand who your customers are and build loyalty programs around them.”

It’s the ability to put a face to this buyer data and build customer profiles that Lankler sees as beneficial. These profiles allow you to easily store and manage customer purchase histories, contact information and even loyalty points. This is exactly how recent POS adopter Amber Hayes, owner of Louisiana-based clothing store Kennedy’s Chic Closet, is planning to utilize her new software’s customer management capabilities.

“I’m planning on starting a loyalty program where if customers spend a certain amount of money, they get rewarded with discounts,” says Hayes.

As Lankler and Hayes describe, the insights provided through customer management can help you pinpoint your most loyal customers. You can then target these valuable customers with rewards, promotions and discounts to keep them coming back.

Example: Customer Management in Action

Revel offers customer profiles, purchase history and points tracking, which offer key insights into your customers’ purchasing habits

Employee Management: The Face of Your Business

Though it can be easy to overlook, employee management is a key component of a well-run retail business. At the minimum, employee management capabilities, such as shift scheduling and time clocks, keep track of the hours employees are working.

More advanced systems can also assign sales commissions to employees. Major benefits of these applications include their ability to reduce overhead and to provide employees with easy access to their schedules.

Our consumer survey articulates just how important it is for employees to be managed effectively: 85 percent of respondents are likely to stop shopping at a store if it’s understaffed.


“I track all employees’ hours using the employee time clocks [in my POS system],” Hayes says. “I can also assign commission with the employee management function.”

Hayes incentivizes her employees with end of the month bonuses for the top seller: something she never could have done before her POS system.

“Before, I was having to do everything by hand,” she explains. “I was not keeping track of commission because I had no way of seeing what exactly each employee was selling. They were even just writing down what time they were coming in and coming out.”

This is where employee management applications shine. They allow you to monitor who’s working, how long they’re working, how much money they’ve brought in and how many hours they’ve worked in the current pay period. This last aspect allows you to monitor for (and reduce) overtime.

Example: Employee Management in Action

ShopKeep offers a number of ways to keep track of employees, including employee logins, time clocks and staff lists to track hours worked during a given pay period

Inventory Management: Eliminate Manual Inventory

Managing the quantity of on-site inventory plays a vital role in the success of your store. Inventory management capabilities give you an on-demand window into your stock. This enables you to eliminate inefficiencies, such as manually counting inventory and digging through “the back” for a specific item.

Our buyer data shows inventory management is a must-have for retailers, as 74 percent of POS buyers we consulted request it.


“Being able to know what my inventory is [is] huge,” says Deborah Cafiero, owner of Indiana-based boutique clothing store Judee’s. “I needed a system that separated items by size and season and color. I looked for something that was more attuned to apparel so that I could know at any given time what I had for each season, because you have to remove the things that are out of season.”

What’s more, proper inventory management is vital for retaining customers. In all, 83 percent of consumers surveyed are likely to stop shopping at a store that’s out of stock of their desired item.


Being able to identify and track items at specific levels such as size, season and color enables you to identify trends at your store and ensure that popular, in-season products are well stocked. This makes it easy to monitor and resupply your top-selling items, as well as to mark down low-selling products to phase them out.

Example: Inventory Management in Action

Vend allows you to view detailed information for each item in stock, including price, quantity and supplier codes

Point of Sale: The Workhorse of the POS System

This last entry may seem obvious, but the software and hardware supporting the checkout process definitely warrants mentioning. Since checkout serves as the primary interaction between you and your customers, it’s critical that nothing goes wrong at this stage. A POS system reduces the potential for human error by automating such checkout tasks as item look-up and price calculation.

“We used to have to hand-write out tickets, and that was horrible, especially if we were busy. The POS allows us just to scan [the items being purchased], and then it calculates everything for us.”

Erica Rios, The Crowned Bird

Key capabilities you’ll want at checkout include receipt printing and barcode scanning. These are the top-requested add-ons from POS buyers we advised, with 23 and 14 percent requesting them, respectively. Some systems come with the necessary hardware, while others require you to purchase it separately.

The speed with which retailers complete transactions needs to be taken into consideration. Consumers will lose patience if they have to wait too long, as indicated by the 82 percent who’re likely to stop shopping at a store with long waits and lines.


Rios’ POS system has accelerated her checkout process and minimized mistakes by automating product identification and price calculation.

Example: Point-of-Sale Functionality in Action

Cashier Live offers functionality to simplify your transaction process, including barcode scanning, inventory look-up, credit card processing and receipt printing

What’s the Next Step?

We know selecting a POS system can be an overwhelming process. That’s why our team of software advisors provide free phone consultations to help you build a shortlist of POS systems that are a good fit for your business. Let them help you choose a system with these five must-have tools to simplify and streamline your store operations—and help your business grow.

If you have comments or would like to obtain access to any charts for the above data, please contact justinguinn@softwareadvice.com.

To collect the data in the charts, we conducted a four-day online survey of three questions and gathered 200 responses from random consumers within the United States. We screened our sample to only include respondents who frequent independent retailers multiple times a month. For the buyer data highlighted throughout the report, the detailed methodology can be found here.

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