How Does Square Point Of Sale Work: A Guide To The Basics

If you run a small retail or service business, a pop-up shop, beauty service or a small specialty business like a coffee shop, for example, you know how important fast and friendly customer service can be to your clients. Not only can it bring you more repeat customers but also play in favor of positive word-of-mouth advertising. Poor service, on the other hand, can drive your customers away. 

This article will introduce you to Square Point of Sale (POS) and explain why it could be a great addition to your business. We’ll walk you through setting up your first POS system so that you can manage sales and track inventory efficiently. Once you’ve read this article, you should have everything you need to get started with Square and positively impact your business today.

Keep on reading to learn more about Square POS:

1. What is Square Point of Sale?

2. Why use Square Point of Sale?

3. Pros of Square POS

4. Cons of Square POS

5. How to set up Square Point of Sale

6. Final words: is Square Point of Sale right for you?

What is Square Point of Sale?

Square Point of Sale (POS) is a cloud-based business management system that allows you to manage inventory, track sales, collect payments, and more. It’s one of the top POS systems that millions of businesses use daily. 

The system is virtual and runs from any device, including a computer, laptop, or even your phone. This way, you can go without a bulky or expensive computer system at your business location. Square is a cloud-based POS system, which means you can access your data from anywhere. Using Square POS, you can process credit/debit card transactions, track inventory, manage employees and customer relationships (CRM), etc.

Why use Square Point of Sale?

Square POS is a great choice for small service businesses that want to grow and attract more customers. With Square POS, you can drastically improve your overall customer experience and, consequently, encourage more sales. Look at some examples of what you can have using Square POS:

• Accept more payment methods. Square offers a variety of payment options, including credit cards, debit cards, gift cards, and more. They have even recently partnered with Bitcoin to allow sellers to accept payments in Bitcoin.
• Sell more. Customers love being able to use their credit/debit cards. They love the convenience, rewards, and security these payment methods provide.
• Track inventory more efficiently. Square offers inventory management. You can track what products are selling and what’s out of stock and monitor your inventory levels.
• Keep track of customer data. You can track customer data to identify customer trends and patterns. You can use these to inform future business decisions and improve customer service.

Pros of Square POS

Square POS provides many benefits for food service businesses. Let’s get acquainted with the most prominent Square POS advantages that make it stand out from the competition.

• Square POS is free. You can kick off with Square POS absolutely for free. There is no installation, setup, or monthly fees, and — as soon as you register your Stripe account — you receive a free magstripe card reader to accept credit card payments. The reader connects to iOS or Android smartphones and tablets. 
• Integrated online store. Yep, you can set up an online store upon registering with Square, which is also free.
• Transparent processing fee structure. Square POS offers transparent flat payment processing rates for all major credit card types with no chargeback fees.
• Seamless integration. Square POS integrates with other Square small business tools, such as employee management or CRM, etc., allowing the creation of a single business ecosystem.

As you can see, Square POS is a system tailored for small business owners at the starting level. It allows them to kick-start their business and receive payment almost instantly, manage simple inventory, employees, and customers within a single business environment.

Cons of Square POS

While Square POS is a good option for simple retail and service businesses, it does have a few disadvantages they might want to consider when scaling for growth.

Here’s an overview of the biggest Square POS cons.

• Free plan transaction volume limit. If you expect to process high-volume transactions, more than $10,000 per day, the Square POS free plan might not suit you, so you’ll have to switch to a paid plan to proceed.
• Additional costs. Square is a free POS system, but you’ll have to pay a per-transaction processing fee. This fee will increase as your transaction volume increases.
• No cash drawer. Square POS isn’t compatible with cash drawers. You’ll have to process all payments as credit/debit card transactions.
• Limited inventory management. Square offers inventory management. However, its inventory management system isn’t very robust. If you sell products with a more complex inventory structure (such as medical supplies), Square’s inventory system won’t work for you.

How to set up Square Point of Sale

With all the above in mind, should you decide Square POS is the right fit for your business, we’ll quickly go through setting it up. Square POS is ridiculously easy to set up. You’ll just need to follow the simple steps described below.

1. Install Square on your device. You can download the Square app from the app store. You’ll need to create an account when you install it.
2. Connect your device to WiFi. To ensure a flawless installation, your device needs to be connected to WiFi during the process.
3. Connect Square to your device. Open the Square app on your device and connect it to your Square account.
4. Set up a cash drawer. As Square doesn’t connect to cash drawers, you’ll need to set up a cash drawer in your device’s app.
5. Set up your inventory. Square allows for simple inventory management. Should you believe your inventory is more complex, you might want to consider connecting a third-party inventory management system.
6. Set up your sales and customers. You’ll need to set up sales and customers in the Square app. If needed, you can add cash tips to sales in the app.
7. Finalize setup. Done with setting everything up in the app, you’re ready to use your Square POS system.

Final words: is Square Point of Sale right for you?

Square POS is a great option for small retail and service businesses. It offers many benefits and can help you sell more, track inventory more efficiently, and keep track of customer data. Thanks to Square integration with accounting systems, it brings the added value of the hands-on bookkeeping of Square transactions. If you expect to process high-volume transactions or need to use a cash drawer, you might need to implement an additional system that works with cash drawers. However, Square POS might help businesses kick-start their sales and easily accept and manage payments from the very first days of the business operation.