What is an EPOS system?
What is an EPOS System? An EPOS system is a machine designed to help you run and manage your shop or hospitality business. We sell full ones starting at around £595.
An EPOS system is fundamentally a till (or tills) – but it’s also the software that comes with those tills, including your login as a manager. You can understand how your shop is doing, where your inventory is, and how many of products X and Y you’re selling – all through your EPOS. You can even manage your staff, set hours, and integrate with things like your accounting software or online shop.
An EPOS system is made up of three things: software, hardware, and payment processing. Most of the functions of the EPOS, including all of those described above, are dictated by the software. So it’s important to choose the right one! Then, the payment processing is a contract between you and a bank and moves money from customer cards to your account, for a fee.
Finally, we – StoreKit – sell the hardware. Our hardware can be used with any cloud-based software, so if you don’t like the software you choose through us, you can simply switch. This is called agnostic hardware. Other hardware is proprietary, meaning that if you don’t like your EPOS system, you’d need to buy a whole new till. If you choose a micros or TISSL POS, or even EPOS Now – you’re choosing proprietary hardware, so there’s a higher sunk cost.
Choosing can get complex! That’s why we also help merchants choose their software and payments, so if you’re not sure what you need, you’re in the right place. Each of those three parts is billed differently, so it’s tricky to tell what’s the right price.
|Billed||as a...||and it...|
|Software||monthly||flat monthly fee||manages your business|
|Hardware||bought once||one-of-fee||supports the software and payments|
|Payment Processing||per transaction||percent of the transaction||moves money into your account|
But don’t worry. We’re a market, not a shop. We recommend systems from our hundreds of software partners and we make a similar fee whomever we refer you to. Best of all, a software recommendation from us won’t affect your price and could even discount your hardware.
What does an EPOS system do?
The simplest answer to answering what “is an EPOS system?” is by function.
The functions of an EPOS system can be split into five categories. They are: payment processing, front-of-house, reporting, inventory management, staff management, e-commerce and marketing.
An important note – there’s a blurry edge to what an EPOS can do, because software can be programmed to do *anything.* We’d also recommend you use cloud software, for reasons unpacked in this article.
Here’s a list of some of the features you might need for your business. If you’re about to buy, we’d recommend going through this with a pen and paper, and writing down what you think you’ll need in these features – then ask us for the right system on the phone.
Function 1: Front-of-House
The front-of-house features on an EPOS are fundamental.
Simply, EPOS software is designed so that you press buttons and sell items.
Simple EPOS software will allow you to categorise items (e.g. Thunderbirds t-shirt) into folders (e.g. t-shirts) and press those buttons each time you sell something. They will also have modifier/variant capability enough to sub-categorize those items (e.g. white Thunderbirds t-shirt XL.) When we come to reporting, we’ll see that these categories are really useful, because you can look at how well t-shirts are doing, and the Thunderbirds range, rather than looking at the data from each size.
With EPOS software, you should be able to easily “return items” and ring through discounts. You might need your software to “translate” between your output (e.g. quiche) and your input (e.g. eggs) via recipe creation, which means your EPOS will continue deducting items from your inventory when you’re selling things in different formats to how you bought them. If you sell items by weight, look out for software which is capable of handling the input/output mismatch.
Good EPOS systems can handle “schedule pricing” which can either mean happy hours or sales. They should be able to handle “combination pricing” too – which will automatically discount items when there’s an offer on.
The toughest demands of an EPOS system on the front-end generally come from the kind of places which have table service. Here, EPOS systems which are set up to handle table service generally have a map of tables which is visible on-screen. You might need “courses” which send through tickets to your kitchen printers with a delay instruction; or which send each part of the docket to a different kitchen workstation. You may then need to override course defaults as people ask for starters as mains. You’re likely to want modifiers such as “gluten free” to be clearly labelled so they can’t be overlooked by the kitchen. There’s also things like “mixed tenders” (cash and card) which cheaper POS software finds difficult; and the stitching of complex journeys from the bar, to a table, and perhaps pushing two tables together.
|Feature name||EPOS provider level|
|Product Library||Very Basic|
|Product Categories||Very Basic|
|Product search by SKU or barcode||Basic|
|Discount by percentage||Basic|
|Stock availability checks||Basic|
|Sell products by weight||Intermediate|
|Front-end product creation||Intermediate|
|By one get one free||Intermediate|
|Customer facing display||Complex|
|Scheduled pricing (sales)||Complex|
|Link to email marketing||Complex|
|Service-style features for staff||Complex|
|Feature||EPOS provider required|
|Touch button to sell||Very Basic|
|Product Categories||Very Basic|
|Product Library||Very Basic|
|Clear allergen labelling||Basic|
|Order routed to kitchen printer||Basic|
|Product Search by SKU or barcode||Basic|
|Custom Payment Methods||Intermediate|
|Customer facing display||Complex|
|VAT adjustment for eat-in/takeaway||Complex|
|Override course defaults||Complex|
|Bundle / Composite products||Complex|
|Price scheduling e.g. happy hour||Complex|
|Integration with delivery platform||May require additional software|
Function 2: Reporting
The “reporting” functions are designed to help you analyse your business.
Reporting can get really interesting – so it depends how nerdy you want to get about what’s making your business successful. Every EPOS, including “freepos” software, should show you a simple log of what products you’ve sold and when. That said, you might find the cheaper software flexible with how it presents the reports, and it won’t break down what factors affect your product performance. Better software will.
Let’s take a look at those factors. The most important lens through which software can report your performance is the sales data of the business. That means, in addition to price scheduling, it needs to be able to dig into how the price scheduling affects individual performance of individual items so that you can determine how profitable the sales are.
Equally, time of day obviously affects your business – but to what extent? How late would it be profitable to stay open for is the kind of question you can answer with a good EPOS system; and how peak is “peak”, really? When will you need extra staff based on the last time this festival was in town, last year? What kind of surge did you experience?
For both retail and hospitality, site geography and staff are also useful lenses through which to evaluate your performance. Is the table by the bathrooms doing half as well as the table by the bar? Does the shelf by the checkouts really sell better than the shelf at the back? Which geographic makeup was selling which items better? And which staff members are selling the best? Is there a staff member during whose hours, god forbid, a disproportionate number of items are going missing?
A final lens to understand your business through could be “additions” and “accessories” – buying a packet of cigarettes may precipitate the purchase of a lighter, so perhaps you should put those two items together. But what other patterns are hiding in your data?
Function 3: Inventory Management
If you have an inventory, you’ll need inventory management. The basic Freepos systems include a “count” of how many simple items you have sold, and how many items you have left in your inventory.
At its most basic, it should be able to tell a front-of-house staff member whether something is “in stock” or not.
You’ll need a slightly better system to handle inventory mapping, however. That should help you identify not just which items are on what shelves in your basement (essential, for anyone who’s ever had to maintain a basement) but also, which items are available in which of your stores, or your warehouse, with staff permissions such that a staff member can redirect a customer to the other store, or request a transfer.
Also, a good inventory management system manages incoming stock. That could include creating a purchase order, for example, or in some cases, automatically reordering stock back to par stock level. Your system should notify you of any stock price increases – so that you can start looking for a different supplier immediately. You can sometimes schedule deliveries on a good EPOS system.
Then, your system should help you reduce stock shrinkage, which is basically the unexplained disappearance of stock. This will include things like making it very easy for you to make a stock count – because you can use barcode scanners for example, or because it doesn’t force you to do things like input stock automatically.
Function 4: Staff Management & Multi-Store
Why are these two together?
Because staff management is fundamentally about permissions, and determining the hierarchy of who can view what.
Most systems have a log of who worked which day; and often there’s a clock-in clock-out option available so you can log who worked which times without dispute. There’s often limited features around the staff rota and calendar in better systems, but if you want things like “rota swapping”, you’d need HR software such as Deputy.
Most systems will also have basic differentiation around permissions right down to some free software. In particular, you can limit what staff members can access your reporting set-up, including financial data. Multi-store systems are generally on the more complex end for obvious reasons; but expect a greater level of difference between the reporting screens here (usually accessible via online login) and the front-of-house, which will be downloadable apps for your tablet-based tills.
Function 5: E-commerce and Marketing
If you have an e-commerce store, you’ll need an e-commerce platform. You can think of this as a software which is as broad as EPOS in its scope, but is for online rather than in-store.
Some software, such as airpos, or Vend, have their own e-commerce options. Usually these are available for a price. Alternatively, you can sometimes integrate your stock and reporting functions across another e-commerce platform, which you’d buy separately.
There’s a discrete set of software which we’d usually use for marketing. That’s email marketing software, such as MailChimp. Most POS software gives you the option to send customers their receipts, and you can integrate this with your outgoing emails to customers.
Payment processing is the final, and most important, function of an EPOS system. In addition to the software you choose, you need to buy payment processing separately, which you may need to integrate with your software.
There are two things to consider with payment processing. Do you want your payments integrated or non-integrated? Or do you want them to be contract or pay-as-you-go?
Non-integrated payment processing is the type you often see when you go to a restaurant. If there’s a group of you waiting to pay, a waiter might come round and take your individual payments one by one, typing the amount into a card reader each time. This means you enter things twice; once into your card reader, and once into your EPOS terminal.
In contrast, integrated payments is when you’re cuing the exact price through the till. You press a button (“bananas”) and then another (“pay by card”) the price automatically loads on the card reader ready for the customer to pay. This is much faster, and except in the case of restaurants, we’d recommend integrated payments.
Then, pay-as-you-go versus contract:
Contract is the traditional way of taking payments.
Contracts are provided by traditional processors. You’d rent an older-looking card machine made by a manufacturer like Verifone or Ingenico for around £15 per month; and your contract will be with a provider like Worldpay, AIB, or Bluebird. Your rate would normally be different for different cards, and would exist in a “percent plus” format, such as 1% + 2p per transaction. The contract normally lasts for two years and could need buying out of if you want to leave. You’ll also need to undergo identity checks.
Pay-as-you-go is a new type of payment processing contract.
A pay-as-you-go provider such as iZettle, Sum Up, Square, or some Barclaycard options will charge a flat percent on every card transaction before the money enters your account. You would buy your card reader outright from them – which will usually work out much cheaper than the rental fees of traditional processors. The card readers are the newer-looking ones. They would charge a flat percent such as 1.75% on every transaction, and you can start or stop taking payments whenever you like.
Overall, we’d expect that pay-as-you-go will be cheaper for merchants with average transaction size of less than about £6, such as coffee shops; or who turn over less than £6K per year. Otherwise, a processing contract would be cheaper – but you may still prefer the flexibility of pay-as-you-go.
Which you choose will affect the action you need to take:
|Integated||Check you payment and EPOS providers are integrated – then set up the integration through your EPOS||Call us and ask about a payment application, which is the connecting bit of software you'll need. This could be a discrete fee.|
|Non-integrated||Use pay-as-you-go processor and any EPOS software. Just buy the card reader, and begin!||Use the cheapest traditional processor and any EPOS software. You'll need to undergo some credit checks before you can accept card payments, and it will take around a week.|
If you’re using a traditional processor, we’d recommend executing a bidding process. What does this mean?
Well done for making it down here! Good news – the hardware is the easiest part.
There’s a choice between agnostic hardware and proprietary hardware. We think this as a no-brainer. If you buy “proprietary” hardware with an older software provider like micros or EPOS Now, it cannot be used with any other software. You’re locked in – and you’d need to buy all the hardware again to change your till system.
If you buy agnostic hardware, such as everything available through this site, you can use any cloud-based software available for agnostic software use.
You can even use the iPad as a regular leisure iPad if you ever decide to get rid of the till.
A system is made up of:
- A device – it could be a phone, but is usually a tablet. Check out our tablets for sale.
- A tablet stand. Check out our tablet stands for sale.
- A cash drawer. Check out cash drawers.
- The only tricky one is the card reader. A card reader is always part of an EPOS system, but you will either rent your card reader through your payment provider or buy it through us depending on whether you choose pay-as-you-go or contract. If you’re on pay-as-you-go, and you sign up through the StoreKit website, remember that your card reader can be discounted if you sign up through one of our affiliate links.
- A kitchen printer
If you’re not sure what hardware you need, and you’d like to buy all your bits in one go, check out our kit-builder – you can play around with the different combinations of kit which might work for you, and see the different prices.
And that’s it! That’s everything an EPOS is, and does.