Tag: point of sale

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QuickBooks Point of Sale and Hosting

QuickBooks Point of Sale in a Hosted Environment

Retail operators and multi-location store owners often face difficulties in attempting to bring cohesion to their accounting, financial, and operational data.  In so many situations, the retail location –  where inventory is sold and money is exchanged – is far-removed from the administrative location where the financial systems and business reporting exist.  It seems that the best case scenario is to create a means for the remote (retail) locations to operate with real-time access to centralized customer, inventory, and financial data from a primary source. Application hosting services can provide this centralization,  and a platform for standardization, of systems.  Further, the application hosting model can deliver security and managed service which ensures that the systems are available and performing as required.

Even though hosted applications and centralization of the systems and processes in a POS environment may appear to be the right answer, there are caveats and considerations that speak to the realities of today’s technologies.  These caveats should be strongly considered prior to undertaking any reformation of systems and processes relating to the retail locations.

The first fundamental reality which must be addressed is connectivity.

While a retail or store location may enjoy Internet or network connectivity, there should be great consideration given to the wisdom of connecting these locations only and exclusively via remote access systems.

Retail is a dynamic business, and the sale is made when the customer is ready and willing to buy.  Any retail location must be able to process this sale in order to meet the immediacy of customer demand.

 

If the systems in use are exclusively accessed remotely, then the connectivity to those systems become of paramount importance in the ability to do business.  At the very minimum, any remotely-served retail location should have redundant connectivity options, with local personnel being familiar with the connection failover process.

A second strong consideration for a hosted or remotely-deployed POS or retail system is local device support.

Devices, such as card readers, scanners, cash drawers, receipt printers, etc. typically require local PC/computer drivers in order to function.  When served by a remote system, this connection between the host and the local devices may not function.  Limited device support for POS hardware can significantly impact the location’s accuracy and efficiency.

QuickBooks POS was designed for use on a single-user PC environment.  The application is not well-suited to a hosted deployment for multiple users, as the software only allows one instance of itself to run on each computer.  This alone eliminates the benefits of a server-based computing model for POS, whether onsite or hosted. The multi-lane option requires all stores to be connected via the same LAN, so remotely connecting multiple locations isn’t really do-able, either.  This is why there is a multi-store option, allowing the various stores to operate independently and send the daily data back to a master location via a store transfer or email process.

In many cases, the suitable answer is to keep the POS systems running on the local computers and network, and run the accounting applications on the host. The host system, whether it be an on-premises server or a location in the cloud, could also run the software which integrates the POS data with accounting.

integratedFor example, with an installation of QuickBooks accounting the point-of-sale “master location” on the host, the core financial data is able to be secured and protected in the virtual environment without risking lost productivity (and lost sales!) due to connectivity failures at the retail locations.  The end-of-day process at each location is to then copy the POS data to the host system where it is integrated with the accounting system. If the POS system is something other than QuickBooks POS, it simply means that there is another piece of software – the specific POS integration tool – required to transfer the POS data into the accounting software.  QuickBooks desktop accounting integrations are available for most popular POS systems including Micros, POSiTouch, Aloha and others. The integration software (often just a QuickBooks plug-in) would be installed on the computer running QuickBooks, enabling the entry of the POS data into the QuickBooks accounting system.

It makes a ton of sense to centrally manage the accounting and financial data for the business, in a secure location away from the retail storefront and frontline workers.  It’s just that the accounting is easier to host and makes more sense to run as a centrally-managed, hosted solution.  POS, on the other hand?  Not so much.

For a small market vendor or the largest of retail stores, point of sale needs to be up and running at all times, driving receipt printers and cash registers/drawers and barcode scanners. Run the POS system on-premises where the action happens, but keep accounting and finance safe and secure somewhere else.

jmbunnyfeetMake Sense?

J

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Payment Card Roll Call: “Not Present” fraud likely to increase as EMV takes hold

Payment Card Roll Call: “Not Present” fraud likely to increase as EMV takes hold

rollingballNo retailer wants to become the next Target (pun intended).  Payment card fraud costs businesses and consumers billions of dollars every year.  What’s even more frightening, many of the breaches in the news are the result of innocent participants inadvertently granting access to the bad guys.  The Target breach in 2013 exposed the data of 110 million payment cards.  Hackers got into the network using perfectly good credentials of the HVAC company.  Sometimes password security just isn’t enough, which might bring in to question the security of all those SaaS subscriptions and online shopping sites folks use these days.

EMV chip technology, the standard around the world which has just recently become a standard in the United States, has done a lot to stem the tide of credit card fraud in other countries.  As it was implemented in various countries, guess where it pushed the fraudsters?  Where the anti-fraud technology wasn’t, of course! The United States was among the laggards in requiring EMV chip technology for payment cards, opening the door for bad guys and turning the US into a veritable haven for credit card fraud, “accounting for nearly 50% of global fraud losses, according to the Nilson Report[1]”.

EMV chip (or chip and pin) technology will go a long way to prevent credit card fraud for businesses accepting payment cards… in-person and counterfeit card fraud, anyway. Online retail, on the other hand, not so much.  A chip on the card doesn’t really help when the transaction is completed with the card not present (CNP).  Some industry analysts suggest that CNP fraud losses will exceed $6 billion within the next few years, making e-commerce and online payment security a high stakes game for even the smallest of retailers.  As it gets more difficult to hack the payment system when the card is presented, bad guys will fall back in even greater numbers to the card-not-present model to find their victims.

Online retailers and service providers must take additional steps to secure their systems and protect customers and business partners, and face the challenge with the understanding that effort must be ongoing as new threats emerge. Tokenization is a prime method of layering the system with security, making the merchant system somewhat less of a worthy target by not storing the card data in the system.  Even if the system becomes compromised, the bad guys wouldn’t find customer payment card information.  There are numerous other steps a business can take to secure the CNP sales, including applying behavioral analytics which might identify rogue activities, or using 3D Secure to authenticate a cardholder’s identity at the time of purchase.   The point is that CNP fraud is likely to spike as EMV technology takes a firm hold in the US.

Card fraud is already escalating rapidly for ecommerce retailers and other card not present channels – it didn’t take EMV to start on that roll but it will surely give it a push.  Paperless payment systems, SaaS subscription services and online application service usage are increasing dramatically and there’s no chip to get in the way of these transactions.  Sellers of any and every service utilizing online payments need to now pay particular attention to system and information security.  The risk has always been there, and EMV chips and other shifts in pay card technology simply give it a push.

jmbunnyfeetMake Sense?

J

 

[1] Chipping away at Credit Card Fraud with EMV; Information Week Tech Digest powered by Dark Reading, Nov 2015; NilsonReport http://www.nilsonreport.com/publication_newsletter_archive_issue.php?issue=1071

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EMV and Retail – Your Trusted Advisor Should Be Advising You about This

EMV and Retail – Your Trusted Advisor Should Be Advising You about This

EMVChipCardThere is ‘big change a comin’ for retailers, merchants and any business that accepts credit cards for payments, and there are a great many businesses that are completely unprepared for it.  The change, what is being referred to as the “Payment Networks’ Liability Shift”, goes in to effect in October 2015 and places the burden of liability for fraud squarely on the shoulders of the merchants and card issuers who are not compliant with certain payment system security standards.  Accounting professionals and Trusted Advisors – here’s one of those things you should be helping your clients with.  Help them get informed, trained, and prepared.  Help them to understand the risk and decide on a course of action.  This is part of what makes a trusted advisor: they got your back.

The way things generally work in the US today, a fraudulent charge on a credit card is likely to end up being covered by the credit card company (the issuer). Starting in October, retailers are supposed to be able to accept payment cards with EMV chips (named for the founders of the standard: Europay, MasterCard and Visa), and must process those cards using the compliant technology that takes advantage of what the chip processing and security offers.  If these conditions aren’t met – like having a POS or payment terminal not capable of reading the EMV chip – the merchant is on the hook for the fraudulent transaction.  Given the volume of credit card and payments fraud in the country you’d think that most merchants would already be ready for this, but replacing all the POS and terminal equipment could be pretty costly.  It may take a bit of analysis to understand the real risk and compare that to the cost of compliance.  Certainly it makes sense to always be in compliance, but there are always factors which influence how quickly (or how completely) compliance may be met.

The liability shift is part of the influence being leveraged to get businesses to adopt newer and more secure models of electronic payment acceptance and processing.  It is simply the case that the magnetic strip on a credit card isn’t good enough any longer.  The new EMV Chip reading payment terminals require that the card be inserted and processed by the terminal rather than simply swiping the magstrip across a reader.  Over 40 years of using the magstrip approach has helped to earn the United States a top spot on the leaderboard for credit card and financial fraud, and we seem to be lagging behind in adoption and implementation of the EMV technology even though it has been shown to seriously curtail fraud even as payment card usage increases.  The EMV chip process, which encrypts information about the card so that even the local POS system doesn’t get access to it, is far more secure and is being widely adopted and used in Europe, Canada, Latin America and the Asia/Pacific regions.  Now the clock is ticking for US businesses to get ready to either update their systems or accept the liability for not doing so.

The shift in how payment cards are made and processed is simply one of many changes which will continue to occur as technology and human ingenuity continue to be applied in both good and not-so-good ways.  Recognizing that the pace of change is increasing, businesses must find ways to remain informed and prepare for those changes which will impact the business operation and sustainability.  This is among the essential roles the trusted advisor plays, and the current imperative simply underscores the growing need for such advisors by business large and small.

jmbunnyfeetMake Sense?

J

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Accounting for Point of Sale

Accounting for Point of Sale

There are a lot of solutions available to help retail businesses get business done.  From touch screen technology to mobile credit card and payment processing, retailers have many choices when it comes to selecting the right technology for the establishment.  But even the best point of sale system can lack the critical element that makes it truly valuable for the business.  This critical element is integration to a trusted accounting and finance solution.  While the POS system may include a level of basic accounting functionality, the reality is that a dedicated financial application will perform better in the long run.

Just as specialized line of business applications are used to handle operational functions, the financial application should be considered to be the “line of business” solution for the accounting and finance department (even if it is a department of one). This system not only services essential processes like receivables management, bill payments and bank account reconciliation, it serves as the basis for payroll, financial, tax, performance and other reporting. Further, the financial systems are often the first and primary source of analytical data, illuminating KPIs and cash flows and ultimately the business value.

The point of sale application generally handles the selling of and payment processing for goods and services sold by the business.  Whether it is composed of registers and terminals connected to a host system, PCs running POS software, or mobile phones and tablets running mobile payment processing apps like Square or GoPayment, point of sale addresses the retailers need to capture and record sales and payment information, sometimes customer information, and often inventory information.

The data from the POS solution must make it to accounting in some manner, yet point of sale applications are too-often approached as a standalone business requirement, somehow disconnected from other aspects of the business including the back-office.  Sales and items may be recorded in the POS system, yet only summary sales data ends up being re-keyed into the accounting system.  Centralized inventory management is all but nonexistent in these cases, and gross sales total are often recorded rather than individual transactions and receipts being transmitted to the accounting system.  The process of re-keying information from the POS to accounting systems is not only an efficiency-killer, it is also introduces a great potential for errors.  When the business elects to conserve on data entry and post only summary information to the accounting system, valuable detailed sales and transaction data may be lost.

The right approach to bringing point of sale together with accounting is to automate the process of integrating POS data with accounting on a regular basis – with AUTOMATION being the key.  Rather than establishing a process that requires manual entry of information from either system, a data integration solution is the best approach, with an import/export solution running second. The point is the elimination of manual re-entry of information.

There are numerous tools available that can take formatted POS data and import it into products like QuickBooks, for example, where it can be properly accounted for.  While QuickBooks Point of Sale integrates with QuickBooks desktop products, other POS solutions can also connect with QuickBooks if the right integration tool is selected, and there are quite a few available.  Check with the POS vendor and ask about a direct integration with QuickBooks desktop or whatever financial system you use. If there isn’t a packaged integration solution available, then check out products like Transaction Pro Importer, which can automate a variety of data import processes and ease the burdens moving external data into QuickBooks.pointofsale

The other factor in getting point of sale data to accounting is actually getting it there… transporting the data from the POS location to where the accounting system lives.  In many situations it is not desirable to keep the accounting system on the same computers as the point of sale systems, and in some cases it isn’t even possible.  But there is generally a way to get the information in a form that makes it possible to transmit it in some manner.  Among the most popular approaches to solving the “getting the POS data from here to there” problem is to use a data sync solution like Dropbox.

If the point of sale data can be exported or output to a file on a PC hard drive, then it may be able to be stored in a Dropbox folder on that PC.  At the home office where the accounting system resides, the operator would access the sync’d files from the local PC Dropbox folder and import the data to QuickBooks.   For QuickBooks Point of Sale there is an option to create a “mailbag” of sorts from the POS data of a remote store, which QuickBooks POS at the home office would pick up from the Dropbox folder and push to the QuickBooks financial application.

For businesses using POS systems like Micros or POSitouch and others, there is likely a service or application that will produce the POS data for import to QuickBooks or other financial system, pulling POS data files placed in the Dropbox folders by the POS app or performing the function as a web service or SaaS integration.

While I am a big fan of application hosting services and running QuickBooks desktop editions in the cloud, I’m also a realist and recognize that many POS solutions either can’t or shouldn’t be hosted.  There are situations where a hosted point-of-sale makes a lot of sense, and then there are cases where no bandwidth or proprietary hardware-based solutions make hosting not even an option. That doesn’t mean that the financial systems shouldn’t be hosted, though, and there are numerous ways to get the sync’d POS exports to the hosted QuickBooks environment, for example.

The key for retailers is to make sure there is a solid process for getting detailed and accurate POS information into the accounting system on a regular basis.  Manual entry is never the best answer.  With all of the technology and tools available, manually re-entering sales information is a waste of time and is likely to produce errors.  The better answer is to use an approach that automates the regular collection of point-of-sale data from all sources, delivering the data in a regular and consistent manner to accounting, and providing the basis for end-to-end automation supporting the integration of the point of sale system data with the rest of the business accounting.

jmbunnyfeetMake Sense?

J