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.
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.
Make Sense?
J
Using a QuickBooks desktop product is pretty simple – you install it and then you run it. For many users, it’s just that easy and uncomplicated because they don’t need 3rd party integrated software, they don’t sync their files to other computers or services or try to share their QuickBooks data, and they remember to exit QuickBooks and back their files up each and every time they use them. On the other hand, many QuickBooks users experience quite a lot of frustration with the product – frustration which may often be the result of a poor practice when using the software. QuickBooks has been engineered over many years to be as simple to use as possible, but at the same time has grown to be a product with lots of features, add-ons and extensions. Users have also found ways to make QuickBooks do things it wasn’t really designed to do, this truth being one of the good things and the bad things about the product. When it works, it works great. When it doesn’t work, it’s beyond frustrating. It is a shame that a lot of the problems users have with solution may be rooted in the habits and behaviors of the QuickBooks users themselves.
There is a trend among software makers these days to more fully leverage the “power of the web”, and why wouldn’t they? The Internet has become the way businesses and users get and stay connected, and has become a foundation for how business gets done. Remote and mobile access to information and applications has become an expectation of users, as social computing models have encouraged them to remain connected on all of their devices and from any location. Online describes a working model that many businesses strive for, and software makers are seeking to capitalize on the trend.
Having your data available from anywhere is awesome. Storing files in the cloud and being able to sync them with files on the computer is a great way to make sure the files are centrally available regardless of which machine you use to access them with. Dropbox is among those favored solutions which provide users with the cloud drive storage and an ability to seamlessly sync those files to various computers. It’s pretty cool, but let’s face it: not every type of file loves living in a Dropbox or sync folder. Particularly for folks who want to be able to store and sync their QuickBooks and other business files to the cloud, there are a few things to be aware of when using these nifty sync solutions.
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