by Manuel A. Alcuaz, Jr.
My company sells POS (Point of Sale) systems, As a profit-oriented businessman, I should welcome additional opportunities to sell more POS systems or more features.
But as a management and IT consultant, I should make sure that customers do not waste money on impractical and expensive non-solutions.
For those not familiar with POS systems, let me give a brief description. A POS system is a computer-based solution to easily record sales, compute amount due, bill, record payment, compute change, and issue an official receipt. Some POS systems also have inventory and sales reporting functionality.
I will now discuss three situations where a POS system, some special functionality, or a particular technology, is wasteful.
Don’t Need a POS System
Most POS vendors like to think that any restaurant or retailer with a lot of business should have a
POS system. Margie’s Eat All You Can Resto is a very successful restaurant; customers fill her 30 tables morning, noon, and night.
Does she need a POS? No?
(Unless, she is in a mall and the mall insists that she must have a POS hooked up to the mall’s revenue monitoring system.)
Unlike in an a la carte restaurant where a table for four could have a dozen different items to be billed, at Margie’s the bill for a table for four would contain one line (4 buffets x P250!).
Margie can easily do billing and invoicing manually. No need for a POS!
What Margie needs more is a good F&B management system to compute the cost of food for each buffet session, day, week, etc., and to determine how much was consumed.
While supermarkets definitely need many POS systems, a large furniture store, even with millions of pesos of sales in a week, does not really need a POS.
Instead of a POS, we would recommend a low-cost accounting system like QuickBooks, Peachtree, or MYOB. These accounting suites have invoicing functionality. This could be a little slower than a POS, but who needs a POS when you sell five pieces of furniture in a day.
Expiry Date
When we propose our POS systems to small drug stores, we are often asked if our POS systems can track expiry dates for drugs and medications.

It is possible to provide expiry date functionality, but we have not done so because in a typical drugstore, expiry date functionality on the POS would be dysfunctional.
The software would be more complicated. But if you had it, you will just be fooled by your pharmacist and your POS!
It is more complicated because to track expiry date on the POS, you would have to track inventory not only for your thousands of drugstore items, you would also have to track inventory for each delivery and lot.
If the delivered item has only one expiry date, then tracking by delivery would be good enough. But if a delivery of the item had two or more expiry dates, then you would have to track inventory by lot. If your little drug store has thousands of items, you would have tens of thousands of delivery or lot records.
The POS program would then have to track sales and inventory by item and by delivery or lot.
Let’s assume that your POS is sophisticated and has the software to track inventory by expiry date.
Will you be able to manage your inventory expiry dates? No!
Observe a typical transaction. I am buying Myra 400 E. The pharmacist picks a bottle with a 2012 expiry date. The computer shows that there is stock with November 2011 and March 2012 expiry dates. She has been instructed to sell the earlier expiry date first.
What will she do? Go back to the shelf and get a bottle with the earlier expiry date and sell it to me?
Or sell me the bottle with the 2012 expiry date and enter in the computer a sale of the earlier expiry date?
If she is lazy, the computer will not catch her.
My advice to the drugstore is forget tracking expiry dates on the POS. When you get new stock, make sure you put stock with later expiry dates at the back of stock with earlier expiry dates in front.
Your pharmacists will then be able to pick and sell the stock with earlier expiry date first.
I am not saying that the drug manufacturers should not track their inventory by expiry date. The manufacturer should.
PLDT CheckOut
Let me now discuss PLDT’s CheckOut, a web-based POS, sales, and inventory application that
PLDT offers for rent.
PLDT CheckOut is an innovative product designed by PLDT for a number of purposes:
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to make money for PLDT to provide retailers with POS functionality combined with on-line sales and inventory to make it more affordable for the retailers by offering it for rent to lessen competition.
PLDT CheckOut could be great for PLDT but is it good for its customers, the retailers, restaurants, cafes, and bars?

PLDT’s CheckOut is an example of what is called SaaS or Software as a Service. It differs from conventional software which runs on the client’s workstation or server. SaaS software runs on the service provider’s servers. Your store PC just runs a browser.
One of the advantages of SaaS is that the client could potentially pay for the software based on his usage. However, with CheckOut, PLDT has opted to have a fixed monthly charge of P3,080 per store per month.
Is CheckOut a good application? For PLDT, it could be because PLDT stands to collect P3,080 monthly from thousands of stores for many years !
Is Running a POS on the Web a Bright Idea?
Let us look at what a POS basically does.
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The cashier enters items sold.
The POS software gets the item prices from the database and computes the amount by multiplying the item price by the quantity.
The POS totals the amount due, including possible taxes and service fees and displays the amount due.
The cashier gets the payment and enters the amount received. If credit card, the cashier swipes the card on the credit terminal and re-enters the amount.
The POS computes change if cash, and prints a receipt with transaction details.
All of the above will work very fast and efficiently on an inexpensive PC-based system in your store.
With PLDT CheckOut, the same thing takes place but the sales data has to be sent to the PLDT server for it to compute the amounts per item and the total due.
The PLDT server then sends these to the POS machine for it to display the amount due.
When payment is received, this is again sent to the PLDT server for it to compute the change and send back data for printing of the receipt.
Reliability
PLDT claims that CheckOut is highly reliable.
I have my worries. I have a Globe landline with broadband internet in our office and, at least a few times a week, we lose internet connection. I recently got a Sun Pocket Wifi with unlimited broadband usage.
I had to return it, not because it would not work once in a while. I returned it because it would only work once in a while!
The Sun technician they sent tried to get broadband access in my office and condo in Pioneer
Highlands. He could not get a broadband connection with the Pocket Wifi and even with the more powerful router that he brought!
Maybe PLDT is much better than its primary competitors but I would not bet my POS operations on it.
Do you need real time communications for sales analysis and inventory?
If you only have one store, you probably don’t.

If you have a chain of stores or restaurants, you will need a system that can consolidate sales and inventory information.
You may need a fairly powerful PC server with the ability to communicate with your stores or restaurants. With PLDT CheckOut, you don’t need your own PC server.
But even with many stores, you do not need real-time analytics! You do not need to send your sales across the internet as they happen. Usually, it is good enough to get a sales report at the end of the day and be able to consolidate daily sales reports by week, month, etc.
Communications between your head office and your outlets could be done by text, e-mail, or file uploads, and downloads.
Do some pencil pushing and you may find stand-alone PC POS connected to your head office server less expensive than PLDT’s CheckOut.
(The article reflects the personal opinion of the author and does not reflect the official stand of the
Management Association of the Philippines. The author is President of Systems Sciences Consult, Inc. and member of the MAP National Issues Committee. Feedback at map@globelines.com.ph. For previous articles, please visit <map.org.ph>.)
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