Integrating your ERP with POS

If your business has any retail transactions, you have some type of POS, or point of sale, system. You might use an old-fashioned cash register with a money drawer. You might have a shoebox under the counter where you put money after a transaction is completed.

Many businesses have adopted newer systems that can include a barcode scanner and handle a wider mix of digital and physical payments* while connecting to the card provider. These newer systems usually can record cash payments too, and POS systems can also track inventory, capture customer data, and generate sales reports.

That is where ERP and POS integration comes in: linking that checkout system with your back-end enterprise resource planning software so sales, stock, and customer data stay in sync.

What a POS system can do

A POS system processes each transaction by scanning items and handling the payment (cash, card or mobile).  When a sale is made, the POS logs the transaction details:

1. what was sold and
2. for how much.

The software then tracks total sales and can tally how many of each product were sold in a day or month.

What a POS system cannot do

Your POS system tells you how much you sold. It does not report on other important factors needed to profitably manage your business.

You sold an item for $10, but how much did you pay for that item? The difference is your margin on that item, but you still don’t have your profit. You also need to subtract rent and utility costs, payroll, and other expenses before arriving at your bottom line.

POS can tell how many of that item you sold but (typically) cannot let you know how many are still in your stockroom or how many are on the way to your store from open purchase orders.

Where ERP can help

ERP, or enterprise resource planning, solutions are systems that combine accounting, financial management, inventory, purchasing, customer management, quality systems, and many other component modules that are available depending on your specific business. ERP goes beyond how many were sold to add future incoming amounts and previous receipts of that item so you know how many should be available.

You can perform a stock count and, if there is any difference, you can record any shrinkage for that item. ERP tracks your sales amounts over time and calculates your liability for sales or value-added taxes, enabling you to save cash aside for payments you know are upcoming.

ERP also records when your bills are due so you can plan outgoing payments over time in the future to help manage cash. ERP includes a customer relationship management tool so you can know actual patterns of sales to specific customers and plan for the future.

CRM tracks how promotions affect sales overall and to specific customers, which will help manage future promotions. CRM alerts you when a customer has not made any recent purchases so you can find out why and make changes to keep that customer’s business.

ERP and POS integration

ERP and POS are separate systems by design, but they can be integrated to reduce manual processes. Rather than manually entering POS sales into the ERP or importing a spreadsheet, ERP systems support POS integration via APIs or middleware that automatically syncs data in real time.

Recommended next read: A beginner's guide to ERP integration

Once integrated:

• Each sale recorded in the POS is immediately sent to the ERP, updating inventory levels and financial records in real time.
• Updates made in the ERP (like new prices, product additions or stock receipts) flow to the POS so store registers always have current data.
• Customer profiles and loyalty information collected in the POS feed into the ERP’s CRM.

As a result, repetitive data entry is eliminated, stock counts stay accurate, and reports combine front and back-office data. While the setup requires planning, ERP-POS integration itself is now a standard practice that helps multi-location and omnichannel businesses run efficiently.

ERPs with built-in POS functionality

That said, not every business needs to connect two separate systems. Several ERP systems include POS functionality natively, which removes the need for external connectors or middleware and keeps sales, inventory, pricing, and customer data in a single database that updates in real time.

Examples include:

• Oracle NetSuite
• Acumatica
• Odoo