What is a point of sale system?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
Point of sale is the moment and place where a customer pays, and a point of sale (POS) system is the software and hardware that handles the sale there. It records what was sold, the price, how the customer paid and any refund, and its reports become the source for the sales entries in the books.
A POS system holds the detail of every transaction, but the books usually need a summary. At the end of each day or trading period, its sales report gives total sales and refunds, split by payment type and, where the chart of accounts needs it, by category. That summary becomes the period's sales entry, whether it is keyed in or sent across by the system. Each payment type is then followed to the bank: card sales to the provider's settlements and cash to the till count and the banking, so every part of the takings can be checked against money received.
The reports themselves are records. End-of-day summaries, refund and void reports and, where the system keeps one, the log of who processed each transaction are the evidence behind each sales entry, and they are what you go back to when recorded sales and money received don't line up.
In Australia
business.gov.au describes POS systems as computer systems that help a business process its sales and can support its record keeping. It says that, depending on the system chosen, a POS can automatically update sales income and stock records, produce receipts and invoices, and process EFTPOS, credit card and debit card sales, and it suggests thinking about the features the business needs before buying one.
Worked example
| Line on the POS report | Amount (AUD) | Where it goes |
|---|---|---|
| Sales | 3,460.00 | Recorded as sales |
| Refunds | 120.00 | Recorded as refunds against sales |
| Net takings | 3,340.00 | Total to be accounted for by payment type |
| Paid by card | 2,615.00 | Matched to the card provider's settlement |
| Paid in cash | 725.00 | Matched to the till count and the cash banked |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Entering the POS sales total without splitting it by payment type, so card and cash takings can't be checked separately.
- Processing refunds or voids without recording a reason, so a shortfall in takings has no explanation.
- Trusting the POS stock figures without regular stocktakes to check them.
- Losing old POS reports when changing systems, leaving nothing behind earlier sales entries.
Related terms
Related service
Small business bookkeeping
Your books kept current, every month.
Sources
- Record keeping
business.gov.au, Australian Government. Current at 15 October 2026, released 7 November 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.