How can Blockchain improve the Point of Sale Process?
In today’s competitive era, it has become crucial for everyone to embed the Point-of-Sale (POS) solution in the businesses. It allows businesses to improve the payment services, inventory process, and customer services.
But the traditional POS process is complex. Due to the involvement of multiple entities, it complicates taxation, supply chain and billing. Let’s understand why the current POS process is complicated by considering an example of a restaurant.
Nowadays, every restaurant installs a Point-of-Sale software to run the business operations efficiently. But do you know how POS solution works?
The current POS system includes the following components:
- A computer system or tablet to place/enter the order
- Swiping device for credit/debit cards
- Bar-code reader to scan products.
- Software to maintain sales and data storage.
How POS Billing Solution works presently?
The current Point of Sale System has to maintain three different databases such as product, purchase and inventory database.
When a customer places the food order, the product database sends the price information of a product on the screen of a computer or tablet. When the customer pays the bill, the status of purchase with the payment mode is updated in the purchase database.
The information about the placed order is also updated in the inventory database to track the availability of items in a timely way.
But Point-Of-Sale is not only limited to storing information related to trading of items. The entire POS process involves various parties like regulators, government entities and central authorities, adding high costs to the system.
For example, if someone runs a restaurant, they need to ensure and report a food regulator that the food they offer is safe and correctly packaged.
Presently, a business owner interacts with a regulator over an email or any other source and saves information either in the excel sheets or a centralized database.
Also, a business owner needs to file taxes on a timely basis. If the government changes the taxation policies, a business owner has to apply for the new regulations to be added to the POS system. So, the entire process can be quite time-consuming.
Connecting POS to the decentralized network, i.e., blockchain could eliminate the need for middlemen and bring more trust to the system with the smart contracts.
From inventory management to calculation of sales and taxes and using customer’s data to automate the payments, blockchain can simplify POS securely and efficiently.
A blockchain-based point-of-sales solution could bring more reliability and traceability to the businesses. Read further to know how.
Stakeholders involved in Blockchain Point of Sales Billing Solution
- Business owner (Seller)- A person who requires POS solution for the business.
- Customer- A person who has to buy products or services and pay bills through POS solution.
- Authorities- For adding government regulations to calculate taxes based on different types of bills.
Here’s how Blockchain Point of Sales Solution could bring transformation
Storing Data on Blockchain
Information related to billings, taxes, customer’s ratings, orders placed per day, and inventory can be stored and distributed across the blocks in the chain.
Smart contracts trigger to process incoming data and ensure taxes, regulations, and compliance are maintained before a transaction occurs.
Blockchain can enable all parties like raw material provider, sellers, buyers, regulators, and other authorities to access immutable data stored on the distributed ledger transparently.
Every participant of the network can access the information saved on the blockchain and have control over the data.
For example, if a restaurant owner has to buy veggies to cook the food, blockchain helps to ensure if vegetables have been sourced from the approved vendor or not. Blockchain also brings transparency by allowing customers to access the past invoices anytime they want.
Payment through crypto wallets
The payment can be deducted automatically through the crypto wallets of the customer when they place an order and transferred to the wallet of the business owner. The transactions details are saved on the blockchain which can be later used for taxation or audit purposes.
Since an auditor/legal authority involved in the blockchain point of sales ecosystem can directly access time-stamped records related to taxation and payment, it can be possible to conduct annual or quarter audits quickly with the smart contracts.
Now, let’s understand what benefits could blockchain point of sales offer to the different stakeholders in the system.
Benefits to the Sellers
- Since regulations can be added to the smart contracts, blockchain can cut down the cost by eliminating the need for intermediaries like accountants, advisers, or auditors.
- Blockchain would enable headquarters to run tax audits on a monthly, quarterly, or yearly basis quickly without any complications. So, tax filing could be done promptly.
- Companies can manage the inventory efficiently as they can quickly access the information about the items frequently purchased from the blockchain.
Benefits to the Customers
- A customer can keep a tab on the monthly expenses by tracing back the available information anytime.
- Blockchain can enable buyers to pay the bills automatically via crypto wallets.
- Because everything is stored on the blockchain verifiably and transparently, customers can even track the information about the origin of raw materials.
Smart Contracts- reducing complexities
- Government authorities can build regulations in the smart contracts to ensure that taxes are applied accurately.
- Smart contracts would also ensure raw material providers meet the required quality standards.
- Smart contracts embedded with crypto wallets allow buyers to enable auto-payments.
- As soon as a customer pays the bill, the smart contracts update the status of billing as “paid” to the ledger.
- Smart Contracts can automatically generate information about annual sales.
Integrating POS with Blockchain can reduce a wide range of complexities around taxation, billing, and supply chain. To get an in-depth understanding of how blockchain works in Point-of-Sale solution, talk to our team of blockchain development experts.
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