Stock counts, variants and barcodes
POS inventory software that keeps count while you sell
POS inventory software tracks how many of each item you have and takes one off the count every time you ring it up. On some free POS plans the basics are included: stock counts, low-stock alerts, variants and barcode scanning. Purchase orders, vendor lists, counting tools and cost reports usually come with a paid plan.
If you sell things off a shelf, a POS with inventory saves you the spreadsheet. Here's what each piece does, what you get for free, and when it's worth paying for more.
By Jason at POSUSALast updated
The loop
How does a POS with inventory actually work?
It ties your item list to your checkout. Every sale updates the count, so the number on the screen matches the shelf, as long as you count what comes in the back door too.
- Add your itemsType them in, import a spreadsheet or scan the barcodes
- Set the countsHow many of each you have right now
- SellEach sale takes one off, in store and online
- Get the alertSomething drops under the level you picked
- ReorderFrom your vendor, by phone or purchase order
- Receive itAdd the delivery back into stock
Skip the last step and the whole thing drifts. Most "my counts are wrong" problems are deliveries that never got entered, or items rung up as a custom amount instead of the real item.
The pieces
What should POS inventory software handle?
Six jobs. The first four are where most small shops live. The last two are where a growing shop starts to feel the gap between free and paid.
Stock counts
A number on every item that goes down with each sale and up when you add stock. Good systems also count online orders from the same pool, so you don't sell the last one twice.
Often free
Low-stock alerts
Pick a level for each item and get told when it dips under. That's the difference between reordering on time and finding an empty hook on Saturday.
Often free
Variants
Sizes, colors and styles under one item, each with its own price, SKU and count. Without them, one shirt in five sizes turns into five separate items.
Often free
Barcodes
Scan to ring up, scan to find an item, and on some systems scan a product to create it. Printing your own labels is a separate feature and often a paid one.
Scanning often free
Purchase orders and vendors
A vendor list, purchase orders you send from the POS, and receiving against them so stock and costs update together. This is where a spreadsheet stops being enough.
Usually paid
Counts, costs and reports
A counting tool for full and cycle counts, an adjustment history, unit costs and reports like cost of goods sold. You need these to know what you actually make on each item.
Usually paid
Comparing free plans? Our best free POS systems roundup notes how much inventory each one includes, and free POS features covers the rest of the software.
On Square
Square Free vs Square Plus: what each does for inventory
Square is the POS we set most people up on, and we're an authorized Square reseller. Square includes retail inventory features in every plan, and the paid plans add the back-room tools. Here's the split, from Square's own pricing and help pages.
Square Free
No monthly software fee
- Stock tracking. Turn on stock tracking for any item and enter a count. Sales in Square Point of Sale, invoices and shipped online orders take stock off automatically.
- Low-stock alerts. Set an alert level per item in Square Dashboard. Square emails a list of low items after each location closes for the day.
- Variations. Sizes, colors and other options under one item, each with its own price, SKU and stock count.
- Barcodes. Scan or search a product barcode to create the item and its SKU, and scan to ring up at checkout.
- Bulk import. Load your catalog and stock counts from a spreadsheet instead of one item at a time.
Square Plus
Paid plan, with a free trial. Older help articles call it Square for Retail Plus.
- Counting tool. Run full counts and cycle counts right in Square, so you're not counting on paper.
- Stock intake. Add deliveries to stock in bulk, and keep an inventory history of every change.
- Vendors and purchase orders. Keep a vendor list, send purchase orders and receive against them.
- Unit costs and labels. Track what each item costs you and print your own barcode labels.
- Stock conversion. Buy by the case, sell by the unit, and let the counts convert.
- Cost reports. Cost of goods sold, aging inventory, sell-through and projected profit.
Square Premium goes further for multi-location shops: transfer orders between locations, importing purchase orders, printing labels from a purchase order and a vendor sales report.
Square changes plan features now and then, so check Square's retail pricing page before you pick a plan. Plan prices are on our pricing page.
When free stops being enough
When should you upgrade your POS inventory tools?
When the back room takes more of your time than the sales floor. Basic counts and alerts carry a small shop a long way. Paid inventory tools pay off once you're ordering from vendors every week and need to know your costs, not just your counts.
Honestly, plenty of shops never need to. A boutique with a few hundred items and two vendors can run on free counts and alerts for years. A liquor store or a corner market with hundreds of SKUs and weekly deliveries usually can't.
- Deliveries every weekYou're writing purchase orders by hand or in email
- Counts keep driftingYou need a proper counting tool and an adjustment history
- You don't know your marginsUnit costs and cost of goods reports fix that
- You buy by the caseAnd sell by the unit, so stock needs converting
- A second locationMoving stock between stores needs transfers
Who leans on it most
Which businesses need a POS with inventory?
Anyone selling physical products, but some get a lot more out of it than others.
Retail shops
Sizes and colors, barcodes on the tags, and an online store pulling from the same count.
Retail POSLiquor stores
Cases and bottles, distributor orders, and hundreds of SKUs that move every week.
Liquor store POSConvenience stores
Fast scanning, lots of small items and restocking from several vendors.
Convenience store POSCafes with retail
Bags of beans, mugs and merch on the shelf next to the drinks.
Cafe POSNeed a scanner or label printer? The POS hardware guide covers what's worth buying.
Questions
POS inventory questions
What is POS inventory software?
It's the part of a point of sale system that keeps count of what you have. Each item carries a stock number that drops when you sell one and rises when you add stock, so you can see what's running low without walking the shelves. Fuller versions add purchase orders, vendor lists, counting tools and cost reports.
Is there a free POS with inventory?
Yes. Several free POS plans include basic stock tracking and low-stock alerts at no monthly fee. Purchase orders, counting tools and cost reports usually need a paid plan. Our best free POS systems roundup notes how much inventory each free plan includes.
Can a POS track sizes and colors separately?
Most can, using variants. One item, like a T-shirt, holds each size and color as its own variant with its own SKU, price and stock count. Check that a free plan lets you track stock on each variant, not just on the item as a whole.
Do I need a barcode scanner for POS inventory?
Not to start. You can tap items on the screen and type in counts. A scanner pays off once you carry a lot of SKUs, because it speeds up checkout, receiving and counting and cuts down on wrong-item mistakes. Our POS hardware guide covers what to buy.
How often should I count my inventory?
A full count at least once a year, and short cycle counts of your fastest movers in between, like one aisle or one vendor each week. Counting a little at a time catches drift before it turns into a big surprise.
Does Square Free include inventory?
Yes, the basics. You can track stock on each item and variation, set low-stock alerts, scan barcodes to add items and import your catalog from a spreadsheet, all with no monthly fee. Counting tools, vendors and purchase orders come with Square Plus.
What's the difference between Square Free and Square Plus for inventory?
Square Free counts stock and tells you when it's low. Square Plus adds the back room: a counting tool for full and cycle counts, inventory history, unit costs, vendors and purchase orders, barcode label printing, stock conversion and cost reports. Plan prices are on our pricing page.
More answers on the FAQ page and in our free POS guides, or call (888) 243-3831.
Start counting stock without a monthly bill
Square Free has no monthly software fee and no long-term contract. You pay a processing fee when a customer pays by card, and nothing on cash. Current numbers are on our pricing page.
No monthly fee on the free plan. No long-term contract. Cancel anytime. See current pricing.
Free POS System is operated by POSUSA, an authorized Square reseller. POSUSA may earn compensation when you sign up through our link. It doesn't cost you a cent more. Read our disclosure.