How to Calculate Profits and Transactions in POS Business

Are you planning to venture into the POS business, or have you already started and are now looking to calculate profits and track transactions? The key is to maintain a recording workbook or create an Excel spreadsheet on your computer to record and track your daily transactions and profits.

This is the strategy that helped my POS business flourish. With this approach, I was able to calculate not only my profits but also keep track of my transactions, airtime/data sales, withdrawals, and commissions. I managed to grow my enterprise from ₦70,000 a month to over ₦200,000 a month using this method.

I also opened and established other market opportunities in that same period.

Many business owners use POS systems for various purposes, but only a few people know how to accurately calculate their transactions and profits at the end of the day. Due to this lack of knowledge, numerous POS businesses have crumbled, and some are on the brink of collapse. However, this issue will become a thing of the past once you finish reading this content.

What is a POS business

The use of point of sale (POS) has become widespread. Many people are utilizing it to simplify their businesses, while others have seized the opportunity to become successful entrepreneurs by starting their own businesses. POS refers to the point of sale, a system that enables consumers to withdraw or transfer money from their banks through a POS machine in exchange for a commission.

In the past, people only used the POS machine to make payments for their purchases in the market. However, things have changed now. You can now earn money by providing cash to consumers using the POS machine. This business model is also known as the mobile money agent system.

This type of business is simple and straightforward. You will receive a commission from every customer for whom you facilitate a cash withdrawal. The commission amount varies based on the withdrawal amount. For example, if you make ₦20,000 available for a customer, you should add ₦400 as your commission when withdrawing the money from the customer’s account. For ₦40,000, your commission will be ₦800.

How to calculate transactions in POS business

Your transaction record is a crucial aspect of your business. You can know your profit and loss by just calculating your transactions alone. So here is how you can calculate your transactions in POS business:

1. Get a recording workbook

Getting a recording workbook is the first thing you should do. The recording book let’s you record all the business activities made daily. With a recording book, you can record and calculate all your transactions, commissions, airtime/data, profits and more.

Moreover, you can get a computer if you’re tech-savvy, and it for all the recordings and calculations. All you have to do is to click on the Microsoft Excel, or you use a good workbook software for the job!

2. Draw a straight 5 line parallel table

After getting the book for the recording and calculations, begin by drawing a parallel line, and sometimes, verticals also. The parallel lines should be either 5 or 6 in numbers. After drawing the lines, they will look like a table line, with each lines having a column and row block where you can input words and numbers.

3. Put “deposit” on the first line

At the top of your table, your first heading should be placed as “Deposit“. This is where all the money deposited into your account or paid to you in cash by your customers will be placed. The deposits are part of POS transactions, only that you won’t see it in cash.

4. Put withdrawals on the second line

In other to know the total amount you withdrawn, you have to make a space or line for it. On the second line, input withdrawals to make your transactions apparent. This is where all the money you withdraw that day will be recorded and calculated.

Some people don’t like to withdraw all their money at once. Because of that, they withdraw bit by bit which could be confusing by the end of the day. So if you are that type of person, then you should always record those withdrawals like I have instructed.

5. Put Data/Airtime on the third line

You should also include a Data/Airtime line after withdrawals as well as bill payments like; electricity bills and cable payments. That is where you should record all that to avoid issues at the end of the day. But if you will be confused, then you better separate the airtime/data from bill payments.

6. Add Commission

Your commission is the interest you make from the POS transactions. The commissions are actually what you really earned for the day. So it is vital you keep records of all the interest you gained during the transactions. Because of that, you have to add “commissions” to the record book.

7. Add “Remarks” also

On this situation, adding remark is not necessary, but you still add it just to avoid confusion. This remarks will help you know where and how the commissions were given.

For example, if the commission was paid to you in cash, under the remark line, you can write; “Commission paid in cash”, or you simply use the phrase, “paid in cash”.

But in the case when customers ask you to add the charges (your commission) to the amount they are withdrawing, under the remark you can write; “commission paid into account” or “paid into account” depending on the table size.

8. Sum up the transactions for the day

At the end of the day, calculate all the transactions you made by adding their amounts and placing them under the heading transactions. For example, add all the amount under data/airtime and place the total at the buttom of the heading. Remember to continue the following with other transactions too.

To balance your transactions and determine if you are on track with your business, you need to add your deposits (the money your customers have paid to you) to your total balance (the amount of money remaining in your account). If it aligns with your actual start-up capital (the amount of money you started with), then you are on track.

How to calculate profit in POS business

At the end of the day, you have to calculate your profit in the POS business to know if you’re right on track or you made a loss. Below are the process of calculating your POS profit with any mistakes:

1. Open a closing report

To determine your profit, you have to open a closing report at the end of that day’s table. The closing report will help you find out whether you made profit or not. This process can be done below the table, but you can still tear out a sheet of paper for the calculations if you want.

POS closing report

2. Write out the total amount you started with

This will help you stay in touch with all your transactions. To make the calculation easy, write out the total amount you started the day with on the closing report.

3. Write out the POS machine balance

You should also write out the total amount balance available on your POS machine and place aside.

4. Add the total deposits, POS machine balance and total commissions together

After writing the POS balance aside, the next thing you should do is to add the total deposit for the day (the money that was deposited into your account and the cash you received), pos machine balance and your commissions together.

Remember to write out the total amount aside on the closing report.

5. Compare the total with the amount you started with to know your profit

Now, compare the total amount you got with the total amount you began with. If the total amount you got is more higher than the amount you started with, then you made a profit. But if it is less or the same, then you loss.

Final thoughts

If you are the type that do not calculate your profits and transactions before closing the day, you may fail in the business. Small business like corn roasting is not that difficult for beginners, you can try it out.

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