To understand how a POS system works, it’s probably more equitable to compare it to a personal computer than a cash register. With a computer, you install the type of software (or app) you need — for example, Microsoft Word to create documents — locally on the hardware or use web-based applications like Google Docs that you access over the internet.
A POS system works in much the same way. Point of sale software is installed on POS hardware and powered by either a local server or an internet connection as a cloud-based POS system. Additionally, like a computer, it can do all these other business-related activities like tracking inventory, managing vendors and employee labor costs, and so much more.