Yeah, the lack of support for both UPC and SKU codes was nearly a show stopper for us, too. But after looking around a bunch more, I just couldn't find another POS system surpassing the other features Square offers, let alone the cost which seemed to average $60 per month, compared to $0 for Square.
We had to have a working barcode scanner for the UPC codes, so we put the UPC code into the SKU field. But we also needed the our product code in each item to interface with our internal inventory system, so we adopted the convention of the starting the Name field with our product code, followed by a space, and then the name of the product. I wrote PHP programs using the Square API to interface our inventory system with Square Items. It's been working very well for us.
We have many items with colors and/or sizes. Our product codes for those items use the same starting code followed by another code to indicate the color and size. So we put the base product code in the Name field and the rest of the code in the Variation Name field (again, followed by a space and the variation description, e.g. "Red", etc.). Each Variation has it's own UPC code.
We really like the look and feel of the Square POS, so were willing to find "work-arounds" for the parts that didn't easily fit the way our internal systems worked. I hope this helps you. Good luck!
