Point of Sale Software

Here are some Articles from the Blog Subject - reports -

Retail express: Solutions for soft drink category growth

POS SOFTWARE

Retail Express, had an interesting article that is worth looking into on page 12. In our POS Software, it is easy to try.

It is about rearranging products in the fridge into proper categories.  Doing this, they claim you can drive sales up an incredible amount. See the arrow marked in brown.

Click here for more details.

There is no reason why this theory should not work for any department. Try a department, then see what are your top sellers in that department. 

Go to register reports and select the top stock report as marked with the red arrow here.

 

You get this screen

 

Now select your department.

Here I used the stationery department. I put in 99 million in red for illustration. That is overkill - put in 100. I also selected a whole year as short periods can have significant fluctuations. We do not want to do this every week.

Now study the report to see your shop's strengths. See what do you sell. 

Now go to a major retailer's website and see how they categorize their department. Some like Amazon and the supermarkets have spent millions on this categorization, so they know something. Also, check out a few other shops. 

You now know the theory and your strengths, so layout your stock in a logical order.

Why not start now, pick a small department and see how you go?

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In one second from now you can know your top selling stock

POS SOFTWARE

Follow this, and in this instant, you can precisely know, track, and control your top-selling products in real-time. 

Go to Register reports.

 

Now pick "Top N Stock Sales for a Given Period."

 

Now in the form put in this week.

A report comes out that looks like this with your top sellers listed.

 

Do it now, and then please inform me how you went.

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Two terms that our system uses for debt collection

POS SOFTWARE

We do suggest rather than using extending credit to your customers. Look to VISA, Afterpay, or Zip. It is these people's jobs to collect money.  Sometimes it cannot be helped, and you are stuck with the debt. If you get caught out, here are the terms that our system used.

Our system uses a very formal terminology and methods here.

A token payment is a small payment made regularly by a customer who cannot afford to pay the full amount you're owed. It shows both that they have a willingness to repay the loan and they have not forgotten.

What can happen is that a person who is paying a little at a time, can at the end owe you almost nothing. This can be difficult to collect. So what we suggest you do is set up a payment plan that includes a balloon payment. This is a lump-sum payment of a decent size at the end

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How to look at what sold in Christmas last year

POS SOFTWARE

Here is a quick way to search at what sold at Christmas last year. It will take you a few seconds to do and give you much to ponder on.

Go to register reports and select the top stock report as marked with the red arrow here.

 

I think it is easier to work by departments. In dates that you are thinking of ordering for and select the top 100 items.

Now examine this list to see what did sell. 

I find it useful to do the same analysis for the year before so 2018 as it gives an extra comparison.

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Get a comparison now to last year quickly

POS SOFTWARE

This will give you a comparison of how your shop is traveling this year to last year instantly,

Go to register reports and select it marked in green.

point of sale reports

Now select the Monthly Sales Summary.

Put in the dates for this year and then put in the dates for last year.

I find it easier to work on formal financial dates, so you align with your accountant's figures. The 17th of a month to the 16th of the next month is also a month, but it isn't very clear.

So use calendar months, financial quarters, etc. 

Now pops out a detailed report among which you will see a breakdown by dissection. 

Now you will get a report that looks like this.

Dissection monthly reports

In this example, you can see books went up. At the same time, the cards were about the same. Confectionery and drinks went down, and so on.

Now give it a shot.

 

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How important is a supplier to you?

POS SOFTWARE

 

Required by businesses is a strategy with your suppliers.  Without suppliers, no business can function. 

We call this strategy Supplier relationship management (SRM).

You have to be careful as suppliers have many interests. Some of these interests are not in your interest. Still, they have a vested interest in helping you market more products. They tend to be much more informed about your products, market, and competition then you. Much of your success depends on them. Yet before you can plan an SRM, you need to find exactly how important each supplier is to your business. 

Here is a quick and effortless way to get this, which will take a few seconds.

Go to Cash register reports> Sales - Stock > Supplier Stock Sales for a Given Period.

Now, although there are many options there, let us keep it simple for the first run. Pick the last financial year and let it rip.

You will get a very detailed summary report of sale details by the supplier in a few moments. 

As a rule, I suggest you look at the largest few in the quantity column as these suppliers are bring in the customers.

Also look at the largest few by profit as they are paying your bills.

Now readers go for it and let me know what you find out!

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Looking at the long focus in the shop

POS SOFTWARE

What you will notice is that successful companies focus on the long-term. If you think about it, there is often little you can do in the short-term. You can do more in the medium-term. You can even more in the long-term. Plus, it is the long-term where you can see the critical changes in your business environment.

I will show you here a quick and effortless way to look at your long-term trends in your shop. It will take you less than a minute to do, but I promise you that you will have many hours of thinking.

What started this off was a big discussion by newsagents on a report recently issued by Google on "Australian Media Landscape Trends" but concentrating on "What caused the decline in Australian newspaper revenues?" You can find the report here. It makes interesting reading as it is well researched. This is why everyone was so impressed with it. But, what caught most of the interest was the figure Google released on the fall of print circulation. It seems way off. In 2002, print circulation sales in this report were $1.3 billion. In 2018 it is listed as $0.8 billion. If the figure in 2002, is correct, then the figure in 2018 seems to be much too high. There may be many reasons for this apparent discrepancy. Although there is nothing in the report about it, many small businesses incurred much more significant losses due to this eg, the milk bar, newsagencies, etc. that made a living selling newspapers. A thousand newsagencies gone, and the rest have suffered significant losses in valuations. No-one is talking of compensation for them!

Anyway, what was wanted is a way of telling a small business what their figures would be. How do you get such a snap-shot of the long-term of a business?

To find out; a visual graph is the best.

Here is an example, this is a graph of newspaper sales in a newsagency from when the owners took over in 2005 to the end of this report in 31/12/2018

The green arrow is about when they first decided to give up newspapers. As you can see, they were large in newspapers, and their fall was much larger then what Google states. Looking at the graph, you can see that the trend down is accelerating after 2008. Soon they decided that it was not worth doing the work for sub-agencies or deliveries, so they dumped newspapers. Then they only took the newspapers back after many discussions.

It is a fascinating example, but you can do this for any dissection or product that applied to your shop. If you are doing this, I recommend working by month. It smooths out the daily sales variation but keeps the patterns. Plus, its the way most people think about their sales in monthly terms.

Go to Cash register reports> Sales > Sales dissection monthly sales trend.

Select a department, put in the dates. If you have it, look at 20 years and a few seconds to see the long-term.

See how you go and like always let me know as I am very interested in stuff like this.

 

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How to use the location information to increase profit

POS SOFTWARE

A lot of your data is in your POS Software and this is another example of how you can use it to boost your profits and give you a competitive advantage.

Go to cash register reports > Sales stock > Sales by Store location for a given period.

Now for this exercise, I put in the last quarter which is what you would do usually, although not much is normal now. You want this exercise a reasonable time frame.

Out will come a report with a lot of what I am sure you will find interesting information.

Here look at the locations with

1) High holding costs and low profits. (Problems)

2) Low holding costs and high profits (Stars)

These are two of the best metrics for gauging the performance of the locations in your shop to see how well you using your retail space.

Now you can experiment.

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How To Find Your Slow And Dead Stock In The Shop

POS SOFTWARE

This is a common problem in retail having:

Slow stock does sell but only slowly.

Dead stock does not sell at all.

Both cost money to the retailers, costs cash flow, money and takes up space that should have stock that sells better.

Now in identifying your products that are slow or dead go to register reports > stock titled "Old Stock on hand by Date last received"

I tend to do it in two parts. I check the overall problem in the shop to see the scale of the problem. Then I go by department in detail as its people find it better to examine this way.

This gives you a listing of your stock based on when you received it. This stock is rarely doing you much good. As I stated, it costs you to keep it.

Now once you identified it, what are you going to do about it?

I would suggest firstly move it because maybe it was in the wrong area. Good clean and a nice presentation can do wonder.

If your decision is to minimise your losses on this stock by slashing the price and to move the stock here are some options.

1) Offload them on sites such as eBay.

2) Use it to make a bundle. Put an old stock item that does not sell with something that does sell and turn it into a bundle.

3) Make a bargain bin.

4) Use the stock for your loyalty marketing program.

5) Use them as specials when you have a marketing season.

 

 

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Compare your fathers day sales out

POS SOFTWARE

Do you want to see how your fathers day sales went?

Here is a quick and easy way to do it. It will take you less than a minute!

Go to Register reports

Now select Sales register > Sales comparison

 

Now put in the following

You will get a very detailed report of what happened for that day for you to examine.

 

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You need to make a policy for tracking your retail promotions

POS SOFTWARE

This came up a few days ago, and what it has done is mucked up a shop's sales history file about profit.

Say the retail item cost is $10.00 and it costs you $5.00

What happens is you may decide to do a sales promotion in your shop, and it looks like this.

Here every pack sold means that each item sells at $6.66 and they cost you $5 each. So you have made $1.66 profit on each item. 

Now the retailers had some dead stock and wanted to get rid of some of it, so he introduces a new product into the mix. 

An item (B) that say also sells at $10.00 and costs them $5.00. I am trying to illustrate a point here. 

So your promotion offer now is a “buy this item and the other item free”. 

Now should your sales and profit figures be recorded in your POS system? 

Method (1) The first item at full price. 

So each pack means that you have sold each one of them for $10.00. Their cost is $5.00 thus giving you $5.00 profit on each one. Item (B) is considered being given away for free.

Or

Method (2) All the items considered sold at $6.66. 

They all have a cost of $5 each. So you have made $1.66 profit on each item. 

You need to decide. 

What has happened here is that as a shop did not make a policy. Some people rang it up using the method (1) and others used method (2). 

Now what is showing in history is a higher sales margin on one item then there should have been. 

You need consistency in tracking promotions if you wish to correlate your sales.

Make a policy first.

 

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What identifying your top selling items can do

POS SOFTWARE

Why identifying your top-selling items and you can do with this information!

This is widely used by our clients in music shops but it can be used by any business.

Well, who knows what sells well today! It is all different than it was! With COVID-19, your experience now works against you.

What you need to do is look at today, see what worked, and try to figure out why it worked. We can help you with this, and it is easy to do in our point-of-sale system.

Go to Register reports

 

 

Now select "Top N Stock Sales for a Given Period"

 

 

Now in the form put in yesterday.

 

Now a report comes out that looks like this with your top sellers listed.

Now, these need to be reviewed to see what you did right here. Take your time.

Now the kicker in retail is a top seller today will often be a good seller tomorrow. Studies show that a top seller today will sell about 66% tomorrow. So you need to check if you have adequate stock for tomorrow. If not in that spot you will need a substitute. 

Give this a shot and tell me how you went.

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You need to assess how your business is going

POS SOFTWARE

 

To move and improve your business, you need measurable facts. Experience and feel now will not cut it as we are not living in normal times.

So in your point of sale software let us get some information.

Go to reports and the click on sales

 

Point of sale menu selection for compare

What we are going to do here is to check how each department in your shop is doing in comparison to previous periods.

Select customer and put in May 2020 and compare it to May 2019.

Now out comes a report with the simplified options here

 

Comparison reports

 

Now there are lots of details for you to look. If you want to look at one department click on the left.

Now with all the detail, we put in you may want more. Say I wanted to know my average basket price in a department compared to last year to check if the public now is buying cheaper priced items. This is not in the report.

So on the top left-hand side is a little export button.

 

Export to excel

Now click to export to excel or OpenOffice (which we support and is free here). Once in a spreadsheet divide the qty into the sales to get the average basket value. Most people are reporting to me that the average basket values are up.

And that was the beginning of what you can do here.

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Break-Even Analysis

POS SOFTWARE

Today many retailers who are approaching financial institutions are being asked by them to provide estimates. It is not that these institutions are worried about security as most of these loans the government is helping out with that now, what they are concerned with is can you pay the loans?

One of the best tools to reassure these people is the break-even analysis,  something that I have discussed here a lot but now seems to be mentioned a lot more.

The Break-even point, where profits are equal to expenses!

 

Although because of coronavirus, its all the rage now. It has however widespread use beyond that e.g. how much extra sales do I need to cover a proposed shop fit to make my initial investment back, how much additional sales do I need to pay back the setup and running costs of a loyalty program or how much extra sales do I need to increase my shop hours?

It is an invaluable starting point for finding out where you are at and where you can go. In this case here, is it better for the business to spend its spare money on a shop fit, a loyalty program or to increase its hours?

Here what the financial institutions want to know now is how much business could you lose and still pay your way? 

Now what people often do is give the figures to the accountant and let them do the analysis, which is what these financial institutions want but now they are being very flexible and often will take your figures. 

To calculate a shop's break-even point in you need to know the values of three variables: You can get it out of your profit and loss accounts

Sales turnover: This is simply your turnover (this one is generally easy to get)

Now go through your expenses and put them into these categories.

Fixed costs: These are costs that don’t change whether you sell a few or a lot. These are the costs of just keeping the door of the shop open.

Some examples are 

Rent

Full-time staff

Insurance

Electricity bills 

Bank repayments

Accountant fees

These need to be added up.

Variable costs: These are costs that depend on sales, the more you sell the higher they are:

Part-time staff

Cost of goods sold

Credit card fees

Now, these need to be added up too.

Notes here:

Some of these costs can get programmatic as to which category they are in when there is doubt the rule is to put them in fixed. Generally, unless they are huge, it does not matter much.

Also, often people argue that some of these variable costs change dramatically depending on volume. Well in most situations unless you go pie in the sky, they do not change that much, e.g. you can get a better margin on many items if you sell heaps but are you likely to sell heaps? Like everything, you do need some intelligence to use this analysis.

Now the formula is

Variable profit = (1- (Variable costs)/Turnover)   This gives you your shop profit for each $1 you sell.

Now the Break-even point is (Fixed cost)/(Variable profit)

 

Say for example you had a turnover of $550,000 

Your Fixed costs are $60,000 a year

Your cost of goods sold is $370,000

Your other variable costs are $40,000

So your variable cost is here is $370,000+n $40,000 = $410,000 

Variable profit = (1- (Variable costs)/Turnover)   This gives you, your Variable profit = (1- (410,000)/550,000) = 0.218

Now the Break-even point is (Fixed cost) /(Variable profit). This gives you your Break-even point as  (60,000)/(.218) = $235,714.29

This would signify that this business is relatively healthy from coronavirus as it can continue with over half the loss of its sales.

Once you get used to doing it, you will find that it typically is like half an hours work.

Now what a lot of retailers would do now is look at their basket reports in their point of sale software, see what a typical basket profit is and divided that into the Break-even point. This determines how many sales they need a day, but that is just the start because there are heaps you can do with it and this will be a subject for a future post.

If there is a lot of interest, I am quite happy to do a webinar on this calculation, so please let me know.

 

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Adjusting shop hours

POS SOFTWARE

 

In line with pretty much every retailer in the country, many of our clients are now adjusting their trading hours in some form or fashion. Sometimes it is forced on them by the malls, sometimes it is voluntary due to the new marketing conditions and often it is because of the deep cleanings everyone doing now.

Now that we have some history with the new trading conditions, why not use your software to help to make decisions about traffic in your shop?

Here is a training video of ours that explains how to use your point of sale software to get traffic analysis by hours and explains some details of the reporting tools available to you.

Please click here.

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What sells now?

POS SOFTWARE

With Coronavirus, it is clear that there is a major change in what retailers are seeing selling. 

The question raised now was do I have the right stock NOW in my shop. Another important question is do you actually have the stock you think you do? It is so easy to forget what you have when selling is so abnormal, here is a report that can help you.

And it is easy in our point-of-sale system to find out what is selling.

Go to Register reports

 

 

Now select "Top N Stock Sales for a Given Period"

 

 

Let put in the dates since the lockdown took effect.

 

Now, the top items here need to be checked that you have enough stock.

Give it a shot and see how you go.

I expect that some items would be selling well some are bombing because everything is changing due to Coronavirus. This is one report, that I suggest you run regularly until this crisis settles down, gut feel and experience can work against you.

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How far off are you to last year's sales due to coronavirus?

POS SOFTWARE

What many want to know is what effect is this coronavirus having on your business.

What several of my clients are telling me because many people are at home, they are buying very differently now. This I will discuss in another post. Let us first work out where we are up to now.

The report I recommend that you look at first is in the Reporting Documents > Dissection Family Class Period Sales Comparison.

Put in the following details.

 

There are many more options here but let us keep it simple, you can always experiment later if you want to learn more, so leave it as All Stock lines and do not select for the extra information as yet. You will still get a very detailed comparison by department and class. 

 

It will make I am sure fascinating reading, in my view, the two most important metrics here are Qty which are the number of sales for each department and the $ Profit made by each department. 

What can also be useful is running the same report comparing the year before last year with the same period this year.

Remember that random chance dictates that about third are up, a third is down and the rest about the same. So you need to study the figures.

At the end of today's trading, you simply need to include date of today to get current figures.

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What are my best selling items?

POS SOFTWARE

Here are some questions to ask yourself.

What are my best selling items?

Which items in my shop are just sitting there?

Here is a rule that that shows in retail often all the time, a small percentage of your stock lines up all the time give you almost all your sales. 

I took a data file from a customer of ours, and in a year, I found that they sold 20,060 different stock lines.

Here are some figures:

Less than 1% did 50% of shop sales.

The top  2 stock items did 15% of the shop sales.

Ten stock lines did about 33% of the shop sales.

Now let us find your top stock lines.

Go to register reports and select the top stock report as marked with the red arrow here

You will get this screen

Now choose your criteria, note there is also a tab called "More Criteria" which has more options plus the traffic (which is people in the shop) option, but we will discuss that later.

I do suggest that you do this by overall shop sales and then research in-depth for each department.

It’s that simple

It can be done in less than a minute.

Check your treasures. 

 

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Comparison reporting

POS SOFTWARE

We suggest that every month you do a sales Comparison report to compare how you did this month to the same month last year.  This is considered as being a very good indication of how you are travelling,

You will find it here:

Main Menu > Cash Register > Register Reports > under the Select Report tab, expand the Stock folder > select the report “Dissection Family Class Period Sales Comparison”.

Then you will see this screen.

 

Now put in the last month of January 2020 and compare it to January 2019.  Then out will pop out a wide range of KPIs, including quantity, cost, sales, profit and GP%. with a breakdown by amount and percentage. I find the GP% to being very useful as that is the actual figure that I am getting not what the suppliers are telling me.

Once you have done that please experiment with the extra options in the More Criteria tab which I marked with a green arrow.
 

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Gross Margin Return on investment (GMRI)

POS SOFTWARE

This is said to be the most important KPI in stock control.

What it measures is how much did you actually make on an item? It is a difficult question to know by gut feel particularly when you have thousands of items that you handle. 

 

This is what the chart looks like in theory.

 

In practice, it is more complex because this chart assumes that you are conscious of what category an item is in. Too often a Low Margin/Low volume item should not be in the shop and is an accident. Also, it is very hard to assess which item is better a High Margin/Low volume item or a Low Margin/High volume item. Also as stock comes and goes, prices and margins change all the time it is very hard to determine by gut feel what is working and what is not.

This is what Gross Margin Return (GMROI) is designed to help you determine. What it does is measure your actual stock items and gives you a financial return figure on your stock? Generally, it is measured in a department or by supplier although I have seen it used for every item in the shop. What it does is tell you where you should look in your shop to get the best return on your orders.

Here is how it is calculated manually which will give you a feel of what it does.

Step #1: Gross Margin in Dollars= Sales x Margin%

So say you sold $1000 last year of an item, your margin was 30%, so your profit is $300.

Step #2: Average stock holding = ((Stock at start of the year) + (Stock at the end of the year))/2

You started the year with $1600 of stock and ended the year with $100 so your Average stock holding = (1600+100)/2 = $850.

Step #3: GMROI = (Gross Margin in Dollars )/(Average stock holding)

GMROI = ($300)/($850) = 0.35

What it tells you is that for every dollar you have invested in stock, you are getting a dollar back to pay all your expenses and buy new stock.

What it tells you is that for every dollar, you invested in that item, you made 35 cents. Of course, no one can maintain a business at that level; I just made a simple example to explain the concept.

If you notice, the calculation itself is almost manually impossible to do for each item. Here are some immediate problem points, items often do not have a steady margin; the 30% is often an ideal that a supplier provides and my stock holding obviously, here varied a lot during the year. Say, for example, my Margin was closer to 25%, so I made $250 and my average stock holding over the year was $100,

My GMROI = ($250)/($100) = 2.5, so I made for every dollar on that item $2.5 

The computer can overcome these problems with GMROI 

Go to register reports

 

 

Select GMROI marked in green

 

 

Now select the date you require. I suggest looking at last year, mainly as it is now the time we are looking back. 

I selected in this shop confectionery.

Out pops a report that looks like this among other items.

 

Now in green, the On-Hand figure is zero; the stock ran out, that would be definitely one to look at what happened there and the one marked in red; it has a negative result; this is almost certainly due to data errors which I will discuss in another post.

As these two items show, to get any use from GMROI you need to export the data into excel or OpenOffice (OpenOffice is free and well worth getting if you do not have excel) where you can edit and remove if necessary bad data.

So on the top left-hand side, click export (where the green arrow is), and click excel where it's marked in purple.

 

 

Now you have a list to review and edit. That is why it must in my view be in excel otherwise you cannot really do GMROI.

High turnover, high GM% and low stock holding are perfect while low turnover, low GM% and high stock holding are terrible.

However high number does not necessarily indicate that all is good, it often means you are under ordering and do not have enough stock, although sometimes it means that the item does really well only very few people come into your shop to get it. So you are not going to sell much more if you bring in more stock. Maybe look at add on sales for that item instead. Low numbers tend to indicate that you are over-ordering.

Only you know the retail dynamics of your shop and it can help and a detailed system of stock control like ours can keep the customer satisfied and you in business.

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