Ransomware about six months ago, every week at least one of our point-of-sale sites was being hit with a ransomware attack, and it was looking like the problem was going to get worse. Client's computers were being locked out. I am pleased to say almost always we could get our clients up and running without paying the ransom.

Now we have noticed a dramatic reduction is the number of such attacks. Much of this has to do with improved security in the retail industry. Something that I believe we had something to do with and in our marketspace, it would be fair to say we became the leader in this such as pushing an earliest introduction to windows 10 partly because of its superior anti-malware handling, pushing people to adopt cloud and local image backup, creating general awareness of the problems through newsletters and blog posts, etc. All this advice is still valid and our latest advice on how to stop ransomware is here.

Having said that although we are clearly seeing a significant fall in ransomware attacks, it certainly not over, and until it is, retailers need to remain careful.

Our advice too remains unchanged, if you do get hit by ransomware is do not pay the ransom. Paying these criminals sometimes gets your data back, but generally it does not as these criminals know that they cannot be sued and they know you have no legal recourse to get your money back.

PS If you are interested in learning how the ransomware business model works; a good study can be found here.

Of course, credit in retail has costs both real, which includes the expense of capital, the administration costs of handling it and the opportunity cost where the money advanced to your customers could be put to other items. Plus there is the risk that many of these debts will go South.

The major method of handling debt in retail is by established credit limits which I talked about here.

It is a discussion about the advanced functions and control in our pos system that can be used to control these debtors.

The common method used is to first demand all goods be paid up front or by lay by. Then after monitoring this for a while steadily allow them more credit if they purchase regularly, and if you see that they make timely payments slowly increase the credit. Sometimes this does not work as some clients often need credit before they can start to trade with you so like everything you need to use your intelligence.

Above all monitor the KPI, which is how long, on average, it takes them to pay their bills.

Another common KPI used is (Total debitors)/(Average daily debitor sales)

So if say you did $500,000 in sales in debitors last year, divide that by 365 days = $1,365 a day.

Say you are now owed $150,000 so your figure is 109 days, which would be a worry if your credit term was 30 days. What bit should be in 30 days is 30 x $1,365 = $41,000.

This figure in practice tends to be a good rule of thumb.

One point I was told by my accountant just before I started my business was monitor cashflow because the number one cause of SMB collapse is bad cashflow so what I put into our system was an extremely powerful system for monitoring it. Check it out here.

Many people before they take on a big customer want to do a credit check before they set in their pos software a credit limit.

Although you can get this credit check free if you like a credit report about yourself (links provided) to see what it looks like you need to pay, to get a credit report about your clients or potential clients.

The four biggest agencies in Australia, in order, I have put links into the free plan here, to test for yourself for your score.

Veda
Experian
Dun & Bradstreet
Tasmanian Collection Service is local but very important to people in Tasmania.

If you want a full report

Veda [Link removed] Experian

One point I warn you is many complain after filling out a Veda free credit file, they get a call from Veda asking why they need the information, and then the Veda salesman starts explaining why it is important to get a paid report. Just say NO.

As there is no standard for credit scores, you will find that these companies produce their own score based on whatever they decide, and they all use different rating systems. As such, they sometimes give a very different result for the same person, so you get rejected for one lease, which used Veda and another agency that uses Experian, a different credit agency, accepts you.

VedaScore

As Veda is the most popular system used, I will discuss it. What you get is something like this; note the old system was up to 1200, so your old score might be very different.

Using the Veda system, everyone gets a credit score between zero to 1200.

Note The national average is 550, so do not be too upset if you get a score about that.

What you decide to do once you get the score of someone is up to you, but I will note, I have not noticed a good relationship between the score and the subsequent debt history being much help.

Here I explained and showed you how to calculate the GMROI which is the most important of all retails KPIs.

It shows how much profit you are making compared to your stock investment and is used to reviewstock items for profit. Many retailers run and study their GMROI every month as it is a very powerful tool. However, it should be noted that like any measurement, it has some shortcomings that if you use it, you need to take into account. Here are some common issues.

- Items that sell out do better with GMROI. This is a common problem in retail; it causes even marginal products to look like stars. That is why you have to look at the sales too of the item.

- Suppliers have different payment cycles, for example, a supplier who insists on monthly payments and their items have a stock turn greater than 12, actually cost you nothing. A similar situation occurs if some items are sold on consignment such as telco products, in both these cases the GMROI is not giving you a meaningful figure.

- Some items you need to have as, they bring in customers, they may have low GMROI, but you must have them.

- Many costs are not included in the calculation such as space, handling costs, electricity and equipment costs. These costs are frequently not minor. If, for example, an item needs more handling, then another item, then it’s costs is higher, but you will not see this in the GMROI.

- Volume is important too. An item that sells more is often desirable just for that reason.

Like everything, you need to have some intelligence and thinking too, we are still a long way from having a computer run a shop.

Warning its just been announced that a website linked to Tower systems has been hacked again. Although its annouced the problem has been fixed on the website, if you have or had an account on their website, I strongly suggest that you review your passwords there. The question you need to ask yourself now is have you used these details on other sites? If so, it is possible that a hacker now has your account name and password on these websites. This information is the main reason for such website hacks as the average person, has about five passwords to make it easy for them to remember. A skilled hacker knows this sh they will immediately test this information on such sites as paypal, Amazon, Coles, common web based email and others. If they get in; it can be a big problem.

Although I doubt that this site will register the data breach formally, as many don't, still one site, I do recommend you go to, to test your email, and your common account login is here.

Enter in your common usernames and email accounts and see if anything has come up. Now register yourself to get warning if something comes up.

Now if you want to see for yourself hacking being done in real-time, a large computer company Norse which owns throughout the world thousands of data centres monitors many of the hacking attacks that come into its system, by location, severity and types. As numbers, it is not particularly interesting but what they have done is turned it into a memorising animated coloured shooting arrows that cross a map of the world. You can get a feel of just how big this hacking is right now. It's a war and its simply amazing to watch. Just remember this is only the information from one company; you can multiplied it by a million times more. Hacking is a multi billion dollar industry today. You can see attacks from one country to another.
 

Check it out at this site

http://map.norsecorp.com/#/

To see it for yourself, you will be amazed.

Many of us have family members that soon will need to find a future career. But what sort of a job, will be their chose? What do we know now is that we need to help them to prepare that child for the future? What they require who knows, but I am sure that computer literacy will be most important. It may be easy to sit back and think computer literacy is only important for those pursuing computer positions, but this is 2017. Computers are currently used in almost all aspects of our lives for example medical, finance, building, retail, management jobs and others that historically didn’t involve computer know-how now do. If you look through job sites like seek.com.au, you will see heaps of positions requiring computer skills.

This is why candidates today can distinguish themselves by being more tech-savvy.

Most of our clients are in a lucky position that they can help these family members get those skills in their shop, which can help them later find a job on their own.

The most common software required is used our point-of-sale system are used by almost all organisations. Word processing and spreadsheet software both of which our software uses. Their knowledge of Microsoft or the free openoffice would be a good start here. By helping not only will they do work useful for the shop, but they will gain experience with Office suite software making them much more comfortable with using these programs.

Additionally, an accounting system would be a great help, here the backoffice functions in our software would help them as would knowledge of a formal accountancy program like MYOB, Quickbooks or Xero as all the accountancy programs in general use are the same in function.

If you have a website for the shop, then such skills would be useful for them too especially the graphic skills as everything is moving online.

Not only will you see that this family help you, but it will also help them in tomorrow's job market.

PS I am actually a great believer that knowledge of many of these functions is a considerable help to anyone today personally too. For example, we have a media centre at home, to watch TV, you have to know basic computer skills.

The question often raised do I have the right stock NOW in my shop. For example, as I spoke earlier Valentine's Day is coming up? It requires specialised stock, do you have the stock, perhaps a more important question is do you actually have the stock you think you do? It is so easy to forget what you have, here is a report that can help you.

Go to Register Reports marked in green.

Now select in stock, "Stock Sold During Period(a) Not Sold in Period(b)"

Now out pops this.

For those that know what mirror marketing is, you will find this report is a form of this. What the report will tell you is what was sold in a previous period (a) last year but has not been sold in a period (b) . Since Valentine's Day is a very narrow marketing season, you need probably to run it now.

Now in brown, you will see that there is a lot flexibility for your reports there is also an integrated traffic analysis available too but let's keep it simple for the time being.

Now you will get a report with what you sold over the period (a), but you are not selling in your current period. What you find is I am sure worth investigating.

Another idea to consider is I did this report for other years beside last year.

This is one report, that I suggest you run regularly, say run the month coming up last year as period (a) and last month this year as a period (b) because once you get to know it, you will find it very useful.

Yesterday a major Telstra outrage, today we have the ATO site down. I have tried several times as our tax is due on the 21st and the 28th of this month. I am sure many others too as its the start of the month when we start to work on it, but unfortunately we cannot enter the website to put in the details. You can pay the amounts as that goes through the bank system, but we need to enter in the details to get the digital receipts otherwise we get fined.

Overall it is painful to use this ATO site as you have to use firefox as they have never bothered fixing AUSKEY to work with another browser only firefox, did not even bother to get firefox copies like Pale Moon going. All this after the ATO has spent a fortune on the site, a lot more than they should have I think.

Most cash drawer work through the receipt printer so firstly check your printer is working correctly. 90% of the time, we find the receipt printer has run out of paper.

If the receipt printer is working fine, then check if it's a loose cable. Check its in securely, push it in order to make sure. If that does not help take the cables out and put them back in.

If this does not ďes not fix the problem, consider asking for help, as a rule I would expect that there is a problem it is in your receipt printer not in the cashdraw.

If you’re still manually controlling your loyalty program, you are wasting your time and resources.

Consider replacing it with our point of sale which is available free to our users. All customers have to do is display their VIP card, if they do not have their VIP card all they need to do is give you their name, phone number or email address and your system can track their purchases and issue them their rewards.

You will be surprised who uses them.

Surprise Telstra down again and its all over Australia.

As a result, our call centre now cannot call anyone on a Telstra mobile, so I estimate about 15% of our clients we cannot contact. What really annoyed me was we could not get an answer from Telstra as to what was going on when we asked. They could at least have told us what was happening, we only found out it was happening after reading it on the news online.

Apparently one exchange when down, Telstra it appears has no decent redundancies so the system went down.

I wonder how Telstra clients feel about all of this; they are paying a premium price to use this services because it is supposed to be the best.

An Asset Register is used to record asset purchase records, which can then be used by your accountant to calculate your depreciation schedules with your book values. A client asked me to write one for him, and I am releasing it as I am sure it will be useful to many of our readers here too. Although it was written for a retail shop, it can be used by any organisation.

To download a copy, please click here.

It handles up to 61 items, and you can add the suppliers if required on the second page.

If you need something extra added, please let me know.

Having the stock for Valentine's Day!

If you look in google trends and put in Valentine's Day, for Australia over the past five years, you will see this graph.

Although interest is falling, it's still very high. It's about 10% of Christmas. However, you can expect interest to be slightly lower this year then last year. The next point to note, is that there is only a narrow marketing window, interest starts now and reaches a peak on Valentine's Day and afterwards collapses. So you need to spot on the stock you require, and if you have done nothing, you need to move now.

Now if you look by sub region.

Interest is constant across Australia.

Now if you look at related queries, click on top.

You can see what people are doing is looking for something to buy for Valentine's Day. Clearly they are open to ideas but clearly do want is gifts and cards.

Now the next point is to see in your shop, your existing stock how does it go for Valentine's Day do you have this stock?

At the point of sale software

The report I recommend you look at is the Top N stock report which gives you among much other details the top-selling items.

Go to Register Reports marked in green.

Select stock and now you will see two reports, click the one on green first. The purple you should hold in memory as you may need it before placing an order.

Now select last year, for this date until Valentine's day (see yellow arrow)

In blue, you will see I selected 40 items, what I am looking for here is the top 40 items, which for most people should be plenty. In purple, you can see I selected by item sold, but of course you have many more options there which you may want to experiment with as well.

Now you will get a report with your current stock on hand figures to see how your shop looks stock wise for Valentine's day. You also have supplier's details too which you can investigate with the Top N stock report by suppliers that I spoke about above.

Another idea to consider is I did this report for last year, it's a good idea to do it for other years as well.

Stock comes in, goes out, prices and margins change all the time and its very hard to determine by gut feel what is working and what is not. This is what Gross Margin Return on Stock (GMROI) does, it measure your actual stock items and gives you a feel of what is the best financial return on your stock? It is generally but not always measured by department or supplier. It allows you to ask yourself, where is my money going to produce the best profit, I can get as what it tells you is that for every dollar you invest in stock, what items give you the best return?

Here is how it is calculated manually.

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 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 which is much better.

A computer can of course overcome all these problems.

GMROI for dummies

Go to register reports

Select GMROI marked in green

Now select the date you require. I suggest looking at the latest three months and the last year, although many do find a three-year period useful too.

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 do 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 but 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.

There are many frauds widely used by people to steal at the point of sale. Here is another one that you need to address. Its formal name is the banana trick.

Your point of sale software uses barcodes to recognise stock. However, this does not alleviate the responsibility on your operator from checking that the bar code matches the stock item. People have been caught switching barcodes from less-expensive items to dearer items hoping to pay the lower price for the expensive item.

The only way of stopping this is for your employee to pay attention at the cash register.

Note a variation of this fraud is where your employee purposely scans a cheaper item to allow their friend to get a good discount. The best solution here are cameras.

Farewell to the monkey…….

Wishing all our readers in the point of sale world, a happy and prosperous Chinese New Year, in this year of the Rooster.

A patch number 2436, is scheduled for release next week that will stop doggy dates like 17/02/2301 from being imported into your point of sale system by XChangeIT system in the future. This daft mistake created for us over 100 extra calls, you can double it for the industry because we are not the only ones in the industry. If you calculate based on industry-standard billing at $250/call, it's about $50,000 for bills from software companies like us, plus what is not in this total is the cost and time for the retailers plus their telephone bills so you could at least double it again so we are talking over $100,000 wasted. I am sure a solicitor could explain why it should be more.

Someone should send the ones responsible; who have not come forward to say boo, a score for their level of compliance?

If your point of sale scanner occasionally goes down, and you play around with it, and it works.

Here are some points to check.

Check that the user, is orienting the scanner correctly, some scanners just need to be used in a specified way.

If that looks good, then try testing with a few barcodes that you know will work. It may be the barcode.

Then check the battery status if it has one.

Check that the scanner is securely plugged in, a common problem is that the cables have become loose, if so take the cables of the barcode scanner off and re plug it all back in. Sometimes this fixes it.

If it still does not work, check the cables for wear, tear and breaks.

Check the scanner lens are clean. (see my previous post about this here.)

If it still does not work, then try if you can put the scanner on another computer with different cables if possible. If that works now the problem is either in your computer or in your cables. Try if possible to test the cables by using the original cables.

If that does not work, please give us a call.

This morning, one of our clients' data suppliers system is releasing invoices with a dodgy date in the invoice.

Here is a sample of what happened, in this electronic invoice.

Where I have circled the date in should be in the format YYYYMMDD so what this is reading is 17/02/2301 what here they intended to put in was a date of 31/01/2017.

As the date is clearly wrong, our software is rejecting the invoice which is why so many people are ringing us up now. This is resulting in a massive clogging up of our support bay. Today calls are up about 30% on last year as a result.

We are looking at a patch in our software to fix this automatically if it happens again as its obviously a flaw somewhere in the data communication system but now if you have a problem, please let us know and our support team can fix it.

Now is a good to find some time to reflect on 2016, review what went well and what didn't. It is also the time to plan for 2017.

Here are some good questions to ask yourself about your technology?

Does your system give you the information you need to make timely and accurate decisions? Our systems have 100s of useful reports such as sales reporting with analytics functionality that allows you to analyse your shop's sales data. Not only does this automatically keep track of what’s selling well; it also shows how many, how much income and profit you are making on each stock item, class, department, category, etc . This allows you to identify and focus on driving sales to your top items.

Can it do data mining? Sometimes automatic data search can find hidden gems in your data.

What is your average checkout, does it take too long?

If the queue is too long, it becomes a major source of customer dissatisfaction. You need to serve the maximum number of people quickly and efficiently,

Here is a report of transactions going through one of our client's point of sale systems.

On the picture above you can see where it is marked in green. The operators did regularly transactions at a rate of four a minute. What does yours do?

Does it do what you require, there has been much improvement in point of sale technology over the past few years, all helping to improve such items as stock management, GST calculations and EFTPOS?

Can it update prices automatically, can it do scripting? Or do you manually change prices and stops and starts which is a waste of time. In Christmas last year, I estimated this alone saved many of our clients between 10 to 30 minutes.

Can it do automatically do updates, or do you have to do it manually? Automatic updates have been the standard since before 2000. Without it, you cannot get patching so leaving you prey to many of the latest security threats. Plus of course manual updating is a big waste of time.

Your POS Software is an investment in your profitability. Outdated POS software affects the bottom line and reduce your profits. Modern systems can lower labor costs, ensure greater employee productivity, and increase customer satisfaction.

If any of these issues have an uncertain answer, why not contact our industry-leading advisors to show you what we can do?