Reports

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Reports

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

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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Keep in touch with mobile and email

POS SOFTWARE

Some you are now on holiday or thinking about taking some time off, yet you would like to know how the shop is going. Well, we have many reports, eg shop's End of Day that can be emailed to many different email addresses. If you prefer it can be sent by SMS to your mobile.

This is an excellent feature if you are away from the shop.

PS Another use is to allow you to archive these reports into the cloud for storage and later reference.

 

How you travel in 2019?

POS SOFTWARE

Knowing where your business is going is essential. This is afterall 2020 (20/20 vision)

 

Now is an appropriate time to take a quick look find how well you went in 2019 and how you compared to previous years.

Go to register reports.

 

Now select the item marked "Sales Comparison for a Given period".

Note you can do it by a supplier, but that can be done later when you have more time for detailed analysis. What we are doing here is getting a quick idea.

It takes two steps.

1) Put in here the dates 

01/01/2018 to 31/12/2018 AND 01/01/2019 to 31/12/2019 dates

It only takes a few seconds and out will give you pages of detailed information showing how went in 2019 and how you went compared to 2018.

 

Write down some key figures.eg Turnover18, Turnover19

2) Now go back in and run the report with 

01/01/2016 to 31/12/2016 AND 01/01/2017 to 31/12/2017 dates

Write down some key statistics, in this example Turnover16, Turnover17

You now have four years of information to study. This should give you a pretty good idea of how your business is travelling now. I find drawing a graph of sales shows me a clear picture.I hope it went well for you.

Note if you use our Ad Hoc reporting you can automate much of your analysis, but in practice, I find keeping it simple like this seems to be more meaningful. If you want to go into something more scientific, you may find this an excellent place to start.

This is just another example of how powerful our point of sale software is for retail management.

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