Point of Sale Software

Here are some Articles from the Blog Subject - reports -

Quickly find the information on a report

POS SOFTWARE

Finding Needles in Haystacks: Searching Reports in Your POS System

Shifting through lengthy reports searching for one piece of information can be a frustrating time-waster. But your POS system has a powerful tool to help you instantly find the exact data you need among thousands of lines. Let’s explore how to save heaps of time hunting for the critical information in the report.

Our POS Software includes robust search functions that index all text and data in the report. Rather than flipping through the pages, you can type a product name, date, or keyword into the search box.

It will display the matching instance highlighted for you within less than a second. As you can see here, marked with a red arrow, this report they printed was 13,533 pages long. Finding one item can be tricky as there are so many pages. You do not have to search; you get our software search engine to search for you. So I press the search marked with a brown arrow.

Up pops a box shown with a blue arrow. You would typically put in here "Red rose on the heart", but for the sake of showing you the power of this search box, I pressed "heart" and pressed a few times "Find next" till I found the one I was seeking.

Of course, if you know the exact title, this will make searching faster and hide results that are not relevant to you now.

 

Tailor The Query To Your Needs

Entering more specific search terms will help surface the most relevant entries. In our example, typing "Red rose on the heart" would directly take you to the singular product without dozens of unrelated results about red products or rose items.

You can also filter by various attributes like:

  • Date
  • Product
  • Price
  • Sale Amount

Uncovering Hidden Insights In Seconds

Besides eliminating frustration, advanced report search empowers you to unlock hidden insights about your business. Rather than being limited by static reports, you can instantly investigate any detail that crosses your mind.

  • What were my top-selling items last Valentine's Day?
  • How many gift cards were purchased in December 2021?
  • What was the average transaction value for a specific brand last month?

Your answers are waiting at your fingertips!

The key is taking the time to familiarize yourself with the search functions available in your system. A few minutes of experimentation can save you hours over the long run.

Let Your POS System Shoulder The Reporting Burden

Leveraging the built-in tools in your POS solution will help you confidently base decisions on facts rather than gut instinct.

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Debtor's trial balance

POS SOFTWARE

 

The Debtors Outstanding report is one of the most critical reports in a business. As a rule, it should be run at least once every month. What it does is print an outstanding balance for all your debtors.

This determines how your business is handling its debt collection. This is why banks and financial institutions commonly request this report.

Looking at the image above, I think you will find it great that you can select any date (I chose a date in 2017, seven years ago, to show how flexible our POS System is) and display numbers for this date. This feature is handy.

This report is located in Registry Report > Client Trial Balance.

This is one of the most critical reports in a business. As a rule, it should be run at least once every month. What it does is print an outstanding balance for all your debtors.

This determines how your business is handling its debt collection. This is why banks and financial institutions commonly request this report.

Looking at the image above, I think you will find it great is that you can select any date (I chose four years ago) and display numbers for this date. This feature is handy.

This report is located in Registry Report> Client Trial Balance.

You also get the date range you want the breakup among the other options. In general, most people use months, but some prefer weeks. Others use a 4-week cycle because it gives an extra month in a year. It's up to you to decide. If you need more options, click the More Criteria tab.

In the standard report, you will get something like

 

The name is drawn out here, but if you look at it, you'll initially see that almost everything is within 90 days. It would be a red flag if it's actual data, not many years ago.

What I find very useful is to look at it twice a month. This lets me stay on top of debt collection and spot any issues early. Monitoring the debt levels regularly is crucial for any business.

I highly recommend adding the Debtors Outstanding report to your regular reporting schedule. It can help avoid cash flow issues and keep your business financially healthy. Let me know if you have any other questions!

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Max Your Shop profit with POS Solutions' Reporting Capabilities

POS SOFTWARE

Client in the shop

Introduction

I recently spoke with a client about the most important benefits of our POS system's reporting capabilities. Here they are:

What was liked

One of the standout features is the ability to manage inventory, process sales, and track customer information all in one place.

The reporting features offered by POS Solutions POS software are precious for any retail business. With the data gathered, you can better understand your customers and make informed marketing and stock decisions. For example, the system can collect customer data such as names, contact information, sale history, and buying patterns. Then the businesses can quickly set up and run loyalty programs. Also, special offers or targeted marketing campaigns can be made by analysing this data.

You are, furthermore, stocking the right products at the right time. It can predict future demand for particular products and adjust your inventory by tracking trends in sales. This will assist you in streamlining your stock levels and avoiding stock-outs, which can result in lost sales.

Inventory management is another valuable reporting feature of POS software. You can easily keep track of your stock levels and each product's movement with inventory reports. You won't have to worry about over- or under-stocking, which can result in wastage or missed sales opportunities. Moreover, you can utilise stock reports for bookkeeping, as your products are your resources.

Stock levels, sales by product, and stock movement over time are among the inventory reports offered by POS Solutions POS software. By analysing these reports, you can identify which items are selling quickly, which are slow-moving, and which are out of stock. You can use this information to make informed decisions about product pricing, ordering, and stock levels.

Also, POS software can assist you in monitoring your business's performance in real-time. By checking key performance indicators (KPIs) such as sales, profit, and customer traffic, you can identify problem areas. Then take action as needed. For example, if you observe a decrease in revenue from sales, you can investigate the reason for the decline. Then take measures to boost sales, such as launching a new product line or running a promotion.

Conclusion

POS Software was the best decision they made for their shop.

Executive summary

> POS Solutions POS software allows you to manage stock, process transactions, and track customer information from one spot.

> Analysing customer data is the crucial benefit of POS software. You can better understand your customer base and make informed marketing and stock management decisions with the information gathered.

> POS Solutions POS software can predict future demand for particular products and help adjust your inventory.

>Stock administration is a significant reporting feature of POS software. You can easily keep track of your stock levels and each product's movement with its inventory reports.

> You can utilise stock reports for bookkeeping, as your products are your resource.

> POS Solutions POS software can also assist you in monitoring your business's performance in real time. By checking key performance indicators (KPIs) like sales revenue, profit and customer traffic, you can identify areas of improvement. Then take action as needed. For example, if you observe a decrease in revenue from sales, you can investigate the reason for the decline and take measures to boost sales.

Comments

Hahaha Chatgpt is writing this stuff for you and it shows.

Actually, I write my stuff, then use Grammarly to check my grammarly to check the text, but the words and thoughts are all mine. Here look at GPTZeroX, probably the best detector for ChatGPT content; unlike many, it looks at both “perplexity” and “burstiness.”

 

====================================================

What is the accuracy rate of ZeroGPT?

After analyzing more than 10M articles and text, some generated by AI and others written by humans, we developed ZeroGPT's algorithm with an accuracy rate of text detection higher than 98%. Our AI text detector tool uses DeepAnalyse™ Technology to identify the origin of your text.

Our experiments are still ongoing, and our aim is to analyze more than 1B articles and text, and to converge to an error rate lower than 1%.

===============================================

 

Let us use it to test my writing.

 

You can access GPTZeroX by navigating to it here and testing it out. To demonstrate that it is my work, I have copied and pasted the above post

 

Having said that it's hard to prove anything now for stuff like this, here is the first chapter of the King James Bible, as you can see the biblical writers used ChatGPT by your logic.

 

And here is the first chapter of The Australian Constitution, tested for ChatGPT 

I would suggest that anyone using ChatGPT be very careful about using it as no one using it for blogging knows how Google will react to its use.

 

 

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Achieving Growth and Profitability: The Importance of Measuring Sales Performance

POS SOFTWARE

Sales are the driving force behind a successful business. Measuring sales performance is critical for achieving growth and profitability. Yet, different companies need different systems to measure success. This is where POS Solutions Systems come in - with our customised sales systems tailored to each business's unique requirements.

 

Tailored Solutions for Unique Business Needs

At POS Solutions Systems, we understand that every business has specific needs. That's why we go above and beyond to provide tailored solutions that help you take control of your sales performance. Our customised sales systems provide seamless transaction processing. We also offer a range of advanced features to help you measure, track and evaluate sales performance.

Measuring Success with Advanced Metrics

Most point-of-sale (POS) systems fulfil basic transaction requirements but often fail to provide the necessary metrics to measure sales performance. Our customised solutions offer valuable insights into customer behaviour, preferences and sale patterns. By understanding your customer's needs and preferences, you can tailor your marketing and sales strategies to target your audience better. This results in increased sales and profitability.

Instilling Customer Confidence

In addition to tracking the number of sales and profit, our customised solutions also instil customer confidence by providing a seamless and secure payment process. Customers can feel confident that their payment information is safe. That they will receive accurate and timely receipts for their transactions. This level of customer confidence can help build long-term customer relationships, increasing loyalty and repeat business.

Conclusion

In conclusion, sales are the driving force behind a successful business. Measuring sales performance is crucial for achieving growth and profitability. At POS Solutions Systems, we recognise the unique needs of companies. We offer customised sales systems that provide seamless and measurable business performance. Our solutions let you take control and instil customer confidence. This helps you to build lasting relationships with your customers and achieve your business objectives.

So, if you're looking for a customised sales system that meets your business's needs, look no further than POS Solutions Systems.

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EOFY Countdown is on: Your Questions Answered

POS SOFTWARE

We need to be ready to hit the ground running as preparing a business for the End Of the Financial Year (EOFY) can be daunting.

As a minimum, you need to do the tax stuff, but while doing this, you can do the management reporting too. This can be time-consuming, but luckily much of the information required is built into your POS Software. Before you go to the accountant, it is worthwhile to go to this webinar to review what reports our Point of Sale Software can produce. This will give you a feel of what you can supply to the accountant.

Here's a checklist of reports that you will need.

Sales reports
Stock Valuation (you will need to do this after your stocktake)
Customers Outstanding
Creditors Outstanding (if you are running creditors)
Subagents Outstanding (use only if applicable)

Click here for a webinar on the End of the Financial year reporting. It discusses in detail what reports our system can produce. 

Although not required from our software, I do recommend that you do make a special End of Year Backup to store in case you need to refer to it. The 30/of June this year is Thursday.

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The End of the financial year is coming up.

POS SOFTWARE


 

For most of us, the End of the Financial Year (EOFY) is on the 30 June. For most businesses, it is a significant time. The immediate problem is super which has to be in by the 28 July. Then what we need to do is prepare by 31 October. If you do not use an accountant, you must lodge to the ATO by then but you often get some more time often with an accountant.

Here are some tips for now:

1) Make an EOFY sale. Get rid of as much stock as you can. Useless stock, if kept, generally goes into the stock figure at a wholesale value. That will increase your profit.

2) Review your debtors and creditors. Be careful here as if debts that need to be written off are not written off, it increases your profit. If creditors are written off, it increases your profits. As such most people write off the debtor now and the next financial year the creditor.

3) Review your records; are they up to scratch? If it is not, you can have with the ATO a real problem. I have seen problems with people whose POS systems has errors with the ATO.

4) Start planning a date for your stocktake. Although it is not an ATO rule, it is a valuable method of stock control. It's the best way of determining what stock has been lost to theft, spoilage or taken for personal use. I recommend that all businesses do a stocktake at least once a year. Also, without one, you may have a dispute with the ATO over your stock holding.

Good preparation is the key to stocktaking as it is a lengthy and often expensive operation. Typically a shop is looking at four (4) days of work.

We will be doing webinars to help you prepare soon for the EOFY.

"By failing to prepare, you are preparing to fail." — Benjamin Franklin.

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How to get old information fast

POS SOFTWARE

This is something you will use a lot.

Continuously we get people, e.g. bookkeepers, bankers, etc. asking us for financial figures that are years old. So what people need from their POS Software is to find out what a client or the total clients owed on a nominated date. Say they wanted to know how much your customers owed you on 3/1/2018.

This is often a problem for people with other Point of Sale Systems. They have to keep special backups. Now they have to find the appropriate ones. Then load these backups to get the figures. Once they manage to supply this information as sure as day follows night, they get asked for other figures from other dates. This can be a problem if they have not kept the backups.

Here is a better way for you to do it.

Go to the main menu> Register reports>Customers>Trial Balance.

Now select the date that was, in this case, we want 3/1/2018, so I put this date here.

Now comes out all the details.

If they pick another date for you, no worries put in those dates.

You have saved yourself a lot of work and time.

 

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How to use your data to have better stock control

POS SOFTWARE

If you look at major suppliers, you will see that they inevitably look at their sales over a few years by month. As such, they will compare sales last year with this year. So what you will get is monthly sales comparisons with this and the previous year. This is partly as most accountancy is monthly and yearly. But also because this gets over much of the problem of seasonal fluxations. In a typical year, it is expected that March last year, for example, sales, should be comparable to March this year.

What people in business generally know is what is happening now. What they are principally interested in is what will happen. So they will ask why last year in March, you sold X, and this year in March, you sold less. Any idea what is to find what is happening, because they want to know what has changed.

One common problem here is that your supplier generally knows what you ordered but not what you sold. So must have the sales figures if you wish to discuss on equal terms with the suppliers. Maybe you ordered more in March, not because of sales in March but because you sold out in February. With your POS Software, you can do this instantly.

How to do this:

Go to reports>Sales - Stock - "Stock Sales Details 24 Month Trend."

And avoid for now many of the extra details here. Let us keep it simple for this exercise.

Exclude inactive stock

Now I find it easier to work by department, so I usually select this, but you often need a supplier.

Now out pops the report above.

Now, look at the green arrows. You can see that the stock does sell about two a month and does not seem affected by the seasons. Its greatest sales are four a month, but can it justify the stock holding of 6 in red? It is about a two month supply. If the product can be ordered weekly, it is too much.

If that one is a bit tough to determine, look at the stock item, marked with a blue arrow. It sells like one every two months, but there are sixteen in stock, so we are looking at a three year supply.

What you will find, is that now having access to this information allows you to gain a clearer picture of inventory trends and seasonal patterns.

This gives you more insights into your stock sales.

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It is simple to make a top sales planogram for your shop

POS SOFTWARE

A picture is worth a thousand words.

Now, this is what we are going to have. A diagram of your shop with your sellers listed as

Blue = Good

Yellow = Moderate to bad

Red = Very bad

blank = Zero

See how it visually shows the shops sales.

 

What is a planogram?

A planogram is a drawing of your store layout marked with the characteristics you wish visually to examine, e.g. sales, shoplifting, etc.

Drawing a blank map of your shop

First, you need to pace or measure out your shop. Make a rough draft of the shop on a sheet of paper with the figures marked. Now some here would prefer to use a computer to draw a blank map, but many still choose to draw manually on a big piece of cardboard. There are pluses and minus to both. In the final analysis, it does not matter.

Now, this is a blank map for a shop, I did.

Now save that map once you are happy with it or take some photocopies, and store them away. I promise you will use them once you get used to how it works for other analyses.

Now for our purposes, we will need two blank copies of these maps.

Now we need our data.

And it is easy in our point-of-sale system to get it.

Go to Register reports.

 

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

Select a decent period. You would want here at least a couple of months.

Now select the top 100 items by quantity, and a report will come with the top sellers.

Now look through the report and draw a line. As a rule, I would mark at about the top 10. These are the ones you mark in blue on the blank map. The next 30 draw in yellow. The rest you mark in red. If you have a combination, show that on the diagram. It says something that a red seller, despite plenty of the drawcard of the blue, is doing average.

Now review your planogram.

Now once you digest this planogram, do the same procedure on a blank map for the top 100 items by profit. There should be less variation here.

Now review this planogram.

Once you get the hang of a planogram, it is about ten minutes to draw a planogram.

You will find once you get used to it that the use of planograms to plan your spaces yields many benefits. It will help you to maximise your shop sales.

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Check the gross profit of your business.

POS SOFTWARE

 

Retail Gross Profit Margin

Sometimes you look at your gross profit give by the accountant somehow it does not look right. So what you want to do is analyse the details for yourself. 

Now there are a few reports that can help you.

Here is how you can calculate your retail store gross profit margin by department.

The best report to start is 

Register report> Sales Register> Dissection Sales / Profitability for a Given Period

For the time you are concerned about, select a suitable period. 

That report will give you a lot of detail by department, including the Quantity sold and %Profit. These are often an excellent sign of something wrong. 

Once you find something you want to investigate, click on the left-hand side to see the green arrow above. Now select the shop. Then you will find the details of what is in every department. I find it very useful in real-time to go from one department to another while looking.

Happy hunting.

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Does your POS Software give you your stats in real-time?

POS SOFTWARE

Our Point Of Sale Software gives you all the stats in real-time now instantly!

What is happening?

What your staff are doing?

What your customers are buying?

How much profit are you making now?

Info like this is what modern stores need.

With our point of sale software, you can instantly find out these questions and much more. Here I will show you how to set up and use your location dashboard in your shop.

This form of analysis is Same-store sales. Every major retailer uses it that I know.

Here I will show you how our system can do it.

In a shop, each part of your shop has different value to the business. On the front, a product to justify itself needs outstanding sales. While in the back, often much lower sales results are acceptable. So what professional marketers do is set a budget for each area of the shop. Then they compare usually monthly sales in that area. Anything dramatically up and down raises flags.

So let us do it!

First, we set it up.

Look around your shop and divide the shop into locations.

Generally, a shop is divided into departments already. As this is logical I suggest using the departments.

Now check that your stock has location entered. If not, do not worry. It is easy to do.

Go to stock systems> stock editing> stock level editing.

Give all your stock a suitable location.

For each location, you adopt, calculate the area it takes up, which is simple to do by pacing it out. Now decide what weekly budget you would like for each location to have. This the end of day figures will tell you.

Now go to system maintenance> Dissection maintenance > Location

Put in the location and give it a weekly budget.

Now when you go to register reports>stock>weekly location targets.

You will get a detailed report full of comparisons for each location.

This is something you can use.

Put an end to guessing in your business and make fact-based decisions.

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See this Webinar on your End of Financial year reporting

POS SOFTWARE

Click here for a webinar on End of the Financial year reporting from your point of sale software. It discusses in detail

Sales reports
Stock Valuation (you will need to do this after your stocktake)
Customers Outstanding
Creditors Outstanding
Subagents Outstanding (use only if applicable)

Although not required from our software, I do recommend that you do make a special End of Year Backup to store in case you need to refer to it. The 30/June this year is Wednesday.

 

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How we are using data mining to help our clients?

POS SOFTWARE

What it does is give you a different perspective in your business, the computer perspective. 

Data mining is a formal process used by organisations to look into their information. Using it they can get helpful information about what is happening. They do this by using software to look for patterns in their data. Using it, businesses have learnt more about their customers. They can use it to develop more effective marketing strategies. For example, to increase sales or decrease costs. 

It is not a manual process but is computer-generated, which is both a blessing and a curse. Doing it depends on your POS system having effective data collection and processing. Something, as far as I know, we are the only ones in our market space that have a computer system that can do that? We then often add extra information like the local weather over the period, COVID lockdowns, economic data from the government surveys, etc. Then we use a specialised data mining software package. This brings these figures together and analyses the statistics. 

Generally, this takes over two weeks to do it. This is because it often fails, and we have to redo it. It also often gives misleading results. Please do not believe that its results are always right. It usually takes a few attempts to narrow it down on the information where it can help. The results are sometimes interesting but not useable. Sometimes there is little you can do even if you know a pattern. 

Also, when you do it, you get results like above. It is the sort of stuff that even experts find hard to understand. 

So it has in the past proved quite valuable. It often identifying shopping trends by understanding the purchasing behaviour of your existing customer. It can often increase sales and customer loyalty as are predicting the market. I also find it is good at finding cross-selling opportunities in our clients' shops. This often allows our clients to increase the efficiency of their business.

 

If you want to give it a try, let me know. We do offer it to our clients *FREE*.

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A quick first-level approximation to determine your shrinkage

POS SOFTWARE

 

A first-level approximation of determining your shrinkage

You would be getting a theoretical margin in a perfect world. In the real world, goods get stolen, lost, damaged, mispriced, discounted, etc.

Checking your theoretical margin

It is often easy to get as your supplier will usually provide you with this figure. The first point to do is check this 

Go to register resports> Stock > "Quantity On Hand and Price Check."

The report will show you your margins. 

Actual results.

Here is how we get the actual result.

(Stock sold) = (Sales) x (1-theoretical margin%/100). 

Now for each department, 
(Perpetual stock) =(opening stock)-(closing stock)+ (purchases)

This is a first-level approximation, so we assume that your stock ordering is good. Thus we make (opening stock)=(closing stock) and so use the following formula.

The (Perpetual stock) =(Purchases)

What you want to compare is the difference.

(Difference percentage) = (1-((Stock sold)/(Perpetual stock))x100%

As a rule, about .5% is a typical figure.

If it is much more than that, it is considered severe. 

Plugin the figures from your totals report and purchases for the last twelve months. Now for each department calculate the (Difference percentage)

It should take you less than 10 minutes to do once you get the hang of it.

This will quickly tell you if there is a problem and, if so, the extent and where the problem is now. 

 

 

 

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Make a marginal goal of 1% improvement per year

POS SOFTWARE

Before you think it is of little help 1%, let me show you have much of even improvement per year this can make.

Going to the ATO benchmark study they give what I consider the best benchmarking figures for businesses in Australia today free.

Now I picked a hairdresser shop just because it is something most of us can get our head around. Then picked the average for everything. I put it into an excel spreadsheet and then made a new column for 1% improvement.

Bottom line: I got a 25% increase in profit. That is pretty impressive.

How do we do this 1% improvement?

Well, there is an excellent quote in management theory. I learnt that "what gets measured is what gets improved." What we need to do is measure over time. This will tell you where you are, and how you got there. Then how you go compared to others. Then see where you are going if nothing changes. 

And with our POS Software, you have the tool.

Look through our reports for ones that you like, here are some key metrics, I suggest you start with.  

Total Profit
Most would say this is the most critical metric in a shop today. It is the primary method used by people to determine their business value.

Number of Customers (Customer Traffic)
The number of customers in your shop is the most straightforward metric for your retail business. 

Average profit by the sale  
This is always an exciting measure in a shop. Are people that buy more or not?  

Basket size
This shows how productive you are in the shop.

Often these are linked. For example, if you see profit per sale is down by basket size is up. Well, you are pushing the wrong products, or maybe you are overdoing discounts. 

Try giving your business a standard to measure itself for continual improvement.

 

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How to find your stock that are on incorrect sale?

POS SOFTWARE

One trick often used by bargain hunters is looking for items that were on sale years ago. Sometimes the old codes still work, and so they can pick up a bargain. Occasionally in bargain sites, someone will pop up noting such a deal. That is how I got a good price on some software. 

The same trick can occur in your shop. You may have items that were on sale long ago in your system. This is because someone has incorrectly not taken out the deal. So these old prices are still active despite the sale being over long ago. This is a big problem if you import from a supplier their prices directly. 

It was often not picked up as you had no stock, but this stock if it creeps back into your shop and you have an old sale price.  

You can use many reports to find these items, but we have a special report to combat this. It is specially designed to find such items. 

Go to register reports>Stock>Stock on Sale between a given period

Put in the relevant detail and see what you have.

I suggest that you do run it now. Rarely, it does not find anything.

 

 

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See your shop location sales dashboard by budget, area, last year, etc

POS SOFTWARE

I will show you how to set up and use your location dashboard in your shop.

This form of analysis is called Same-store sales and is frequently used by many retailers. I will show you how our system can do it. 

A bit of background first. Most consider in a shop different parts of your shop have different value to the business. In places in the front, a product to justify itself in the front needs good sales. While in the back, often much lower sales results are acceptable. What professional marketers do is set a budget for each area of the shop. Then what they do is compare usually monthly sales in that area. This they displayed on a dashboard. Anything significantly different raises flags.

Let us start, so first, we need to set up.

Look around your shop and divide the shop into locations. Generally, a shop is divided into departments already, so this is not hard so use departments. 

Now check that your stock has location entered. If not, then go to stock systems> stock editing> stock level editing. 

Give all your stock a suitable location. Although this will not take you a lot of time, it may take a while for the computer to process. Nothing we can do about this as we need to get locations going.

For each location you adopt, calculate the area it takes up, which is simple to do by pacing it out. Now decide what weekly budget you would like for each location to have. Generally, your till rolls at the end of the day will tell you. You need both figures area and budget to get this to work.

Now go to system maintenance> Dissection maintenance > Location

Put in the location and give it a weekly budget.

Now go to register reports>stock>weekly location targets.

Put in an appropriate date and outcomes a very detailed report, full of comparisons for each location. 

Now on the first few shots, you need to fine-tune it somewhat the figures. This is expected but once bedded down, it will work well. 

You will get a lot of relevant information on your shop from this report and it will be something you can use.

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How to use Gross Margin Return on Inventory (GMROI) in your shop

POS SOFTWARE

As I stated, GRMOI is one of the foundations of modern inventory management today. This is why we have supplied our clients with this powerful tool. 

Hopefully, now, you have been trying out Gross Margin Return on Inventory (GMROI) in your shop. If not, look at my post a few days ago and only then come back to this post.

What GMROI incorporates in one figure, stock turns and profit. It allows you to focus on margins and turnovers.

The significant advantage of GMROI 

1) It is consistent and widely used. Other systems, such as Direct Product Analysis (DDP), need you to make assumptions. They take much longer to work out. Different people using it come out with other figures. So their analysis will give various figures depending on who runs the report.  I will show you DDP in our software in another post soon because it is also excellent. 

With GMROI, everyone is looking at the same figure.

2) It is quick and easy to use. All you have to do is run a report. The computer can do the calculation.

GMROI is simple.

3) It allows you to compare widely different products quickly.  

Using it, you can compare every item in the shop in seconds.

4) Overstocking is highlighted.

This is one of its best functions so it will cut your stock levels.

Let us discuss the problems.

1) A minor product can have a terrific GMROI, but its effect on the shop can be zero. For example, if a product that turns over a lot has a decent margin, it is pretty useless if it made you a profit of $2/week. It would not even pay the handling and rent that it takes up.

So you are not going to get out of using our profit reports, which need to be considered.

2) If you understock, you can often drive the stock turns up, so giving you higher GMROI. Yet that will cost you sales.

High GMROI is not always good.

3) It does not consider other costs, e.g. handling and shipping costs or suppliers terms.  

4) It does not take into account that often you need a range of products. For example, people may come to your shop because they know you have an extensive range. If all you have is one title or brand, they may decide to go elsewhere else. After all, they can buy in a supermarket which also has a common brand. 

Range often sells.

5) It may show you problems but not what you can do to fix the problem. There may be only so many you can sell. There may be good reasons why your low margin items are low: price-sensitive, set by suppliers, etc.

Often its conclusions are not actionable. 

As a rule, I recommend looking at the extremes of the GMROI, both the high and low results, first.  Once used to GMROI, you will find it an indispensable tool.

Enjoy and let me know how it goes.

Comments

Thanks for sharing this blog. Restaurant Management can be made easy by simply installing your restaurant software. Handling various aspects of your restaurant like the front desk, kitchen, menu updates, and table allocations can be done easily.

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How examining your GMROI Leads To better shop sales?

POS SOFTWARE

A few days, I showed you could improve your shop sales by examining the item (granular) level the quantity, profit and sales.  It produced a lot of comments. These are important, but they are not considered the most crucial measurement in modern retail.  

The most crucial measure today is the Gross Margin Return on Investment (GMROI)

I will show you here what it is and how to get it immediately from your system.

Using GMROI you can get shop profit up, often dramatically.

What it measures is for every dollar invested in an item by the retailer, what profit did the retailer get back. It combines sales,  margins, stock turns and investment theory into one number.

The calculation is.

GMROI = ($Gross Sales -$Cost)/($Ave inventory at cost)

Example 

-Consider an item A with an annual sales of $1000 at a Gross Margin (or Gross Profit) of 30%

Gross Margin $$ = $300.00

Say my stock holding on an average over the year was $200

My GMROI = $300.00 / $200.00 = $1.5

What you get with this product is $1.50 back for every $1.00 you invested in that item.

- Now say we have an item B with an annual sales of $2000 at a Gross Margin (or Gross Profit) of 25%

Gross Margin $$ = $500.00

Say my stock holding on an average over the year again was $200

My GMROI = $500.00 / $200.00 = $2.5, so for every dollar, I put into this item, I get back $2.5, which is much better.

Based on this, you should push item B more even though its margins are lower. This is because it has a higher stock turn. So in theory what want items B.

Unfortunately this is an impossible calculation for a person to do for all the items in most shops manually. But it is no problem for a computer.

So what we have made is a training video to show you how to get these figures.

Please get a feel of what your items GMROI are and I will in a couple of days show you some of the benefits and limitations of it. 

Enjoy

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How to monitor your stock turns

POS SOFTWARE

Stock turns vital because most of our money is in inventory. If it is not selling well, the funds will not be available to pay employees, suppliers, banks, etc. So look at this report.

It is easy to get your report. It takes a second.

Go to Main Menu > Cash Register > Register Reports > expand Stock > select/double the click the report “Show Stock Turn by Dissection and Item.

Now select the appropriate options and then click the View Report button. I suggest running it for the past last five (5) years, the previous year, and the previous three (3) months and compare the figures. This gives you a long, medium, and short-range. See how different departments are going.

Now, you can see trends.

Like everything, you need to review these figures with intelligence. Too high figures can mean you are understocked. 
Too low often means you are overstocked.

Have a shot and see how you go.

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