My previous post on late-payment fees brought up a few inquiries. 

What is now the debt situation now in the business compared to last year?

Well, the quickest way is to go into register reports > customers trial balance.

Put in a date, you can pick any date you want, like I put a date most than three (3) years ago. 

Use the date yesterday a year ago. Use the age periods as current, 30, 60, and 90 days. 

Now do the same report as of yesterday's date.

Now you can see how you are going!

Often you want to figure out what is going on, even if you are sure it's right. Sometimes, you need to determine that it is correct.

 So if you are looking to reconcile your EFTPOS/credit payment to the banks, if so, what you find is you are reconciling your daily sales, yet many of the bank fees are monthly figures. As such, the totals will not match.

Well, here is a report that can help you.

You will find it here marked in red.

Once there you can get a report in excel that you can reconcile.

See how you go, everyone, who has done it has told me that they have found something interesting.

Now you have done your stocktake.

It is a simple calculation for you or your accountant to do to determine your stock shrinkage. 

(stock shrinkage)= (opening stock) - (closing stock)+(purchases) -(Total sales at cost price) 

Generally what we do now calculate it as a percentage of sales, so it becomes = (stock shrinkage)/(Total sales) x 100% 

Although often people use, shrinkage by stock value which we do in two steps.

(Average stock holding) =((opening stock) - (closing stock))/2 

(shrinkage by stock value)= (stock shrinkage)/(Average stock holding) x 100% 

So now you know your stock shrinkage, so you have an idea of how big a problem you do have. 

As a punt, I would say that it will be about 1.4%, but it does vary a lot.

One client of ours reported that it was less than 0.1%, which is the best figure I have ever seen. I have also seen a shop which a receiver told me it was 6%, which is no wonder a receiver was there. 

I do suggest that you do these calculations because if you do not know it, what can you do to fix it? Some significant reasons would be.

1) Customer theft - The five-finger discount

2) Damage - We had one furniture shop that was recording huge numbers of damaged goods somewhere between receiving and customer delivery.

Goods that suffer a significant damage problem should be moved to a safer place. I know a shop that after calculating their damage rate stopped handling glass products.

3) Supplier fraud - Which is all too often, although many suppliers claim they are accidents, I am not so sure. The result though is that a supplier bills you for goods shipped, but for some reason, you did not get.

4) Staff theft - I have seen retailers in tears when they discovered what a valued staff member has done. In my experience, this is zero or 100% of the problem. If you have some virtual products, e.g. lotto or telco this can be a measure here. As a rule, experts say that it accounts for half of all retail shrinkage which means that its the most important item. 

5) Administrative errors - are pricing mistakes and sloppy bookkeeping.

For the others as a first guesstimate, most people assume that each of the above factors is equal.

In the retail world, shrinkage is a part of life but, does not mean you have to give away so much. 

Depending on your margins, a 1.4% stock shrinkage could amount to a 20% loss in profits. 

Due to COVID-19, we all do a lot more work from home. To many, it is a new normal.

Now there are some of the expenses of working from home can be claimed too. 

Some valid deductions would be on your home computer. You can look at such as its desk, your computer chair, electricity, carpets, lighting, etc.

You can also often claim a share of the rent for the area of your office from which you conduct business.

I would suggest that you discuss this with your accountant.

Review your debts and write off the bad debts in your computer system. What most people do is write them off in the official books. Then put them into a voodoo account in case they do actually by some miracle get paid for them.

Write off any trading stock that is damaged or obsolete.

Revalue your damaged stock to the current value of the stock.

Keep in mind what your accountant will want is your stock valuation by

*Cost prices 
*The Market selling value 
*Replacement value 

If your books are set up on a CASH system, you need to pay off outstanding debts to get the credit for them in this financial year.

To help you we will be doing webinars on financial and management reports very soon.

The end of the financial year is coming so we all need to finalise our tax paperwork and accounting. 

Here are some steps that you will need to do from your point of sale software. 

* Review your bad debts and determine what you are going to do about them. 

* Remember you are going to have extra bills like insurance appearing, so you need to budget early for July so look at the creditors listing to mark what is not going to be paid soon.

* Review your stock. Consider writing off old stock. Why not start an EOY sale now?

* Take an end of year backup of your information and file it away somewhere. Remember you will need to keep this for seven years at least after you lodge your return. Please do not use any EL Cheapo USB sticks

* Contact your accountant and to get a list of documents that they need. I would suggest as a least they will require you to prepare the following documents for them.

Sales reports
Stock Valuation 
Customers Outstanding 
Creditors Outstanding 
Subagents Outstanding

I usually say that this it is an excellent time to review the past year, to see what’s worked and what hasn’t, then to plan for next year. But, 2020 has been such a challenging time, starting with the drought, bushfires and COVID-19 who knows what to expect now but so far it looks good since we have opened up, 
 

This came up yesterday, a customer wanted an invoice from some items he purchased a few days ago on a statement.

Firstly our understanding is that any customer has the right to ask you for an itemised bill or account for up to 30 days after receiving the statement and must be provided free of charge within seven days of the request.

The main reason is my experience people do request this, is because some of the items have GST and some do not. 

It is actually very easy to do in our system as we have automated the operators and you can print in seconds.

I would suggest here using the A4 receipt, in the cash register look for the item, click on the "Receipts" button, find the receipt you would like to print, then select the "A4 Print" button:

Out will come an A4 receipt:

MYOB software is the most popular accountancy system in our market space, and our point of sale software integrates into MYOB Essentials and AccountRight. 

This is available free to our clients. 

Using this integration will save an MYOB user saves our clients time as it removes manual data entry; this reduces errors and is quicker in transferring the information.

Having worked extensively with MYOB for many years and is one of the first software companies to have done the integration, we have gained much respect for this accountancy program. 

One function they have that I like is the "smart bills", where a person can drop an image of an invoice into MYOB, and it can often read all the information even if the invoice does not have an ABN number. This function is not available in many other accounting programs.

If you are interested check out the automatic MYOB Data Transfer section in your POS software.

Once set up, all you need to do is select the dates to go.

By doing this both your point of sale software and MYOB will work together to bring businesses like yours, an integrated point of sale and accounting platform to helps you better manage your business.

If you deal with large organisations, what you will notice is that currently, their payment is now all over the place.

What has been happening is that their payable processing cycle works by the accounts department getting a bill from you. This bill is then passed by them to the relevant department to match your quote, review that your work been done and to approve the payment. Once they get that approval, then they schedule a payment to you. As it is this schedule can take a while.

However, what been happening now is that in this current crisis, this procedure is not working, mainly as some key people are not at work. It only takes now one guy and suddenly this cycle halts. The accounts department will not pay until the cycle is done, and they have approval. I also suspect that everyone is looking for an excuse to delay payment anyway.

We are now suffering from big organisations taking even longer than before to pay.

If you have a solution to this problem, please share as we all need an answer.

One of my clients is attaching this note to his bills.

"Please take care of this invoice and clear the payment because we have also the cash flow issue and also can't get jobkeeper due to Government policies. So we have to pay salaries to our staff and we need the cash to clear the salaries.

Hope you understand and clear the payment soonest." 

Debt is everywhere, it affects almost every human organisation, in my lifetime, I have seen the greatest empire in the world, the USSR and most important people like the Shah of Iran collapse from it. 

They did not have money to pay for people, and because of the debt no-one would lend them more money, soon their worlds collapsed.

Debt is part of modern life. If you sit back and wait, the worst might just happen. Here is a quick way of determining just how much debt your business is owed.

So go to main menu.

Register reports

Now usually, I would recommend using Trial Balance(excel), but for this example, I just wish it to be simple, so I selected Trial Balance.

Now select today's date, although just to show you the power of our system, I picked a random date many years ago.

I also selected by order by Surname as I think it makes it easier to find, and I ignored the "More Criteria" because I do want to keep it simple, but I urge you to experiment later with these options.

Now out pops among other details a page like this one below Although for security reasons, I blanked out the names, you can see all the relevant information is here.

A total will be printed at the end.

This gives you a quick look to understand your situation.

What interesting exercise is to go back in and select today's date last year and see how your debt situation is shaping up. If it is dramatically going up, I would suggest that you take action rather then praying for the best.

Invoicing is now easier in our cash register in the new version as we have automated more the operators' work easier. Using it you can print the invoice in seconds, with minimum steps, you do not need a keystroke as it can use a touch screen but if you like you can use the keyboard shortcut keys.

This will save you time and effort, mainly if you are dealing with busy businesses and customers.

If your customers want an A4 receipt which is often true of business customers it is elementary to do, click on the "Receipts" button, find the receipt you would like to print, then select the "A4 Print" button:

Out will come an A4 receipt:

What we do suggest is that invoicing immediately and getting the customer email address to email these invoices immediately too while it is still fresh in everyone mind.  The quicker they get it the quicker you get paid.

Besides being a double hit on the bill, this email address can then be used for loyalty marketing purposes so serving another function.

Balancing your tills is essential to any retail business. It should be part of your daily routine, but now, suddenly, you sense something is not right, and you want to balance the till. This is where we use X-offs,

What we strongly suggest is that every cashier has their cash drawer. There is no problem as our system allows many tills to work on one computer,

The staff member gets the float at the start of each shift. This can be easily balanced at any time.

Go to the End of Day section in the cash register and select X-offs

With this summary of sales, you will get extra information that may help with your investigations, such as the net sales, voids, paid ins/outs, taxes, the breakdown of various payment methods and more.

On the end-of-day page, choose the X-off option below the EOD option marked in green. Select the time the staff member assigned to the register started and the current time. You now run the report.

Now, it’s time to count your cash.

When balancing the lookout for overages and shortages, an overage is not to be ignored as it can mean people are not recording all their sales. If so, why are they not recording all the transactions?

One point that can in retail save you time is automation that saves you time.

Consider that you save a lot of time of manual bookkeeping every year by integrating your POS system into your accounting system.

Our software has inbuilt a powerful GST auditing tool inbuilt which gives you a fast and accurate audit of your GST.

Now what sometimes happens is that people have some queries about their GST and they want to check in their accounting programs that it is giving the same result as their point of sale software.

This will give you a detailed report which including this.

Now, this you can check with your accounting program.

If the two are not the same, then what you need to do is track down the incorrect figure. This can be extremely difficult as sometimes, it is not actually wrong in either system. So we need to audit.

The problem here is that three (3) is often a big job to audit in practice. So what we do is try to break it down to a short period, generally a day and audit just that day. This process can take time.

So what we suggest is to run this report for one month, then the accounting program for the same month. If the problem is not noticeable in that month, we go to the next month and run both again. It does not take long in our system as its Microsoft SQL which sets the standard for speed.

If it is noticeable, then we look at the first half of the month and check that with the accounting program and so keep going making the period smaller and smaller until we get to a day where the problem is noticeable. Then I check the transactions on that day.

It will take you using this method about seven (7) attempts to get to that day. Once you get into the rhythm, it is relatively quick.

Sometimes though it can be tough to find, I remember once, I could not figure it out why a $2000 transaction was not there. It turned out that it was an insurance claim that had wrongly been put down in the accounting software as a sale. Doing this check, as a result, saved the retailer $200. 

There were problems this morning with MYOB, with people trying to log in, when we tested it then there was a problem however according to MYOB the problems have been fixed.

Also, I have tested it now and it seems all fine.

Every year we survey our clients to see what they think of our performance

While we do this, we ask a few questions about what our clients are doing and what they want to do with the software.  So we asked them about what accounting systems they use? 

The first point to notice is that about 95% of retailers here are running some accounting program, which is effectively everyone. Interestingly although there are many accounting software packages, most retailers in our market space use one of four systems.

In my experience, as Australian standards in accounting software has not changed much in 30 years, all these programs can do the same job. All are good, and the difference tends to be, I think user preference, requirements and ease of use.

Running through them in turn.

MYOB historically and now is by the far the most popular system by retailers. Recently as they introduced their cloud version, you can see its popularity has continued to grow in our chart. I find it too rigid in use for my taste but many would consider this a positive advantage. 

Quickbooks and Reckon, a few years ago had a terrific deal going, over half price so we told our clients and many of my clients jumped on this deal, obviously, Quickbooks has lost much market share as the deal died out but as their cloud version comes out they are slowly building up their market share. This one is my personal favourite but I do accept that this flexibility comes at a price that a user does require more training than other software packages.   

Cashflow manager is an extremely solid and popular accounting program, I am not surprised there is a growing interest in the product. Its simplicity is I am sure part of its appeal.

Xero is expensive but very good. Now it is clearly facing pressure from other vendors now that can now do cloud as well so my clients are moving away from it. 

Finally, interest in what is many other smaller accounting software packages are dropping off. I think that this might be the effect of the growing interest in cloud computing. The other problem is that if you adopt a system with few users, it can be hard to get help if you require help.