One of the key benefits of using CounterBooks is its ability to integrate a number of (otherwise disparate) systems that the retailer already has access to.
When CounterBooks was first conceived and developed, it broke new ground by being the first major UK-based accounting product to be available over the internet. This brought immediate benefit to our customers in that they became responsible for just the usage of the system, and did not have to worry about managing the installation and support of this key part of their business. Being able to access their data from anywhere, anytime, was merely an additional bonus to many early adopters.
Several years after the initial launch, we introduced the ability for CounterBooks to import sales and invoice data generated by the existing Point of Sale and Back Office systems already in use at many of our customer’s retail sites. POS systems that we have developed interfaces for include Wayne Nucleus, Torex Prism, Huth ITAS Vision, Background 2 Flow and Wincor. This import process now accounts for approximately 80% of all data input into CounterBooks and not only saves our customer many valuable hours of book-keeping time, but improves data accuracy and reporting as well.
We have recently rolled out a further enhancement to this import process that allows us to autonomously collect data on the customer’s behalf and upload it into CounterBooks directly. The retailer then simply has the responsibility to review and accept the uploaded data before it is saved into their accounts.
We have been able to do this because of recent developments in Cloud-Based ePOS systems that, like CounterBooks, are based on a central data store which is accessed over the internet by the retailer and are designed from the outset with the ability to exchange data with other systems. These upgrades have also given us the ability to import data from the retailer’s biggest suppliers in a similarly centralised manner. Providers that we currently work with can be seen here, and we are adding further names to this list on a continual basis.
The upshot of this is that we have enabled the retailer to become part of and to make use of an ecosystem that they may not have realised existed previously. In fact the process is often so transparent that many of them no doubt remain unaware of its existence even once part of it! Hopefully, though, all of our customers quickly appreciate the benefits we are bringing them in terms of reduced overheads and staffing costs, improved accounting practices and a better understanding of their business’ financial position.
KPIs (Key Performance Indicators) are a type of performance measure.They help you to evaluate how well your retail company is doing within a particular activity. You need to have a good understanding of what’s important to your retail company in order to choose the right set of KPIs. However there are some key KPIs that may be useful in your retail organisation:
Sales per Unit Area
Sales per unit area is a standard measure of success within retail stores. It’s often expressed in square feet but increasingly it is now being defined in square meters. It can measure your retail stores efficiency in generating revenue with the amount of space available to your retail store. The higher the sales per unit area the better your retail store is doing at positioning products and marketing. Apple for example has twice the sales per square foot of any other US retailer. It also allows you to benchmark your retail store against your competitors. Such information can often be obtained from trade unions, annual reports or Companies House. Remember, factors such as location, layout and amount of inventory can have an effect on your retail stores results.
How to work out sales per unit area:
It’s a simple equation which is often expressed as follows:
£ Sales per period e.g. £200,000 = £100 per sq ft
Sales floor area 2000 sq ft
It’s a very useful comparison tool, particularly if you have a number of different stores of varying size as it allows you to compare performance.
Sales per Customer/Transactions
You can work out the actual sales for a certain period such (month or year) and divide it by the number of customers/transactions.
Total sales = Sales per transaction
No. of transactions
Sales per employee
This is helpful in comparing labour productivity between different retail stores. It can also help in determining the number of sales your retail store will need to make if you take on new staff. When working out sales per employee you will need to account for anyone who is working part-time. So convert their hours to the equivalent full-time hours.
You can calculate the sales per employee as follows:
Net Sales = Sales per employee
No. of employees
Sales per hour tells you the speed at with each individual salesperson is selling a product to a customer within your retail store. It’s a great comparison tool to see how well each salesperson is performing in comparison to everyone else.
It’s easy to calculate:
Actual sales = Sales per hour
What is a Profit and Loss Statement?
A Profit and Loss (P&L) statement summarises the financial performance of a business over time. It is a useful tool to assess how well your retail business is doing. Essentially you are calculating your profit or loss within a certain period.
Key elements are:
Sales – The amount of money you have made from selling your product.
Cost of Sales – The cost of making the product or providing the service before anything else is deducted.
Gross Profit – The sales less the cost of sales.
Overheads – Operating costs of the business such as travel, advertising, phone etc.
Net profit – Net profit is what you have left over after everything has been deducted. This includes overheads and taxes.
Example Profit and Loss Statement
|Cost of Sales||300,000|
|Net Profit (before tax)||184,730|
It is important to assess your retail performance at regular intervals however the detail required will vary between retail companies.
What are the benefits to your retail business?
– Compare your predicted performance with your actual performance.
– Determine growth potential within retail.
– Assess your retail business performance with retail industry norms.
What else do think is important for a retailer when reviewing their Profit and Loss statement? Please add your comments below.
Contactless payment terminals might be rolling out into the retail trade but the vast majority of shoppers remain “clueless” about the technology, a new consumer survey has found, according to today’s Independent Retail News.
Barclays and Barclaycard have installed 52,000 contactless terminals in the UK and it is estimated around a quarter of debit and credit cards in circulation now have contactless functionality.
Richard Armstrong, head of UK payment acceptances at Barclaycard, said: “The range of retailers offering contactless payments grew significantly in 2010, but this is still only the beginning. Retailers realise that with contactless technology they can boost customer satisfaction by reducing queues and the need for consumers to search for the correct change.”
During 2010 more than 1.7 million contactless transactions under £15 each were processed and retailers coming on board with the technology include the Co-op and, more recently, discount retailer Wilkinson, which is now trialling contactless terminals in 25 of its stores.
Dan Wass, current accounts director at Barclays, said: “A growing number of card issuers and banks are waking up to the benefits of contactless payment technology and we expect there will be significant growth in the number of transactions in 2011.”
Consumer research by The Logic Group, the secure card payments specialist, reveals high levels of consumer ignorance about contactless payments, with almost 40% believing they are either payments made online or “where no human contact is involved”, such as ticket machines.
But, the Logic Group said, there was a “huge opportunity” for contactless payments as 80% of the 22 billion cash payments made last year were for purchases under £15.
“However, there is clearly some work to be done to educate consumers, not only to the benefits of contactless but also to what a contactless payment actually is,” said marketing director Mark Kusionowicz.
Over the past several months, we have met with many high street and sizeable retailers which operate multi site retail operations, this ranges from forecourt, high street, general retail, hospitality, and others – all had one thing in common, the poor efficiency of their accounting operation.
In today’s hyper competitive environment it is imperative that retail operations are utilising the generally accepted best practices and systems/software in their back office and accounting function. Below are the three worst enemies to progress (and hence profit!) in the retail environment.
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