Point of Sale Analytics: 7 Must Haves
Why Do I Need Good Point of Sale Analytics?
Analytics. Statistics. Metrics. Whatever word you choose to describe them, good reporting tools are the lifeblood of any great point of sale and inventory system. Point of sale analytics provide the up-to-date and accurate information that you need to make critical decisions about your company.
- What should I buy this week?
- Who are my best customers?
- How much revenue am I bringing in each week?
- How much money do I have tied up in inventory?
- Which of my employees are selling the most?
Without this information, you are working with a blindfold on. And you are making decisions that affect the performance and growth of your company without anything to back them up. This is not a smart way to run a business.
The best point of sale software provides you with all of the reporting tools necessary to run your company. You should to be able to access the information easily, and be able to read and understand the reports quickly. Some point of sale systems produce overly-complicated reports with fancy layouts and difficult to read fonts. This is a mistake. You are a busy store owner and don’t have time for that. Point of sale analytics should be simple reports and not require a special decoder ring to decipher.
So What Are the Point of Sale Analytics That Are Absolutely Necessary For My System?
1. Inventory Valuation
Low cash flow is a major problem with many businesses. You might be making a profit, but if there’s too much money tied up in unsold inventory (and other expenses), you could find yourself without enough cash to run your business. The Inventory Valuation report provides an up-to-date rundown of the money you are spending on unsold inventory–in each department. With this information, you can adjust your buying decisions accordingly and over time, improve your cash situation. If you don’t have that problem and the cash is just rolling in, use this report to make sure things stay that way.
2. Employee Ranking
Managing your employees is one of the toughest jobs you have. If you’re running a small to mid-sized company, you just can’t afford to make bad decisions regarding your staff. That’s why an employee ranking report is critical for any point of sale system. You need to know who is performing well and who isn’t, so that you can make decisions that are best for the financial stability of your business.
3. Customer Report
It’s not obvious to everyone that it costs more to bring in new customers than it does to keep the ones you have. Everyone wants to grow their business, but to do that you have to let your existing customers know that you appreciate their time and loyalty. A customer report is a mainstay of a system with great point of sale analytics. Because it shows who your best customers are in terms of sales dollars, you can focus on those that really count. Send them a discount or tell them about upcoming sale or special offer.
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4. Cost of Goods Sold
Great systems give you the ability to get a quick view of how your company is doing at any given time. And a Cost of Goods Report is how it’s done. By showing sales revenue, the cost of items you’ve sold, and your profit, you’ll see how all of your stores are doing. Just remember that being profitable doesn’t mean that everything is okay with your cash flow.
5. Dead Stock
Items that are not selling are affecting your bottom line. You paid for these products, but they’re not giving you anything in return by sitting in a back room or on your store shelves. The best point of sale systems will help you identify these items so that you can won’t make the mistake of ordering them again. Or at least not ordering them in that high of a quantity. Maybe the problem is that they are just positioned in a bad spot in your store where your customers don’t see them. Whatever the case, having this information will help you identify problem inventory so that you can make the appropriate decisions and optimize what you have onhand.
6. Top Selling Items
Knowing the items that are selling is just as important as knowing the items that are not selling. If an item is flying off your shelves, chances are that you’re going to want to buy more of it. And you might even showcase it in a certain section of your store or offer a special promotion to maximize its visibility. But if you don’t know what your best selling items are, how are you going to do this? Systems with great point of sale analytics provide a Top Selling Items Report, which lists the items that have sold the most over a specified date range.
7. What to Buy
Determining which items to buy and how many is something that is difficult for every business. And no point of sale system will do all of the work for you. But it can make educated suggestions based on information that is already in the system. By looking at sales history, along with current stock quantities versus optimum stock quantities, the best point of sale software will produce a What to Buy report listing items that you should consider including on your next purchase order. Even better point of sale systems will create purchase order with the items with one click.
Point of sale analytics are key to running a successful and growing business. Making decisions with no rationale or supporting information is just bad business. Instead, you must make smart decisions based on on accurate and real-time data.