Don’t Forget These Year End Reports
While the holiday season is in full swing, another fiscal year is quickly coming to an end. It’s that time of year, again, to close out your books, so you can have a fresh start to the new year.
Of course, you’ve been keeping track of the daily, monthly, and quarterly inventory and sales reports. These offer great insights into your daily productivity, but end of year reports can tell you a more complete story of how well you managed the seasonal trends and lulls during sales cycles. Some end of year reports can add to the ongoing narrative of your company.
Your Finances and Your Market
The fiscal health of your company is easily found on your profit and loss statement (P&L). It’s there every year when you file your taxes and it’s probably the easiest report to understand. But digging deeper into the meaning of those numbers can show you more about your customers and employee productivity. Let’s take a look at four very important POS reports that can help you better understand your P&L.
1. Store Comparisons
If you have multiple stores, then you know that each one has its own personality. So, a side-by-side comparison of your stores can be tricky to do and difficult to understand. The best approach is to perform a ratio analysis on net, pre-tax profit. You can also compare the top selling products for each store and how different the market demand is between them.
2. Itemized Profit Analysis
When looking at your top sellers, your POS should break down the itemized profit for each product. Itemized reports break down the costs associated with a particular product and what they were sold for. Popular items may fly off the shelves, but they often don’t have the same returns as the more profitable ones. Using this report, you can adjust your pricing and negotiate better terms with your vendors.
3. Inventory Turnover
This is a combination of reports that provide great insight into how well you managed your costs and the effectiveness of your sales efforts. All this from a ratio that gives you the amount of times your entire inventory was turned over during the year. High turnover rates indicate strong market demand. Low turnover rates signal a need for changes with inventory management.
Most POS systems keep track of your employees’ activity. The information you gather from employee reports can determine their value to your business. Any deficiencies in sales or hours worked, such as shift reports, may indicate a need for more training or your attention. Just keep in mind that employee value isn’t always dictated by sales. Some of your best employees may get pulled away from their sales duties to handle other important business matters.
Great Decisions for Next Year
We all know that it’s the busiest time of year for any retailer, but that’s no excuse to not dive deeper into your P&L statement. After reviewing these reports, you will have a better idea about your business and how efficient and profitable it is. They empower you to make the best decisions that will overcome any obstacles to growth in the coming year. And, remember, you also need see where you’re being successful and take pride in your accomplishments, because those matter just as much. Cheers to another great year!