Running a successful business isn’t easy. It involves a lot of hard work, planning, strategic decision-making and more importantly, data analysis. Successful business owners know how crucial it is to find the right balance between focusing on day to day operations to collecting data and undertaking analysis. Your point-of-sale system is far more than just a glorified cash register and it should be looked at as a treasure chest that holds many secrets to achieving rapid business growth with POS reports.
The current state of POS data
With each transaction, your POS is recording multiple sets of information that are extremely valuable. POS data often sits there, overlooked, when in fact it is the key to mapping the DNA of the business. Unfortunately, many POS systems only offer “premium” plans with very limited reporting functionalities and access to data is ignored or simply not possible.
Through data and trend analysis, merchants can gain insights into patterns that could be affecting the performance of the business or opportunities to increase profits. This is where bookkeepers and accountants can assist and add value. When they have access to data they can help you to make sense of it and act on it.
Unfortunately, planning and implementing data collection, manipulation and processing can be a daunting, time consuming task. A professional approach will provide the ability to efficiently gather and consume integrated data in order to present opportunities for proactive decision-making. It can be key in allowing businesses to develop a competitive advantage.
Why POS reports are crucial
Why is this so crucial? POS reports can provide a lot of information that can help retailers and hospitality business owners record statistics, analyse sales, keep track of inventory, budget for future purchases and evaluate the performance of employees. In general POS reporting system can show the overall health of the business and how it is performing. Knowing what works best and what doesn’t can really help any company in the long run.
The information provided in POS reports shows business owners what to avoid in the future or things to pay attention to – for example: items that aren’t selling well, damaged inventory or which employees are underperforming. POS reports allow them to make more informed business decisions – after making changes, they can re-evaluate the impact of these decisions to ensure that they are valuable and beneficial. Also, these decisions don’t always have to be large in size or scale – oftentimes they are small, every day things that can add up to be very positive for the business in the long run.
Sales are a key element of any business. A POS sales report should let accountants know how to help business owners see which services and/or products are bringing in the most benefits and profit. They can also identify seasonal trends; help figure out which days of the year bring the most sales and which items aren’t successfully selling.
Sorting through the data can unravel all sorts of trends like seasonal highs and lows or trends that occur during hours of operations and spikes throughout the week.
Returns, Exchanges and Refunds
Let’s also not forget that sales also include returns and exchanges – which also hold trends that are important to be tracked and understood.
While returns, exchanges and refunds are probably in the running for a merchant’s least favourite task to perform, POS data can offer some valuable insights into customer behaviour.
By consistently accessing POS reports, patterns can be identified for frequently returned or exchanged products. Is there a problem with the way it is supplied or stored? Is the quality of the product not up to standard? Maybe customers were just expecting something different. Thanks to tailored POS reports, merchants can discover and avoid any product patterns that could potentially have a negative impact on the business and brand.
Your POS can offer you valuable inventory-based data analysis regarding your products, locations (for multi-venue businesses), supply chains and budgets. Inventory transparency can help with product purchasing and re-ordering.
Having a holistic overview of the stock on hand can really make a difference for any business that wants to carefully manage inventory as well as cashflow.
Cost of Goods (COGS)
Cost of goods POS reports can indicate the cost of different products and services that are sold by the business. They can highlight for the business where margins may be shrinking due to the increasing costs of raw materials or certain inputs. It might be the case that over time a supplier has continued to increase their prices and as a result the product has become less profitable and either should be scrapped or re-priced to ensure that profit margins are preserved.
A cost of goods report might also indicate the consumption of certain inputs and materials. Is the business over ordering certain perishable ingredients that are subsequently being wasted? Are there opportunities to order less frequently by ordering larger quantities and receiving discounts?
It’s also important to check the productivity of employees and track how well their sales are going. Employee POS reports include shift reports, commissions by the employees, revenue generated by employees, and more.
If staff members aren’t performing or reaching sales targets, maybe it indicates that additional training, support, or professional development measures need to be implemented to upgrade their skills.
Payment POS reports show how much money the company is collecting and from what sources (e.g. cash, credit, alternate). These types of reports can help determine the preferred method of payment by customers. Payment reports should include refunds, discounts, methods of payment, voided sales, cash events and tips/gratuities. Customer payment data should not be neglected as it can include valuable information. For example, it may be the case that your customers are increasingly preferring to pay using alternative payment methods versus more conventional ways such as cash and credit. It might also be the case that customers are preferring buy now pay later type methods.
Speaking of customers, your POS also collects (and if not it should) crucial information about your clients: addresses, e-mail addresses, celebrated holidays, birthdays or even their favourite products or dishes. So you can simply export those data and use them to create custom and personalised marketing campaigns. With this kind of knowledge you can build targeted newsletter campaigns or other online campaigns to send to your customers: gift cards or coupons precisely adjusted to their needs. You can use special occasions like their birthdays to convey a message about a special offer or new items on the menu. All this encourages them to come back to your store, restaurant or hotel. Overall, POS reports help your business to sustain effective relationships with your customers.
Standard reports that are available in POS systems aren’t always sufficient or practical to use in their current state. Often business owners need more custom-tailored solutions for their statistics or sales and performance records. Let’s not forget that report generation is a manual and repetitive task as usually no automation is in place.
How do you deliver valuable information and POS reports when every business has different needs? Not everyone has time to dig through the built-in reports of each system employed to support the everyday business operation. The process ideally should be automated, however this is generally not the case. The delivery of your POS reports usually depends on individual preferences or more often what the software offers out of the box.
Some data and integration providers such as Amaka, are able to provide a wide array of formats and delivery methods. Additionally it is often the case that data can be obtained at any level of detail, from summary formats to the SKU or item level. It offers customised data, different delivery methods and 100% accuracy. Services like Amaka help accountants and bookkeepers automatically export data and make it available for direct analysis or connection to third party data aggregators such as Google Data Studio or Microsoft Power BI. The process can be fully automated, and allow for deep accounting insight and analysis.
For selected POS systems, Amaka not only allows you to pick the data and frequency that you need to export it, but will automatically generate the report for you. These POS reports can be customised to match your preferred template or format including .csv, Excel spreadsheets, Google sheets and more. These custom POS reports can even be sent directly to multiple parties via e-mail.
As you can see, POS data and custom reporting can be very flexible and valuable for accountants and bookkeepers, as well as business owners. Through a variety of delivery methods, you can have your data available in any way that suits your needs. Additionally, the automation of the entire process can save you a lot of time and money, and the full range of formats gives you a lot of space for creativity and deep data analysis. Analysing and tracking data can help you boost your profitability and improve operations day by day.
Business owners should appreciate the proactive approach and experience of professional advisors like accountants and bookkeepers. Thanks to their support, you should have more time to focus on scaling your operation – it’s a win-win situation. Your data definitely shouldn’t be overlooked. There is far too much value to be unlocked and used.