In today’s highly competitive retail industry, the power is in the hands of the customer, and they can be fickle. The successful business owner is the one who has the information at their fingertips and can adapt quickly.
Keeping track of every single transaction in and out of your business will help you to systematically measure revenue and profits, identifying areas of the business which are doing well and where you need to make some changes.
How to make this easier?
There’s a lot of work involved in this and your time is valuable – success lies in automation, through a frictionless flow of data from inventory through to your online shop front, your e-commerce facilities and your accounting.
Real time accounting gives you financial data almost immediately after the transaction. You have real time access to your profit and loss, balance sheet values, sales reports and more. Having these figures to hand allows you be savvy and react quickly to the needs of your business. Here’s a couple of examples:
1. What channels make money?
When using a system which accounts for channels such as your Shopify or eBay store, you can quickly and easily see which channels are working and which aren’t.
A common mistake made by multichannel retailers is the assumption that high order volume equates with higher profits, when actually they are making very little or no profit once all of their costs are taken into account.
By filtering and comparing the information within one system you can see real time accounting data for each separate sales channel against the costs to source goods. You can keep track of your margins to identify areas to improve, giving you the ability to make informed decisions to make adjustments quickly.
2. How much stock am I holding?
Each time you make a sale, stock levels are automatically updated. You know exactly what the cost of goods sold (COGS) is, what profit you’re making each month without time consuming calculations and journal corrections.
Your stock holdings can also tie up cashflow. Real time accounting will help you identify the practical steps to release these valuable cash reserves.
Traits of successful business owners
Successful business owners are those who know what’s going on in their business, in detail, and understand how the incremental decisions they make every day create a long term sustainable business. Today’s technology is a great enabler of that, especially for SME’s to capitalise on the opportunity now available in real time accounting.
About the Author
Connect with Rachel on LinkedIn
More information about Azure Group