If you’re one of the 13% or so of jobbers without a computer, then perhaps you need to read no further. If however, you are part of the computer-equipped majority, here are some pointers.
The beauty of a computer is that it can gather and blend all kinds of information to provide a view of business conditions never before thought possible. The difficulty is in knowing what reports to run, when to run them, and why. If you’re a counterperson learning the business, this is helpful. If you’re a manager learning the ropes, this is critical.
Let’s just look at the short-term, overnight and daily reports.
Overnight reports cover the previous day’s transactions. To be accurate, you must ensure that all transactions are as up-to-date as possible. Orders not filled can skew results, so you have to watch for them. Paperwork not completed is even more important. It is vital that purchase orders be input as received and that purchase orders and invoices for secondary vendors are run daily.
Also to be reviewed daily are price changes that require price sticker changes, and that transactions and entry of receivables are kept current.
Returns also need to be logged as they are received. These, like credits, are too easy to lose in the shuffle. Do them as they are received.
Daily sales reports also help the manager balance the cash drawers and ensure that all outflows of cash are reconciled.
Dealing with inventory and order points can be difficult. If the automatic re-order point is too low, and re-order too quick, you can find yourself ordering parts to fill an inventory void, while the parts that created it are on their way back to you as returns. It is for this reason that order points be reviewed regularly.
You should review and modify the order point based on movement history. The benefit is the optimization of the store’s inventory dollars.
At the end of every day, there are four things to review: Invoicing, Gross Profit, Sales and Line Items by Counterperson, and Gross Margin by Counterperson.
The purpose is to evaluate the performance of each counterperson as a benchmarking tool. This helps managers work with counterpeople to improve their productivity and enhance the profitability of the store.
On the sales report aspect, it is important to read the data from the computer properly. For example, if Counterperson “A” has 170 price overrides in a month, versus Counterperson B, with 65, you might be tempted to suggest that A is a bit quick on the override button. On the other hand, perhaps “A” is more adept at the add-on sale, but has to make a deal or two to get the extra dollars in the door, whereas “B” may just be taking orders. Likewise with gross margin percentage. One counterperson may have a higher average gross margin percentage for a given day or month, but have lower dollar sales.
These are important considerations, for each business runs on dollars, not percentages.
Managers and counterpeople, it is important to note, need to approach this issue as a team; avoiding a confrontational approach can eliminate suspicion and paranoia in the workplace.
In any case, a balanced approach to analysis is required, whatever the report. Ultimately, reports can only tell you what has happened, not what to do about it.
The University of the Aftermarket has training on a variety of store operations available on video tape and CD-ROM. It can be contacted at www.univaftmkt.org, or by calling 1-800-551-2882.