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What are Turnover Rates?

Turnover rates are the way of measuring the number of times a business sells stock inventory in a certain time period. The turnover rates are used by businesses for calculating competitiveness and profits. Usually, it is a track of the performance of a business. A high turnover rate in the inventory is mostly seen as positive as it is a sign that goods are being sold before they are damaged or deteriorated.

The most generally used formula for calculating a turnover is:

Turnover = Cost of goods sold /Average inventory

Ways of Calculating Turnover Rates

 1. Determine a Time Period for your Calculation

Inventory turnovers are calculated over a specific time period. This time period varies as it can be anything from a fiscal year to an every day basis. The costs of goods that are sold are meaningless when they appear as an instantaneous value.

Once the time period has been decided on for calculating the turnover, calculate the cost of goods that have been sold over that period of time. The cost of calculating the goods sold will not include the amount of money spent on the shipping, distribution, and creation of the products.

2. Utilizing the Formula 365/turnover for Finding out the Average Time Period of Selling the Products

With this operation, you will be able to calculate the estimated time it has taken to sell all of your products that were stored in the inventory. Normally, you find out the turnover on a yearly basis and divide the ratio by 365. The number will be the average calculation of how long it took to sell your products.

3. Divide the Cost of Goods Sold from the Stored Average Inventory

Divide the cost of the goods that have been sold by the number of goods that are still in your inventory. The average inventory is the sum of the beginning value of the inventory balance and the ending value of the inventory balance divided by two.

4. Using the Formula Turnover=Sales/Average Inventory for Quick Estimates Only

Time is a valuable aspect of any business and entrepreneurs often do not have the time to make complicated calculations. This formula saves them time from calculating the turnover rates but, alongside, there is a slight chance of inaccuracy.

The values can turn out to be inaccurate because the inventory is calculated on wholesale rates whereas the goods that are sold are recorded at the prices offered to the customers. This makes the inventory look higher than it really is. It is best advised that you only use this equation to calculate quick estimates.

5. Use the Inventory as an Approximate Measure of Efficiency

Businesses make efforts to clear out their inventory as they have an aim to sell their products as soon as possible. This shows how the business is performing, especially among their competitors. Although the background of the business and the scale it is operating on has to be determined before any of these comparisons can be held, the time period it takes for a business to sell out the products in the inventory proves how well it is performing.  

Conclusion

Low inventory turnovers do not always prove to have a negative effect and high inventory turnovers do not always have a benefit. Record every single transaction, including the price of the stocked inventory, every product that is sold, the profit gained, and sale targets in bookkeeping records. This will also help in calculating the turnover rates without having to gather all of the information at the last minute.

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About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

Wireless payment using smartphone and NFC technology. Close up. Customer paying with smart phone in pharmacy. Close Up shopping

What Is a Point-of-Sale System?

A POS or Point of Sale system is essentially a system that mixes and eases up the payment processes of a retail store. It is made up of a software that is usually used for recording all of the details of each sale as it occurs, all the while updating the inventory records while providing customer management features that enable easy operation of your store. It further generates reports for you so that easy analysis of the sales data is made possible. The hardware of a POS may also consist of a bar code scanner, cash drawer, receipt printer, order puncher, and other such peripheral equipment based on your own particular needs.

Innovations in the POS System

Point of Sale in retail has seen a lot of innovations over the years but now, with the rapidly changing technology, we have witnessed some very innovative POS systems. The innovation has brought more ease and comfort for both customers and retail shop owners, with paying just by your face via PayPal or generating e-receipts. Retail business owners are demanding more unique innovations in order to stand out from the rest.

Some of the innovations that we might see around in the POS systems in 2018 are discussed below.

No Checkout POS

Point of Sale Systems have revolutionized retail businesses. Imagine a store where you arrive, walk around in the aisles, look for your required item, pick it up and walk out of the store with it. It is possible as an innovative POS automatically generates payments the minute you walk out the door. There would be no physical POS system and no requirements to scan codes. Originally brought forward by Amazon, this innovative POS system is now making its way into mainstream retail businesses. The new POS system makes use of sensors and artificial intelligence to make the payments by a customer’s virtual cart where the customer is charged for the products.

Mobile POS App

Order and pay on the move the next time you head out to eat or grab coffee. Make use of the interactive apps on your phone that also act as an innovative POS system allowing you to not only order your food but pay for it as you go. You can enjoy your meal and leave quickly during your busy lunch hours. This innovation was introduced by a UK based coffee shop. It simply quickens your procedure and cuts your mealtime, allowing you ease and comfort while providing business owners a hustle free counter. The same Point of Sale system is being followed by a shoe shop in the UK as well, allowing you to buy a selected product by simply scanning the code on your product while making your payment automatically.

Virtual Shopping with Tablets

Innovative POS Systems are also helping to enhance the customer experience by not having to go to every retail store. The products are simply kept on display, where a giant tablet is also provided in the window, allowing customers to go through the latest collection of clothing of their favorite brand. The customer would have access to designs, colors, and a whole variety of choices on their fingertips without wasting their time going through stacks and rows of clothing. The same tablet could then be used to place your order and pay for it, too. This POS is gaining quick popularity in the US.

Make your Face your Money

A hotel in Birmingham has come forward with a unique innovation in Point of Sales where all customer just have to smile as they check out. It triggers a picture that is matched to your profile picture on PayPal, allowing you to make payments on the go without having to go through any hassle of waiting in line. Once the payment is made, an e-receipt is generated.

Conclusion

POS Systems are revolutionizing the way customers experience shopping. As newer POS systems are created, the customer experience is enhanced, providing both the business and customers numerous benefits.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Beautiful woman using tablet while working in the store
It is a dream of every business to make its next year better than the last as it is the only way to take abusiness towards its mission and vision. Retail businesses are mostly dependent on seasonal trends which alter throughout the year. However, we have put together a few success tips for retailers who want to achieve year-round success. It doesn’t matter if you have had a great or disastrous previous year; the tips below are surely going to change your fortune, provided you do exactly as told.

Retail Success Tips

Update Obsolete Hardware, Software and Business Processes

All of your resources have been put to the test in the last season and now is the perfect time to evaluate where you stand. Based on the data from your last year’s sales, you need to assess the effectiveness of the hardware and software that is currently being used. For example, some of your departments may require a larger screen size or an automated system. Assessing past data will allow you to figure out if the tools and processes that are currently being implemented are useful or outdated.

The best retail success tips would suggest that it is not about having the latest and coolest tools around. Instead, it’s more about streamlining your business process and offering a better customer experience through the creative use of what you have at hand. Shifting to digital loyalty cards instead of physical ones is one way to optimize the utility for the customer as well as yourself. An updated system is also more secure. There are countless reasons why you should update anything in your business that is considered obsolete.

Interact with Customers at a Personal Level

In 2018, the anticipated marketplace is forecast to be fiercer than before, as traders will up their efforts in vying for consumer consideration. Forward-looking retailers are already implementing retails success tips through Omnichannel shopping, in-time order delivery, and optimum pricing strategies. With all of these strategies in place, do not forget that customer service is still the king when it comes to retail shopping. Connecting with your customers in a way that makes them feel comfortable and at ease while shopping in your store is a great way to convert one time shoppers into your loyal customers.

Motivate Your Employees

Employees are the main assets for any retail business because they are the ones who are actually making the sales. If they are not completely motivated, your business is likely to go down the drain for the current year as customers are more aware than ever. You may have to prepare a motivational speech to get them on board with your vision as well as up their incentives from the previous year. Don’t just speak. Instead, ask them for suggestions and make them feel like they have an equal stake in the business. This is the best way to get the most out of your employees.

Make Use of All Sales Channels

In this day and age of technology, one sales channel is not enough to make the expected gains. Retail success tips suggest that you set up additional sales channels so that customers can buy at their convenience. This means that you may have to set up an e-commerce platform for your retail business and start selling online if you aren’t doing so already. If you have a brick and mortar setup, you may turn towards social media as it is among the hottest platforms for retail sales. Ensure that your sales channels are interconnected so that, if someone orders online, they can pick it up from your store if they want the product urgently.

Create a Compelling In-Store Experience

Even though the trends are all moving towards online sales, people will still visit retail stores, not solely for buying, but because it is an experience for some. Offering personalized customer service to these consumers should be top priority for retailers and must be considered as one of the top retail success tips for 2018. To offer the best experience, you will have to invest in your workforce and train your employees. Also, the in-store ambiance matters significantly when you are looking to create an aesthetic appeal for your retail brand.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Sears Store Door Entrance in Southcentre Shopping Mall in South Calgary with Liquidation Sale Deals due to upcoming Corporate Closure and going out of Business
The death of brick and mortar retail is exaggerated. Retail isn’t dying, it’s just changing!

A Retail Round Up

Over the past decade, there’s no denying the fact that customers’ tastes, demands, and purchasing patterns have changed quite drastically, compelling the retail industry to change with them. The change in the industry’s dynamics is largely perceived as a ‘retail apocalypses’, leaving thousands of brick and mortar retail stores to close in its wake. However, this is not the only reason. Ever-evolving preferences and inclinations, lack of wisdom to run a retail establishment in the competitive environment, large upfront investment botches, and increased trust in e-commerce retail stores like Amazon, eBay, Alibaba and other similar online retail stores are a few of the major reasons causing retail establishments to shutdown at a massive rate.

The surge in the popularity of e-commerce retail stores bears testimony to the fact that online shopping is growing among millennials. They love to buy their favorite products online and get them delivered to their doorsteps with easy payment schedules. They have actually found an easy way out to save more time for themselves without having much to worry about. This is certainly one of the reasons causing the death of brick and mortar retail stores. However, when we look at the bigger picture, we are surprised to find that online shopping equates to only 8.1% of the total retail sales in 2017.

What Do Statistics Say About The Retail Meltdown?

According to the survey results compiled and revealed by one of the leading international retail agencies, worldwide retail sales accounted for $23.45 trillion in 2017, which is expected to grow and reach a whopping $27.73 trillion mark by 2020. Undoubtedly, brick and mortar retail is perhaps never going to die as long as this planet Earth exists and people are alive. There are times when a business or an industry has favorable grounds to thrive and vice versa. The brick and mortar retail industry may have seen a retail meltdown for the past few years, but that doesn’t mean that the industry has no chance to survive hard times and fight back to retain its lost image.

Why Retail Store Chains Are Facing The Most Closures

The predominant reason that is causing the death of brick and mortar retail stores is large upfront investment failures. Retailers, when they see profit margins and achieve success in any specific locality, get excited about opening more of their retail stores in different areas. This excitement often leads them to set up more stores and spend carelessly on improving their in-house customer experience and facilities. The great sums of money spent on creating an ideal shopping environment are largely misunderstood by most of retailers. Often, they spend impractically and unreasonably on creating an extravagant shopping environment, which increases their investment and costs. This, besides expanding their operations, causes the death of a brick and mortar retail store.

What Should Be Done To Prevent The Closure?

In order to maximize cost reduction, you must first cut down your large upfront investment and allocate adequate resources to get things moving seamlessly in the right direction. Secondly, you must provide an exquisite shopping experience with a unique in-store service. Also, you must a hire a professional accountant for bookkeeping services who will provide you with a clear picture of your finances, tax details, bank loans, etc. for better financial decisions. Moreover, you must reevaluate your retail objectives and retail establishment’s strategic mission, especially your supply chain channels. Last, but not least, you must do a root-cause analysis of each problem and come up with a relevant strategy to recover from the crises situation. By taking all of these effective measures, you can expect to prevent the death of your brick and mortar retail store.

Brick And Mortar Retail Is Still King!

The death of brick and mortar retail is nearly impossible. Although thousands of brick and mortar retail stores may be closing their doors due to bankruptcy or lack of creative wisdom to stay competitive, online retail stores and their total earnings can never come near to the overall earnings of brick and mortar retail stores around the globe–at least any time soon. This makes it safe to say that brick and mortar retail is still king (or queen!) and all of the stories associated with the death of brick and mortar retail are baseless.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Woman in shopping. Happy woman with shopping bags enjoying in shopping. Consumerism, shopping, lifestyle concept
Visual merchandising is the act of making retail spaces more attractive and pleasing for customers, entice foot traffic, and encourage impulse buying. Retail businesses have seen a decline in recent years as customers have moved to online purchasing. This has made it even more important to incorporate visual merchandising strategies in order to improve retail sales and customer walk-ins. Visual merchandising encourages consumers to buy from your store. This will improve sales and encourage repeat sales. Visual merchandising is all about the look, feel, and culture of your store and brand. If it’s done perfectly, it will help increase your customer brand loyalty.

Importance of Visual Merchandising

Visual merchandising is necessary in retail outlets that depend on heavy foot traffic. It is an effective way to attract your customers. Following are some major benefits of visual merchandising.

Components

The appearance, uniforms, lighting, menus, signage, color, point of sales material, textures, shapes, ticketing, packaging –  all of these terms together make up what is called visual merchandise. When these elements are combined, it allows a customer to better understand your brand. It leads to a positive shopping experience and increases the number of sales.  

Brand Loyalty

Improving the customer experience in retail stores with the use of visual components can lead to greater sales and more customer satisfaction. Suppose you are promoting a beauty product. Enticing the younger generation to purchase your products, through the placement of banners and beautiful product displays, will help generate awareness and brand recognition. Contrary to this, if you own a cosmetic brand and your target customers are of a mature age, then tailoring visual merchandise in a manner that appeals to them becomes extremely vital. Using specific strategies, your customer will better understand your brand. Brand loyalty will lead to repeat purchases and a loyal customer base.

Avoid Overwhelming

Overwhelming your customers with visual merchandise is also not a good strategy. Offering too many choices can often back fire, as it confuses shoppers. Selecting the proper products to appeal to your desired target audience is essential for improving retail sales. Not every product needs to displayed. The products that may have the most appeal need to be displayed in the front and center to attract customers into the store. Analyzing your retail store in detail can help in determining what products are to be displayed more affluently than others. If a product is placed in a way that it’s not giving a high margin line, you need to change this arrangement. Learn, understand, and implement what users want to see.   

Themes

Adopting particular themes that pertain to your product or brand displays can further improve customer interest. A theme is all about a back-end story that relates the product to the customer. The use of themes allows brands to reinvent themselves with layouts, colors, fonts, design, and imagery.  The idea of a theme is all about combining colors together, giving them a unique contrast, and grouping products to individual motifs.

Marketing

Marketing is the backbone of any business. Effective marketing can lead to increased sales and improve brand recognition. Your marketing should convey the look and feel of your brand while encouraging a call to action. Marketing strategies such as flash sales, customer loyalty discounts, social sharing incentives, and capturing customer information are all beneficial when it comes to improving retail sales and encouraging repeat purchases.

Conclusion

In order for retail stores to stay competitive in this largely online world, proactive visual merchandising has certainly become of key importance. Retail stores need to understand that a bulk of their sales are generated from impulse purchases. Therefore, a perfect visual merchandise strategy can be the difference between a highly profitable retail store and one that is barely breaking even.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

A worker is punching his time card with the automatic clock
In recent years, internet start-ups have indeed changed the way in which employees work, offering flexible schedules and taking in remote employees. While all of this may be quite simple for an internet start-up, it is not as easy for retail outlets. They need to have a well-disciplined shift system. However, it proves to be tricky. The requirements of a strict shift system make retail jobs relatively undesirable compared to online companies that, as said before, offer their employees flexibility.

Bloomberg states that employee retention as one of the biggest problems of the retail sector in today’s world. However, there is a solution if you take up certain practices to improve the quality of work in retail, producing happy and productive employees.

Be Predictable

It is estimated that 17% of retail employees have unstable work schedules which lead to difficulties for employees. In order to avoid your employees facing such problems, it is important to inform them about your shift needs and the times you will require your employees to be on the floor. Come up with a suitable shift calendar, share it with your employees, and do your best to adhere to what you publish in that shift calendar.

Plan in Advance

In certain states, shift scheduling problems have led to lawsuits. The main practice highlighted in the lawsuits was on-call shift scheduling. This on-call practice puts employees under immense pressure, forcing them to be available during the times they are off. It can also violate the labor laws in many states.

It is much better to work with a streamlined schedule that is posted well in advance for employees to see. You can work with a good strategy. For example, have at least one experienced and well-performing employee on the floor at all times.

Be Transparent

Making on-paper schedules is not a thing of the past. Current technology allows you to construct and share shift schedules with your employees. Transparency will not only improve the relations you have with your employees but will also help your business in following labor laws more efficiently.

Improvement of relations with employees also means that they will be happier and this work kind of work environment will definitely yield higher productivity.

Encourage Communication

Managers often get pressured by shift change and vacation requests. You can streamline this practice by encouraging your employees to communicate and coordinate all of their needs through scheduling software. Given the autonomy, your employees will be able to plan a shift schedule for themselves, which can be later on approved by the scheduling manager. This will improve teamwork, shift the burden of rescheduling everyone for a one day leave, and help avoid the uncomfortable situation of telling a particular employee that they might have to work extra shifts.

Accept Feedback

Encourage employees to give you feedback on the shift schedule by making yourself available. Remember that the feedback process is always helpful.

Feedback will help in building a positive employee-manager/owner relationship, raising the happiness and productivity of employees. In order to avoid any kind of accusation of favoritism, set up a feedback framework such as an anonymous questionnaire or survey. This will also help if you put some of their suggestions into action in order to let the employees know that their feedback and suggestions are not being ignored.

Data-Driven Decisions

Employee satisfaction is one of the primary objectives that your business wishes to achieve. However, it shouldn’t let you go off-track of your main goal to sell your products.

Note and mark the times when your retail store is filled with customers and assign shifts in a way that more employees are available at that time. Similarly, keep lesser employees on the floor at times when there are only a few customers around. This will balance the workload that each employee has and will also derail any sort of grievance that employees might have related to them being more burdened as compared to their co-workers.

Work Incentives

Retail stores rarely offer their employees a clear road to promotion and growth. The most they might get is an advance to a managerial position. Due to this, temporary or even permanent employees might not be productive and employee retention can become a serious issue. Giving incentives, such as role-based training from someone experienced, can help a lot in enhancing the quality of customer service and productivity of your workers.

Acknowledgment of achievements through a proper recognition framework can help a lot in boosting the performance of your employees. You can also choose to provide bonuses. Providing respect to your employees can help you build manager-employee relationships. Assigning extra tasks, such as bookkeeping, based on the qualification or skills of your permanent employees can give them a fulfilled feeling that will boost their work performance.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.