With the economy getting back on track and an increase in customer footfall, many businesses still struggle to maintain the level of sales margin they require to make their business profitable.
In periods of growth it is very easy for margins to be neglected and for managers to lack the time and resources necessary to implement improvements to effectively handle the increased workload.
Having the right business management software in place is key to helping you closely monitor and track all aspects of your business. It is also crucial for proactively assisting you in maintaining or improving margin levels at all times.
We’ve outlined below just some of the things you should consider when looking to improve your bottom-line…
Role Based Access Levels and Controls
Where multiple sales people are processing transactions, it is not possible for a manager to monitor each and every sale. When you set a maximum discount amount and a maximum discount percentage you can effectively control the scope users have to reduce pricing at an acceptable level for the relevant roles within your business. Responsibility levels are different for your users and so should the capability to give away margin.
When setting up products you can stipulate the maximum discount allowed and the minimum acceptable margin. Whichever threshold is reached first will block the user from progressing with the transaction. This can be set to warn, stop, get confirmation or require authorisation. For ease of maintenance we recommend using derived pricing so that any change in cost is carried through your pricing. This can ensure there is no creep in reduced margin in the event you have price increases.
Everyone loves a discount – except the retailer! In order to protect your margin, you can prevent users from changing prices or restrict the maximum discount allowed per user or product as above, but reality bites. In the real world you may want to make informed decisions and allow senior operators to override the rule. This can be setup as password controlled or require an authorisation routine. The user, depending on priority, can have easy access to the relevant information to facilitate fast and effective negotiations and customer service without leaving point of sale.
For your customer-facing staff you can highlight products that make more margin and set prompts for them to sell those items rather than similar products with less margin.
Minimise the user’s requirement to amend prices and retain customer specific pricing. If the discount culture becomes instilled in your business it has the knock on effect of changing how you operate to accommodate this standard practice of giving away margin. When implementing a price list for customers, the price agreed should be retained when entering a transaction. In the event a senior member of staff changes the price you should, at the click of a mouse, have the ability to update the customer price list. This facilitates locking down less senior staff from giving away margin using the tools detailed above.
In the Business First Online magazine, Darren Gray, Sales Consultant with Intact Software, goes on to explain a further 6 ways to protect your margin utilising your business software capabilities.
These include availing of features such as 'Special Offers and Pricing', 'Effective Reporting', 'Empowering field based sales reps', 'Being Cost Aware' and more.