Last blog I spoke about our cashiers, our face to the customer, and I was going to continue on the same subject, except that since then, I have uncovered two scenarios in two different networks – but essentially covering the same thing: That is not matching purchases to sales outside of the system.
Those of you that have been in retail for a long time (in other words before we got such sophisticated hardware and software) will be doing this anyway as a matter of course. My personal thinking on this is that in today’s world we have become too reliant on our back office systems and have forgotten about the retailing basics. Yes we get marvelous reports regarding our performance on a daily basis – but what happens if the system has wrong information inputted into it?
I buy 144 burgers- I need to have sold 144 burgers. Yes some might have gone to wastage and some were damaged. But these would be noted and I can add back to my 144. But what happens if my stock counter is taking 2 burgers a day and adds these back on his weekly stock count? My stock will always balance unless I personally go and check.
Yes, some of you will tell me, but I have two or three counters and surely they can’t all be working together on this. And therein lies the problem – the only way it does work is for a number of staff to be in it together. Just like the receiver of say Simba chips – it is after all a saleable commodity. How many of your staff actually count the stock in the box? There are supposed to be 48 packets in the box and you receive 48 onto the system.
But what happens if there are only 30 packets in the box? The receiver has received short, the merchandiser must of necessity see that there are less than normal – and they all get a box or two – each week to sell at will. And if you think I am kidding, just do yourself the favour and receive stock from time to time. I personally received a Simba box of 48 – only to find 25 in the box – and it was sealed! And that was last week in the Johannesburg area.
So I get back to my basic question – I bought 48 packets of Simba chips – I should sell 48? Right. It is nowhere to be seen. All I have to do at the back end is not GRV (goods received voucher) one invoice and my stock will balance. In other words I do not input an invoice. Or if your system drives purchases and payments, your staff will load the item with a quantity of 48 packets. And then add back what was missing – so stock always balances.
One of the scenarios involved forensic auditiors – and the paper trail all works. So the site was given a clean bill of health. What it does not take into account is the factoring of invoices (adding quantity or rand value to an invoice) or the adding back of stock in the back office.
So let’s take fuel. I put the pump on stand alone and bypass the POS (point of sale). The pump tells the back office that fuel is being dispensed so my stock balances. But my money in the bank does not add up. If I check sales by litres on the POS there will be a variance between what was dispensed and sold, ie, money in the bank.
So here is my tip for this week. Know how to check the system! Go back to the basics. Go manual! The systems today are really great –but it all depends on what is being inputted onto the system. Build some checks for yourself that you can use to check that the system is working for you!
Take care out there!
PS Go to this link and print out the system checklist. I will be focusing on this aspect of our business for a while.