Sales revenue management and profit and loss reporting are key points in business that shop owners need to pay attention to. Recording sales revenue at the right time helps shop owners build the most accurate profit and loss report.
Many retail stores in Vietnam opened spontaneously, or were passed down from generation to generation. The store owners mainly manage by feeling or heirloom experience, so they lack a scientific view and do not have a specific development strategy, do not understand the accounting profession or trust their employees too much. Many shop owners often complain: "Why can't this product make a lot of profit, the goods can be sold but can't see the money!" How to properly memorize revenues and expenditures will solve the above dilemma.
What is revenue?
Revenue is the total realized value brought about by the sale of goods, products, or provision of services to customers, including the entire amount received or entitled to claim from the sale of goods and services. in a certain period of time.
Strict revenue management helps to minimize business losses.
Types of revenue shop owners need to pay attention to
When it comes to business, when it comes to money, people consider it very carefully. So, in order to manage the store effectively, the store owner needs to know:
- Total revenue is the amount stated in the sales invoice, service provision contract, including the discounted revenue, returned goods and sales discounts approved for the buyer but not yet recorded on the invoice. .
- Net sales also known as real sales are determined according to the formula.
- Net Sales = Gross Sales – Sales Discounts – Returns Sales – Discounts on Goods – Indirect Taxes
Proper understanding of revenue will help you manage sales revenue more effectively
Reasons for incorrect revenue management
1. Revenue recognition when the customer has not paid
By default, the total value of transactions is sales revenue. But in reality, salespeople often confuse net sales with overall sales.
There are many cases, the shop's customers are in other provinces and cities in the country, and they ask for delivery to their place in the form of delivery - payment (COD). The time the shop creates an order to deliver to the shipper to transport the money has not been poured into the account. During the delivery of goods, the transaction may be canceled due to damaged goods, so the shop needs to compensate the customer, or the customer refuses to receive due to slow shipping, incorrect delivery and receipt information. As such, sales revenue will change.
Poor operations adversely affect revenue management
2. Habit of using books
Habit of selling by book, where to write down. The shop cannot manage the status of employees selling out of the book (selling to customers but not recording). Many small revenues and expenses due to additional discounts because of regular customers, or unexpected import of goods that are not counted, etc.
These barriers will make it very difficult for shop owners to compare whether the amount of goods sold matches the amount collected or not? This leads to inaccurate revenue accounting, the manager cannot grasp the amount of lost goods, even if the total quantity of goods sold and stocked is not the same as the number of imports. original material. So shops can refer to the previous article Sapo Blog shared on the topic How to manage inventory so as not to lose.
Not to mention that the shop wants to get a "real" profit and loss report, they have to enter numbers in excel, and the manual calculation is sometimes very difficult to be accurate, and takes a lot of time.
The problem of effective and accurate revenue and expenditure management
Thus, the most effective way to manage sales is when you take many measures at the same time. First of all, build yourself a strict warehouse management process, thoroughly understand the specific tasks of each staff department and it is especially important to use reasonable support tools to achieve revenue management. high efficiency. About how to manage inventory, please refer to the article Tricks for effective inventory management for small business models.
Avoid loss of goods in sales management
A smart sales management software will manage cash sales at the store closely. In addition, the system will be integrated with revenue recognition with orders to ship provinces and cities according to the following standard process:
Goods delivered at the shop to the shipper > Shipper delivers the goods to the customer > The shop recognizes revenue when the shipper confirms successful delivery > Updates to the revenue report on the date the shipper confirms successful delivery.
This has two important benefits:
This revenue is 100% real sales of the store, accurately reflecting the specific business situation.
Actual revenue - expenditure in the store exactly according to the time cycle (correct about cash flow).
Thus, with just a simple click as above, shop owners fully understand the "actual" amount of money to avoid interruption of cash flow thanks to the management tool. From there, generalize the balance between income (revenue) and expenses in each period through profit and loss statement to finally know how much your net profit is.
Read more: Professional sales guide with sales management software
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