The computerization process: what you can expect (Part 2)

What a computer CAN do:

Using point-of-sale or business automation software to replace the cash register, the computer can simultaneously: print a complete invoice instantly, automatically reduce stored inventory data, update a customer’s sales history, update the records from a vendor, recording a receivable, alerting you if your inventory level is too low, and many other things. Let’s examine each of these in detail.

Cash Register Replacement: Using a point of sale system (so called because it is used at “the point of sale”), the computer will print a clean, legible invoice showing what was purchased, how which was paid for it was sales tax, and even include a mailer or coupon on the receipt if you’d like. The computer has intelligence that a cash register does not. Let’s say, for example, that you’re using a system that tracks customer sales. You may have some special repeat customers who get a discount, like a hardware store does with building contractors. Wouldn’t it be great to know that discounts are applied correctly and not rely on a vendor to calculate that? Most POS systems are capable of doing that.

Inventory Tracking – When you start using the system, you will enter all of your inventory levels and the computer will automatically lower the level each time an item is sold. For companies with hundreds or thousands of items or SKUs (Stock Keeping Units), this is a huge help. Many systems can produce a “Reorder Report” on request. This report will tell you which items need to be reordered.

Reorder Calculation – Depending on the industry, the right computer software can suggest the correct amount of merchandise to reorder. Some computer systems track seasonality and can automatically adjust recommended purchase levels based on that.

Track sales by customer: A point-of-sale system can track which customers buy the most, and even which customers are the most profitable, two important details that are not the same. A sales report showing year-to-date (YTD) purchases or YTD profit is helpful to a business owner. Similarly, a report showing which customers have stopped buying—for example, a reduction of more than 30% from one quarter to the next—can tell an astute business manager that something may have happened. Did the customer have a bad shopping experience? A good manager can pick up the phone and find out and maybe win back that customer. A feature like this is especially good for staying on top of issues with customers buying over the Internet, or for distributors who may be shipping products to customers across the country or the world.

Updating a vendor’s records – Keeping track of how much each vendor sells is an important management tool. Knowing how many sales and profits each person generates is very useful information. Business owners I have helped are often surprised that quiet salespeople often outsell very verbal ones.

These are some of the key areas where a business owner can experience numerous benefits from implementing business automation software. This article is part of a series; be sure to read the other segments.