Cloud technology is at once powerful and versatile. When applied to point of sale, the cloud enables business owners to not only sell, but also to optimize their sales using the data these systems effortlessly collect. In just a day’s worth of transactions, your POS has the potential to collect a wealth of information about your sales, your employees, your customers, and the trends that can make or break your business.
There’s a good chance you’re not taking full advantage of even your POS system’s basic data reporting capabilities. Or if you’re shopping around for a new cloud POS, you may be having a hard time sussing out the reporting features of each different POS app.
In this article, I’ll discuss how you can use POS reports to make better decisions concerning your business. Read on to learn how to harness the power of the cloud so you can sell smarter.
Why Your POS Data Is One Of Your Most Valuable Assets
The POS system is a central hub for most brick-and-mortar businesses. Using web-based technology, your POS gathers data about your sales, customers, employees, inventory, and more, and assembles all this information into digestible reports. The business owner or store manager can then access these reports online. POS reporting data can (and should) be used to make important decisions about things like staffing, which products to sell, and when to restock.
The importance of POS reporting becomes abundantly clear when you start shopping for a POS and you see that most systems charge extra for advanced POS reportingÂ capabilities.
With that said, you need to know how to interpret and apply your POS data in order for it to benefit your business.
Let’s dig a little deeper into how you can go about doing this.
How To Effectively Handle POS Data Analysis
POS systems organize raw data about your business into reports, which are typically pretty user-friendly. Still, you need to be organized and methodical about checking these reports in order to make them actionable.
Here are tips for checking your POS data:
- Pull End-Of-Day Sales Report(s) Daily: In your daily sales reports, you can typically view things like your total sales, which items sold most, your busiest selling time that day, and other metrics for the day. The exact type of daily sales reports vary by POS, but your POS should have at least some kind of general daily sales or closeout report you can check to get a general overview of how the day went.
- Pull “X” & “Z” Reports Daily: The “Z” report shows a more detailed breakdown of your daily sales and is run at the end of each day; the “X” report shows that same data but can be run at any time of day to show a current snapshot of the day’s sales so far. These reports show detailed sales breakdowns by category, tender type, employee, as well as taxes, gratuities, gift card spends, voided items, and more. Importantly, the Z report will let you know how much cash should be in your register at the end of the day.
- Pull Employee Reports Daily: See who worked that day and what they did. Checking daily will help you spot any discrepancies or suspicious patterns, and also make sure all employees have clocked out by EOD.
- Check Payments Report Daily: You need to send your credit card transactions to your merchant services company daily in order to get paid. POS systems with integrated payment processing should automatically batch your transactions each day, and you should be able to view this information in some kind of daily payments report. It’s a good idea to check each day to ensure the batch was sent, and also check daily to make sure your bank deposits are matching your batch totals.
- Check Other Reports Periodically & As Needed: POS software offers various other reports, including reports on order histories, stock counts, customer behavior, returns & exchanges, gift cards, discounts, comps, and more. While you don’t need to necessarily check all of your reports every day, it’s good to have this data at your disposal so you can dig deeper when you need to solve a problem—for example, if there is a discrepancy in your daily “Z” report, you might check your comps and discounts reports to see who might have issued a discount and why. Another example is checking your batch history for a certain day if a customer complains they were double-charged.
- Pull Your Reports Weekly, Monthly, & Annually To Identify Trends: In addition to pulling key reports daily, looking at sales and other metrics over longer time periods such as weeks, months, quarters, years, etc., will provide important insights about your business’s performance and help you identify trends over time.
With multi-location businesses, the manager at each location should have access to reports, and there should be a system in place for regularly sharing reports from each branch with other managers and/or the business owner.
POS Web Reporting VS Mobile Dashboards
In recent years, more POS systems have embraced mobile POS reporting, which lets you run reports on a dedicated mobile app. These apps may even show a live view of your sales in real-time. Mobile reporting apps make it convenient to quickly access key information about your business’s performance when you’re at home or anywhere else.
However, POS reporting apps often have a somewhat pared-down version of the reporting suite you’ll find on the web dashboard that you log into from your browser. When evaluating POS systems, find out if it offers mobile reporting, and if so, see how the mobile reporting suite differs from what you’ll see in the web portal.
A couple of examples of POS systems that offer strong mobile reporting apps are ShopKeep and Square, which offer the mobile reporting apps ShopKeep Pocket and Square Dashboard, respectively.
How To Optimize Your Point of Sale Data Collection
To generate accurate reports, business owners need to make sure their POS is accurately gathering data. While POS systems generally make it quite easy to collect data, you’ll still need to do some setup to optimize your data collection. This setup process can be tedious if you just want to get up and running, but it’s super important for data and analysis purposes. Trust me: you’ll thank yourself later.
Implement A Strong Inventory Management System
Inventory reports will only be accurate if you have a good inventory management system in place. For example, all of your inventory must be properly tagged by category. To gather information, you need to generate reports on your business’s profitability, and you’ll also need to enter the raw cost of each item.
Depending on your needs and the strength of the POS system’s inventory tracking feature, it may benefit you to also use an outside inventory management software program that integrates with your POS. Which brings us to the next item…
Make Sure Your POS “Talks To” Your Other Business Software
Whether you use software for inventory management, accounting, email marketing, or any other business function, it’s important that this software integrates seamlessly with your POS. Otherwise, you won’t be able to transfer data between systems. For example, many businesses use QuickBooks and thus need a POS that integrates with QuickBooks. Or, you may operate a Shopify online store and need a POS that integrates with Shopify to sync your in-store and online sales.
Sometimes, you may have to pay an extra fee for POS software integrations, especially if you need to hire a developer to create a custom integration. Depending on cost and other considerations, you might consider switching to a POS system’s in-house add-on for accounting, eCommerce, etc. (if they offer an add-on for that function).
Customize Your Reports To Track KPIs
Your business should have key performance indicators (KPIs) that relate to your goals for your company. Measuring and tracking these KPIs helps you focus on the data that matters most for your business. For example, if you have the goal of increasing the amount each customer spends, you’ll have a KPI for average spending.
Some POS systems let you create custom reports which can be helpful for tracking your unique KPIs—Square is one example of a POS with this capability. Even if your system doesn’t let you generate custom reports, you may be able to customize your reporting dashboard to show the reports that relate to your KPIs, or modify your reporting settings to send you those reports at your preferred frequency.
Train Employees On Best Practices
Not just cashiers, but everyone on your team needs to be trained on best practices to accurately collect data using the POS. This could mean making sure your sales team is trained on how to onboard customers to the loyalty program, training warehouse workers on how to properly tag inventory, etc.
The first step of training your staff is for the manager themselves to become well acquainted with all POS functions and how it collects data. Once you know what data the POS collects, you’ll be able to advise your staff accordingly.
6 Clever Ways To Use Your POS Data To Firm Up Your Bottom Line
What can you do with reports to actually increase sales or lower operating costs? Here are some ways to put that data to work:
- Get Smart About Staffing: Check employee management reports to see if you’re adequately staffing for busy times or overstaffing during slow times. You can also gauge the performance of individual employees to see who earns the most commissions, who comps the most items, and other key metrics.
- Optimize Your Outlets: Even if they’re only across town, two locations of your store or restaurant can have very different customer bases, so it makes sense to individualize your offerings at each location. With multi-location POS reporting, you can compare data between different locations to customize inventory and staff to meet each store’s needs.
- Stock Only What Sells: Run reports to see what hasn’t sold and what’s selling like hotcakes. Then you can clear out the non-selling product for a more popular item. You can also use reports to see what items may sell best during certain times of the year and make stocking decisions based on that data.
- Retain Your Customers: POS systems with CRM reporting help you maintain relationships with your customers. For example, you might check reports for lapsed customers and offer them a coupon to win them back. Or, identify your top customers and reward them with an exclusive offer. If your POS has a loyalty program, you can also track the success of any offers and coupons you send out.
- Find & Fix What’s Gone Wrong: Theft, errors, and mismanagement are all problems that can be detected using POS reports. When you encounter a problem, there’s a good chance that the solution lies in the data. For example, if you see a lot of voids, this may indicate that your staff needs more training on how to use the POS system.
- Motivate Your Team: Sharing information from your POS reports can be a useful motivational tool in a team setting. For example, you might have a meeting to show everyone how much sales increased last month — and then provide an incentive to sell even more this month! The employee insights from your POS reports can also prove useful for individual performance reviews, as they provide information on what the employee is doing well, and perhaps things they can improve upon.
Your Point of Sale Data Can Make Your Business More Successful, So Use It!
Point of sale data can tell you a lot about what’s going on at your business. From employees’ daily activity to inventory stock counts and long-term sales trends, POS reports put actionable information right at your fingertips. To better acquaint yourself with the different types of POS reports, I recommend reading the Top 5 Standard POS Reports and POS Reports: Getting Beyond The Basics.
If you’re ready to go get yourself a fancy new POS system that has better reporting tools, we have a plethora of information on the best POS systems for your buck. Here are some additional resources to help you find a POS system with excellent reporting:
- Best Retail POS Systems
- Best Restaurant POS Systems
- Best Salon POS Systems
- Best POS Systems For Bars & Nightclubs
- Best POS Systems For Food Trucks
- Best Coffee Shop POS Systems
- Best Liquor Store POS Systems
Have a question about POS data or point of sale systems with strong reporting? Leave me a message in the comments and I’ll get back to you.
The post Why Point Of Sale Data Is The Secret To Understanding Your Business And Making More Sales appeared first on Merchant Maverick.