Every retail, eCommerce or business owner should be familiar with financial reports because they are dictated by legislation and require the disclosure of financial results. These reports are usually released quarterly or annually and include the Balance Sheet, Income Statement, Cash Flow Statement and Statement of Changes in Equity of the organisation.
Other valuable reports for businesses analyse information such as sales and inventory data for the purpose of making recommendations and guiding decision-making. However, because there isn’t any regular obligation, the importance of regular sales reporting or inventory stock reports is often overlooked.
Sales are critical to the success of your retail or eCommerce business and the easiest way to gain a clear view of how well sales are doing is to produce regular sales reports. Sales reports help to track the health of your business and to highlight any inefficiencies in your inventory control. Following are five key sales reports that will provide you with great sales and inventory data:
Sales Summary report
A good Sales Summary report provides an overview of sales for a given period and shows the cost of goods sold, gross profit, revenue margins and taxes. The information in this sales report reveals month on month profits and allows you to compare year-to-date sales to previous years, helping to guide medium to long-term business decisions.
Per Product and Type sales report
This report gives more in-depth insights that make it easy to identify your best and worst selling products. This means when a product is selling well, you may consider ordering more inventory stock. Conversely, for those underperforming products, you can discontinue lines or plan promotional activities to get rid of underachieving products.
Product Performance reports
Product performance reports identify inventory turnover or how quickly items sell and the products that are generating the greatest revenue. This report should tell you how much inventory stock is available and because this report combines sales and inventory data, it is an extremely useful tool for future inventory planning.
Daily Average Sales report
This shows the average daily sales of an inventory stock item over different periods, helping to uncover demand trends. They should show all items either sold or still on-hand as well as their current inventory levels and value.
Margin reports help you to determine the margin earnt per product across various channels. Providing an indication of the bestselling inventory, the highest margin products and any loss-making products they help to drive strategy for product pricing, reordering processes and for demand forecasting.
Inventory control and sales reporting
Inventory reports feed into sales reporting so the two should be closely integrated. It is difficult to effectively manage sales if you don’t have accurate, timely and up-to-date inventory stock data.
Ensure that your POS and inventory control systems are synced and tightly integrated so that data flows seamlessly between the two systems for accurate, real-time sales reports and inventory stock availability.
Systems should have flexible analytics that allows you to filter and view the information in different ways such as category, product type, style or customer group. Following are five key inventory reports to assist inventory control:
On-hand Inventory Stock report
This report is crucial to knowing the stock and quantities you have across all channels and should be produced regularly. It shows you the number of product units in each location and the current stock value. This report tells you how much capital is tied up in inventory and can help to guide financial planning and forecasts.
Stockouts are bad for business, they lead to lost sales and customer dissatisfaction. You can prevent these by regularly generating Stock reports that identify the stocked items that are running low.
To overcome the risk of stockouts you can set par levels and re-order points for inventory stock and get notifications when your stock levels reach predetermined minimum quantities. Running a low stock report regularly can help to highlight patterns around products that are constantly running low.
Inventory Ranking report
This report grades products in descending order of the gross margin they generated over a defined period comparing profitability with the holding cost. This is a useful report to determine which products are occupying more space in the warehouse while contributing little to profits.
Comprehensive Order Detail report
As the name suggests, this report provides comprehensive details of all orders. Providing a complete and comprehensive list of information about each order including lines, pricing, sales credits, holds and scheduling details.
Backorder Summary report
This report reviews all backordered sales orders, summarising each order while the Backorder Detail report reviews all customer orders on backorder. It provides details on every backorder and includes the customer name, order number, all backordered items with their appropriate line numbers, total quantities ordered and backordered as well as the financial totals of both ordered and backordered quantities.
Cloud-based sales and inventory control tools
Cloud-based systems are effective tools that allow you to track your sales and inventory data from anywhere on any device with an Internet connection. The detail of the various report available through cloud-based software can be adjusted and refined by changing the parameters of the reports allowing you to drill-down to view sales by SKU variations such as sales and inventory data by product category, colour, size and style.
The software offers analytics and forecasting functions to help predict future sales demand and to optimise reordering processes, inventory control and marketing activities.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.