These days, a POS system is a fundamental piece of infrastructure for successful businesses. Using a point of sale system with top-notch reporting and analytics will eliminate guesswork and help you make critical business decisions with data.
Check out this article to learn how you can use point of sale reports to drive vital business decisions.
What are Point of Sale Reports?
With the right reporting capabilities, your POS reports will display various data points that’ll help you make informed decisions about your business.
These reports include (but are not limited to) sales reports, inventory reports, employee and customer reports, accounting and labor reports. Your POS system tracks and records every transaction at the point of purchase and generates reports based on this information.
Using POS Reports to Make Important Business Decisions
Reporting features are arguably one of the most important components of your point of sale system. With the right reports, you can keep a pulse on your day-to-day operations and understand your business’ overall health.
Here are some of the must-have reports you’ll want to ensure your point of sale system includes.
1. Sales Reports
Sales reports are valuable tools to help you make some of the most significant business decisions. They give you an understanding of data points such as gross sales, net sales, and the number of transactions.
Make informed decisions such as these with detailed sales reports:
- Determine peak performance hours, days of the week, and seasons. Use this information to decide staffing schedules and special promotions to draw more customers during slow periods.
- If you have more than one location, you can compare multi-location sales performance to identify your top-performing sites and poorest performing stores.
- Analyze voided sales over a period of time to determine what factors are causing them, whether it’s employee mistakes, fraudulent activity, or customers legitimately changing their minds.
2. Employee Reports
Utilizing employee reports help you to gain better insight into your employees’ performance. From clock-in to clock out, you can keep track of every transaction during their shift.
With the data these reports present, you can:
- Identify your top performers and reward them accordingly. For example, this can mean giving these employees more hours, raises, or other incentives.
- Identify underperforming employees and spend more time training them.
- Determine which team members are responsible for transactional errors or numerous voids that may be suspicious.
3. Inventory Reports
As a busy business owner, you’ll be forever grateful for inventory reports and how much time they can save you.
These are some of the decisions you’ll be able to make based on the information you collect from inventory reports:
- Determine item prices based on cost and a healthy profit margin.
- Set reorder triggers by creating a predetermined stock level threshold for every item. These specified boundaries reduce the need for you to manually check and order inventory, which decreases the margin of error in reordering stock.
- Utilizing inventory valuation reports lets you know how much money is wrapped up in inventory. This helps you make more informed decisions on reordering high selling items and getting rid of underperforming items.
- Use the information gathered from product reports to make future business decisions based on revenue. For example, when items are costing you more money than they’re selling, you could use this data to cut certain things from your menu or store.
- Identify top-selling items or services to determine whether or not to increase product production.
4. Customer Reports
There’s no surprise here, but your customers should be your top priority as a small business owner. Without an established customer base, your business won’t ever be able to thrive. Your POS system holds valuable information about your customers that’ll help you create better marketing and sales opportunities.
From your customer reporting data, you can drive customer relationship management (CRM) and relationship marketing to enhance the overall customer experience.
Customer reports can help you make these decisions:
- Create targeted coupons and discount codes that cater to your customers’ purchase histories.
- Craft new marketing strategies and messages based on your customers’ top interests.
- Track returning customer rates to create unique loyalty programs based on this data.
5. Accounting and Labor Reports
Accounting and labor reports are critical to operating your day-to-day business. With the right POS software, you can track your business’s assets, liabilities, revenue, and expenses to automate a general ledger report. This report does all the heavy lifting by facilitating your bookkeeping efforts.
With accounting and labor reports, you can:
- Set sales tax based on each item in your inventory. Most business owners are required to pay quarterly sales tax, so this will help you keep track of what is owed without the stress of making mistakes.
- Create general ledger reports to minimize human errors from manually keying in spreadsheets.
The Bottom Line
With these key point of sale reports, you will always be in the know. Learn not only to read your reports but also to thoroughly understand what they are saying to help you make smarter business decisions.