How much profit does a store lose without an accounting program?

In today's market, even a small store of 50-80 square meters can suffer significant losses due to the lack of an automated accounting system.  Taking into account the average cost of a business (goods, equipment) of UAH 100,000, the main financial risks may be as follows:

1. Losses from theft and seller fraud

The lack of effective control can lead to losses of between UAH 1000 and 6000 per month. Sellers often resort to illegal fraud due to poor accounting.   

Situation:

Let's imagine an electronics store where the owner decided to run a 30% discount on headphones. The announcement of the promotion was posted only on the store's website, and the information in the store itself and on social media was not updated. Sellers are aware of the promotion, but the store does not have a discount accounting system that would automatically apply promotional prices. 

Consequences:

The seller Alexey decides to take advantage of the situation. He sold the headphones at full price to customers who did not know about the promotion. At the end of the day, he presents the store owner with a report stating that he sold the headphones at the promotional price. Alexey keeps the difference in price, which is actually a loss for the customers.

2. Inaccurate accounting of inventory balances

Without accurate information about the inventory balances, situations may arise when the same product is purchased repeatedly, which can cost a business from UAH 500 to 20,000. Goods that have gone unnoticed and become obsolete can lead to losses of UAH 1000-5000.

Situation:

Let's imagine a bookstore that keeps its own inventory manually, without using a specialized accounting system. The store owner, Irina, calculates the stock of books based on periodic physical checks and sales records she makes in a notebook. Over the course of several months, Iryna noticed that some books she thought were sold out were suddenly appearing on the shelves, and some that should have lasted for a month were quickly running out.

Consequences:

As a result of these accounting inaccuracies, the owner ordered books that were already in stock in excess, spending about UAH 3000 on unnecessary goods. At the same time, she missed the opportunity to order popular books that were selling out quickly, losing potential sales of about UAH 4000. In addition, some customers who came for certain books and did not find them were disappointed and refused to make additional purchases, which could have brought in about UAH 2000.

3. Losses from customer churn

Queues, confusion in prices and assortment can scare customers away, resulting in losses of UAH 1000-15000 per month.

Situation:

Consider a small grocery store in a residential area of a city owned by Ms. Elena. This store is conveniently located for local residents, but it has a limited assortment and no automated customer service system. Ms. Elena often faces problems with inventory management and not serving customers quickly enough during peak hours.

Consequences:

Customers who came to the store during peak hours often faced long lines due to the lack of sufficient cashiers and an inefficient payment process.Many of them started visiting other stores where service was faster and more efficient. Also, due to irregular deliveries and lack of accurate accounting, the store often had shortages of popular products. This resulted in customers leaving the store for competitors when they couldn't find the right product.

Within a few months, Olena noticed that the average daily turnover of the store had dropped by about 20%. The analysis showed that the losses amounted to about UAH 10,000 per month, which was a direct result of the exodus of old customers and the failure to attract new ones.

4. Losses due to lack of loyalty programs

Failure to use loyalty programs and other means of attracting and retaining customers can lose you from 5,000 to 30,000 UAH per month.   

Situation:

Let's imagine a medium-sized clothing store, Fashion Podium, located in a shopping center. The owners of this store, Igor and Marina, have not implemented any loyalty programs for their customers. They believed that quality goods and pleasant service were enough to attract and retain customers.

Consequences:

Over time, Ihor and Maryna noticed that although their store had loyal customers, many of them did not make repeat purchases often. At the same time, competitors who had introduced discount programs and bonus systems were attracting more and more attention.This was because customers felt more valued and received additional incentives to shop at those stores.

During the year, Fashion Podium lost about 25% of its regular customers, which resulted in a decrease in monthly sales of about UAH 15,000. A comparison with competitors showed that the owners could have increased their sales by 10-15% by implementing loyalty programs.

5. Time and energy costs

Significant time and resources spent on manual accounting and audits, which could be minimized with the help of an accounting program.  

Situation:

Consider a small family-run grocery store run by Lyudmila and her husband, Andrei.The store keeps sales and inventory records manually, using paper logs and excel spreadsheets. Lyudmila spends about three hours each day processing the day's sales, keeping track of inventory, and preparing orders for suppliers.  

Consequences:

This approach takes too much time and physically exhausts the business owner. Liudmyla feels that she does not have enough time to analyze sales and plan strategies for business development, as well as for personal rest and family.   In addition, frequent errors in accounting lead to unnecessary purchases or shortages of goods, which causes customer dissatisfaction and reduces sales.

It is estimated that inefficient time and resource management costs the store about UAH 5,000 in lost profits every month, not including lost development opportunities and personal burnout of the owners.  

Installation of an accounting system

The cost of installing a comprehensive accounting system, such as Torgsoft, including equipment and setup, can be around 20,000 UAH. However, investments in such a system usually pay off within 2 months.

How the accounting system helps to increase profits

• Reduced theft and confusion: automated accounting significantly reduces the potential for fraud by staff. Efficient inventory accounting: precise control over product balances, avoidance of repeated purchases, and reduction of losses on unpopular products.

• Improving customer service: fast service at checkouts, reducing queues and increasing customer satisfaction.  

• Loyalty programs: implementation of discount programs and other means of attracting customers.

Consider the implementation of an accounting system as a necessary step to reduce losses and increase profits in your store. Get acquainted with the benefits of Torgsoft, download a demo version of the program or contact us for a consultation.

 Automation of the accounting system is critical for reducing losses and optimizing the work of the average store. Investing in such a system is an investment in the stability and growth of your business.