Start your store review with financial metrics, stock levels, discount economics, and task completion. Separate sales, cost of goods sold, operating expenses, and cash movements. Check stock before purchasing, and calculate the reduced-price economics before a promotion.
Choose the mistakes below that apply to your store. Assign an owner to each, define the expected review outcome, and agree when you will discuss it.
1. Calling revenue profit
Gross revenue is the total amount from selling goods and services. Gross profit is calculated as revenue minus the cost of goods sold. Label these metrics separately in your own spreadsheet. When reviewing sales, show the cost of goods sold for the same period alongside them.
2. Not checking operating expenses
Operating expenses are day-to-day costs directly related to running a business. Make a list of them for the period you choose. Keep an explanation and supporting documentation for each amount. Review these expenses separately from the gross profit calculation.
3. Not tracking cash movements
A cash flow statement shows cash inflows and outflows over a period. Keep a separate list of actual receipts and payments. Before placing a new order, compare available funds with planned payments. In your plan, mark expected amounts that have not yet arrived separately.
4. Not reconciling records with the bank statement
Bank reconciliation helps check whether accounting records match bank statements. Choose the same period in both sources. Match transactions, list discrepancies, and check each one. Do not change a record just to make the totals match.
5. Planning a purchase without checking stock
Before deciding to replenish stock, count the selected items and compare the actual quantity with the recorded quantity. Check the data first for items with discrepancies. The section below explains how inventory counting in Torgsoft compares actual product quantities with recorded quantities.
6. Setting a reorder point without accounting for lead time
When setting a reorder point, account for lead time, expected demand, and the target safety stock. Gather this data for the items you plan to replenish. Review the threshold when lead time or assumptions about demand change.
7. Using past sales in a forecast without checking them
Demand forecasting draws on seasonality, promotions, stock levels, and market trends. Before purchasing, note which of these conditions affected the previous period. Record which conditions you expect going forward, and review the forecast once actual results are available.
8. Reordering slow-moving goods without analysis
Money tied up in slow-moving goods could have been invested in more profitable stock. Before reordering, review the quantity of these goods and their sales over the period you choose. Decide separately for each item whether replenishment is needed and what data supports the decision.
9. Setting a discount without calculating its effect
Before launching a promotion, calculate gross profit at the regular and discounted prices. Use the cost of the specific goods you plan to sell. Record separately the expenses planned for running the promotion.
Hypothetical example: the same number of discounted sales
Suppose the cost per unit is 600 UAH, the regular price is 1,000 UAH, and the promotional price is 900 UAH. In both cases, the store sells 10 units. All figures are hypothetical.
| Metric | Regular price | Promotional price |
|---|---|---|
| Revenue | 10,000 UAH | 9,000 UAH |
| Cost of goods sold | 6,000 UAH | 6,000 UAH |
| Gross profit | 4,000 UAH | 3,000 UAH |
Under these conditions, gross profit decreases by 1,000 UAH. The example does not include operating expenses or forecast the number of sales during the promotion. Use your own data before making a decision.
10. Evaluating a promotion by revenue alone
Evaluate the effectiveness of discounts by additional profit, not only by revenue growth. After the promotion, check actual sales, cost of goods sold, and the expenses of running it. Choose a comparison period and note differences in conditions, including seasonality and product availability.
11. Assigning a task without resources or instructions
Delegation involves providing resources, instructions, and support to achieve the expected result. When assigning a stock check or purchase preparation, describe the result you want. Provide the necessary data and agree on whom to contact for help.
12. Not checking the result of a delegated task
Effective delegation requires oversight. The person delegating remains responsible for the result. During the review, look at the prepared list, calculation, or reconciliation. Discuss unresolved questions and determine the next steps.
13. Making decisions based on one unchecked source
Other data sources can be used to confirm the accuracy of the primary source. For an important decision, choose a verification method, such as a physical stock count or a bank statement. If the data differs, check the discrepancy before approving a purchase or financial calculation.
How to check actual stock in Torgsoft
To check product quantities, use inventory counting in Torgsoft. It compares the actual availability of each item with the quantity in the records. The owner’s task is to organize the count and review any discrepancies found.
Use the comparison results as a basis for further stock checks before purchasing. Determine the cause of each discrepancy separately. To decide on the order quantity, also check the demand forecast, lead time, and target safety stock.
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