If you have a cash register, there is an inherent liability that goes along with it: the cash could disappear. When money is changing hands, there is a higher risk of both theft and mistakes. That is why having a third-party review your bookkeeping is invaluable to business owners.
By having a point of sales (POS) system recording each transaction, you can have peace of mind that, yes, this is how many sales were made and here is the money in the register to prove it. Tracking the sales and comparing your cash deposits is a way to make sure that your employees aren't stealing from you.
Having unbiased sales reports on the back-end is the best way to track what's happening in your store front.
1. Don't Waste Your Time
There are many ways you could track your daily sales activity. You could keep a running spreadsheet of the reports and update it every time a register closes out. But what happens when you want to pull a cumulative report to see how much sales tax was collected?
Yes, there are ways of keeping track of your daily sales without investing in a POS system. But based on my experience of aiding a client through a sales tax audit, their POS system was priceless. Its ability to quickly pull any reports for a date range is unparalleled when compared to making the reports yourself. Even when you are proficient at using Excel, the work required to compile reports and create V-Lookup tables by hand takes time that you should be spending on growing your business.
2. Automation Prevents Mistakes
There is too much human error to account for in a reporting process that isn't automated. Whether it is an Excel formula that got altered accidentally, a sale rung up after the register was closed (which requires you to try and figure out the over & short by hand), or the numbers that were simply mistyped, the accuracy of your reporting is too important to leave to any one person.
No matter how hard we try, there are going to be mistakes. So if you are still hand-keying information into a spreadsheet, you should stop now because in the end, it will take more time and effort to fix your mistakes than if you had invested in a POS in the first place.
3. Daily Updates On Revenue
Recording income on a daily basis through daily sales entries is a way to get a snapshot of revenues in an instant. Your data is not 100% accurate by nature, but you can get a rough estimate of where your current revenue stream is in relation to your goals.
With the option of being able to check in on your progress, patterns in the cash flow could be recognized more easily.
4. Prevent Problems Proactively
If you have the opportunity to notice patterns, you could be able to pinpoint areas in the business that need attention. Being able to see the patterns in the day-to-day activities as they occur could give you the information you need to proactively handle potential issues rather than waiting for real problems to materialize.
Why POS Systems Are Worth The Investment
Overall, POS reporting is the best way to get an unbiased report on what is happening at the cash register:
- If there is something fishy going on, you will know, because verifying the report versus what hit the bank is one of the most effective controls on cash.
- POS reports save you the time and money you would otherwise waste going back to fix the mistakes that someone made hand-keying the information into a spreadsheet.
- You have up-to-date information on your cash flow, which gives you an opportunity to see how you are measuring up to short-term goals, allowing you to address problems as they arise, rather than after the fact.
If you have the tools to assess where you are in relation to your goals, then that is the first step of keeping your business on track.