We work with all types of businesses here at Shopventory. Restaurants, retail outlets, liquor stores, wine bars, nonprofits, bands on tour and even medical practitioners and lawyers. If you name a business type, we’ve worked with it!
The Shopventory Onboarding Team has a blast getting to know these businesses the minute they sign up for a 30-day free trial. Each business is incredibly unique and we love spending time making sure that Shopventory is structured to help them crush their growth goals.
Although each business is different from the next, we’ve noticed they have similar “Aha!” moments when starting with Shopventory. This is what we’re going to focus on here: The “Aha!” moment when a new customer says “So that’s why my sales reports are all messed up!”. It comes down to how you, and Shopventory, track your Cost of Goods Sold.
“The “Aha!” moment. It comes down to how you track your Cost of Goods Sold.”
I distinctly remember one business I was working with, a unique jewelry and accessories store using Shopify and Clover (since we connect the two). We had a great call. There were four people from their side on the phone with me - the CEO, inventory manager and a couple marketing/sales team members. Most of the conversation was around how Shopventory is going to automate and free up the time of the inventory manager, Steven. There were even some jokes thrown in about how Steven might need to start looking for a new job. What a fun group of people!
After I spent some time explaining how Shopventory tracks COGS and accurately applies those numbers to revenue figures, Steven made an off-hand comment that really stuck with me. As the title of this post suggests, he said, “So that’s why my sales and profit reports are all messed up!”, and he was exactly right. Here’s why:
“This can be very dangerous though and affect the sales/profit figures in massive ways.”
Steven and his team had no way of tracking changes in COGS over time. What they were doing is what so many of our customers do before using Shopventory. They were simply changing the COGS number in their POS/spreadsheets whenever they received a new batch of product. This can be very dangerous though and affect the sales/profit figures in massive ways.
If you are simply changing the COGS number when you receive a new batch, you are not accounting for the previous batch that is still selling through with the previous COGS. This will cause your profit to be heavily skewed too high OR too low and you probably won’t even realize it!
When you order a new batch of product with a new cost, you need to enter the new cost while retaining the old cost to the old batch/batches of product. This is called Lot COGS Management.
What this will allow you to do is pull a sales/inventory valuation report from any time period and be sure that the profit/value data you see is accurate to the penny. It’s not easy to manage and might seem daunting, but this is what Shopventory specializes in.
Shopventory provides you with reports you can trust.
The Shopventory Team wants to help you use reporting accuracy like this to successfully grow your business and ensure it stays healthy! As I’m typing this here in Denver, we’re seeing our first snowfall of the year, which means the holidays are coming fast! There’s no better time to get your inventory management straightened out than right now before the December rush
For the love of reporting,