Questions And Answers About Automating Sales & Inventory with a computerized system.

Q - What are the benefits of computerizing a store or service shop?

Q – Is it best to start by computerizing only the accounting system then tackling the inventory control later?

A – Computerizing the accounting functions will have a very small impact on your profitability. In some very rare cases, it may even REDUCE your profitability, but that will be controllable by your using the system.  On the other hand, inventory is your number one asset (if in a service business even more important are your service personnel) and managing them well is a key factor to business success. In a service business, like auto service, it's absolutely necessary to survive, let alone make a profit. 

Some systems offer both inventory control and accounting modules but lots of successful retailers use completely different/unrelated systems for each one. This is because software that tries to do it all usually ends up doing some of it badly, and the few that don't do some of it badly, are extremely expensive. If you computerize your sales management and inventory control first you will get a much better return on your system's investment. Timely details about sales, inventory, invoicing, margins, orders and customers will help you earn more money than a new accounting system will save, if it saves anything at all.

Q – Is taking physical inventory counts any harder once a POS system is installed?

A – No, it can be done much faster and more accurately if the POS system can read data from a hand-held barcode reader available separately. These units are carried to where the stock is and the counts are scanned or punched in. They are later transferred to the computer by cable. The computer then pops up a table showing where the shelf counts do not match the computer data and gives you a chance to correct it quickly and easily.

Q – What are the advantages of having bar codes on all items?

A – Bar codes greatly increase the integrity of the CHECKOUT COUNTER point-of-sale transactions. If cash sales personnel have to enter a stock code for each of that type of POS transaction the chances of making mistakes are higher. Good retail management software should print bar code labels in two sizes and can automatically print a label for every item in the last shipment. 

Since the UPC bar code is industry assigned, you should use another bar code scheme for your own stock such as Code39. There is no problem associated with having UPC and Code39 labels in the same store because bar code scanners can auto-recognize which type of label they are reading.  It should be noted however, that barcodes in some smaller businesses will be more trouble than they are worth.  A good example of this is a SALES COUNTER/DESK type of POS situation where a full page sales order and/or invoice must be printed. 

Q – What reports should retailers look for in a sales and inventory system?

A – There should be a dozen to choose from, though most retailer use only three of four on a regular basis. Which ones you use will depend on the nature and style of your business. Better systems can limit the scope of a report to a given department, supplier, stock code range, date range, etc.

Q – Does entering a customer name and address take too long and annoy the customers?

A – It might, and it is important to be very sensitive to a customer’s reluctance, especially in a "quick service" business like a Quick Lube Shop.  We have many years experience in that exact business and have made our system absolutely as fast as possible to use.  One thing you can do, depending on the type of business circumstance, is to tell them it is needed it to be able to fulfill your warranty, exchange, or return policies. 

However, this information is so valuable that not trying to gather it at all may be a huge mistake. Statistics show that it costs ten times more to get a new customer into your store than getting an old one back. This kind of marketing has proven to be the most cost-effective way to drive up sales. Better software systems allow for a variety of customer data and mailing capabilities which can identify customers by purchase dates, items purchased, method of payment, and salesperson.

This is powerful information for the retailer/shop because it gives you the ability to target promotions where they count, measure advertising results, purge inactive names from mailing lists and do follow-up phone calls. Once people are in the system they do not have to be re-entered, but can be called up by name, phone number, company or customer number. A good system will also give you the option to avoid re-typing the city, state and zip code for every customer.

Q – With the price of computers coming down is it better to wait?

A – Hardware costs are falling, but as they do the retailer’s need for fast reliable information about inventory, orders, customers and accounts receivable is increasing. Delaying the POS automation process to save a hundred dollars does not make economic sense.

Q – How long does it take to get a point-of-sale system up and running to the point where a retailer can get meaningful decision-making information from it?

A – The setup phase (data loading - keying in) can be a huge headache if it is not properly planned and then rushed. Don’t decide on Saturday that the system has to be installed and fully integrated into the business by Monday. Allow a lot of time for you and your staff to get used to new work routines (work habits). It would be ideal to run the new system in tandem with the old one for a week or even a month or more, which we highly recommend. 

However, this is a luxury that many stores/shops cannot indulge in for very long. The POS/Sales Management System should start providing useful information about your inventory control and your customers after a month of full-time use. Actually, the best way for most small businesses to begin with a new POS/Sales Management System, is to just start off entering everything for the day, that day, as it happens (on the fly). 

Our system has been optimized to do that very thing.  Another good method of doing the initial setup phase for service type businesses is to spend some time going through the invoices and packing slips for the previous month or two and entering that information into the "master/control" files (Inventory, Customer, Categories, etc...). 

Q – How does a retailer choose between DOS and Windows POS software?

A – Windows may be what is most familiar to a lot people, and DOS still has an image of being complicated or unfriendly.  But to look more friendly, Windows had to be built using much more complicated processes, so it is sometimes slower and less reliable than DOS. This is sometimes apparent in a multi-user setup where DOS software running on a Novell network still does the work faster than Windows software on a Windows network. 

Our DOS systems are actually quite a bit faster for the fairly small business to use so unless you actually need the Windows system for some reason, look hard at the DOS system first.  Our DOS systems also have a similar look and feel to the newer Windows systems. 

Q – What are the year 2000 (Y2K) problems we are hearing about and how do they affect POS software?

A – Much of the software written before 1996 allocates only 6 digits for storing dates (MM/DD/YY). That means January 1, 2000 could be interpreted as January 1, 1900 and, as a possible instance for a problem, a POS system that encounters a credit card with an expiry date of 01/00 may reject it as expired. 

A year 2000 compliant system stores and displays all dates with eight digits (MM/DD/YYYY). Where space is tight on printed reports (and credit cards) a date may still appear with a two digit year, but this does not necessarily reflect the lack year 2000 compliance. Just check that all date prompts on the screen allow you to enter a four digit year.