Retail System Integration Basics: 3 Finance Touchpoints That Matter
Last week, we talked a little about systems and some key points about systems that help you know if you have a 'good fit'.
Integration can be a messy business to understand, and sometimes even when you think the system is ONE, it turns out that it isn’t really.
Essentially, when making recommendations about systems, we like to start with financials and reporting and work backwards.
After all, if you want to get information out of the system, you’re going to have to put it in first.
The Three Financial Touchpoints Every Retail System Must Get Right
Whether you are starting out or have been trading successfully for a while, there are 3 key items that make all the difference in a retail business. If you don’t have a good grip on them, then you’re working in the dark.
They are:
Sales (money in the door)
Purchases (money out the door)
Inventory (money that has been paid but you don’t have the return on yet)
At the most basic level, if we were starting a clean slate today with a brand new business, these three elements should be connected to the accounting system and available for daily reporting.
Where Integrations Break Down as Businesses Grow
Sometimes this is because, over time and as the business has grown, each part that is growing has been addressed on its own rather than as a whole.
It’s difficult to remember to stand back and look at the whole picture at each stage of growth. In a review that we did recently, a key issue was that sales and purchases were not connected to the financial heart of the business in real time.
The integration of information was not complete, and these critical points were missing from the financial system.
This meant that the finance team were way behind in terms of what the business people had committed to, and the business people were labouriously trying to manage cash flow in spreadsheets as well as do their own jobs.
So much of what this business was struggling with came down to visibility between disparate systems.
People were all making incredible efforts to keep information between systems in sync and moving, but the more energy anyone puts into this, the less time they have to do the job they are supposed to be doing.
The Operational Tipping Point When Systems Don’t Talk to Finance
For people, there is usually a tipping point where we just get fed up with systems that don’t support being able to get on and do a good job and what you’re supposed to be doing.
Teams start to lose their mojo when they have to work like this for extended periods of time, and the effort required to run a business when all this additional work is required is tiring.
If you’re feeling tired or like you’ve had enough of systems not connecting, we can help.
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