Financial Control For Physical and Virtual Stores: the Definitive Guide

Financial control in physical and virtual stores is a key piece in the gears of any trade. When this part of the business is neglected, all indicators can suffer.

So, the question is: how is financial control in your company? Do you dedicate all the attention necessary to ensure not only the sustainability and viability of the business, but also the improvement of results, the multiplication of sales and the expansion of sales?

This type of control helps the entrepreneur identify the critical points of his or her business and where are the aspects that need immediate adjustments. It is, as you can see, also a diagnostic tool, which is always so relevant for every type of company.

Thus, the internal processes are optimized and refined for the decision making that will determine the success (or failure) of the company. In theory, everything very beautiful. But in practice? Let's talk about it?

Importance of financial control in physical and virtual stores

Often retail financial control ends up being overlooked by many business owners as it is not considered an easy task . But will it be that hard? It's time to face the problem head-on.

In fact, this is one of the biggest challenges of the business . And also one of your great needs. This difficulty drives some retailers to navigate without a compass, to manage in the dark, without understanding the past or projecting the future.

Not by chance, it is in this scenario that rises the risk before any economic storm, reducing the possibility of anchorage in a safe harbor.

The main problem in trying to make financial control viable is the huge amount of variables and factors that need to be monitored. From the outside, it may seem simple: just increase the number of sales, correct?

Selling more does not mean, by itself, an improvement in the financial health of the business . After all, what is the point of raising revenue by 10% if, for that, spending increased by 12%. Makes sense? No, it does not.

And reduce the amount of products stopped in stock ? Although the spin is positive, this measure can not be analyzed in isolation. After all, getting rid of goods without planning does not prevent losses and is not even guaranteed to soften them.

Although we may find objections in all actions, it does not mean that there is no way forward. And what this guide proposes is just think of the solution from financial control to retail and e-commerce .

This strategy must be precise in the details (with exact notion of each of the factors), but it can not be neglected of the conjuncture of variables that form the skeleton of the business.

5 key actions of financial management in stores

These actions should be part of the financial planning and day-to-day management of any retail company:

1. Cost control

The cost control  allows the monitoring of money spent by the business, identifying whether it is being applied in an efficient manner or without significant return.

2. Internal audit

Performed by the accountant (own or outsourced), this process consists of examining the accounting information of the company, seeking to identify if the management is adequate or if the practices need to be modified.

3. Cash Flow

It is the responsibility of the manager to monitor his / her revenues and expenses on a daily basis, including accounts payable and receivable, considering the fixed and variable costs of the business.

4. Balance Sheet

The balance sheet reveals the company's net worth, which represents the difference between assets and liabilities.

5. Bank Reconciliation

It is nothing more than a comparison between inflows and outflows of cash with the financial movement in the bank.

Posted on June 26, 2018 at 08:15 PM