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Retailer's PROFIT FINDER

Are your profits hiding in plain sight?  Here's how to discover them. 

Use "buckets" to cluster them and consider "what if...?"

The typical accounting package lists expenses in alphabetical order. From Advertising, to Auto Expenses, then Bank Charges, and so on. Lines and lines of separate expense items, all detailed to the penny. How useful is that?!

Is this designed to inform? Or, to confuse and confound?  No wonder few retailers will spend much "quality time" with their financial statements.

But, there IS a simple trick that will let you make sense of all that data: simply re-organize the individual expenses on your P&L into 5 "buckets" of expenses.

That simple step transforms all that accounting data into management information. At The ROI, we call this process the PROFIT Finder! 

"Buckets" Make Expense Management Easy and Fast

Whether you are analyzing your expenses, or projecting a "What would happen if I...?" scenario for your business, it is more useful and insightful to group all the line-item expenses into 5 major categories, or "buckets". 

By grouping expenses into these "buckets", you immediately turn your P&L data into management information.

Now, it becomes easy to:

•  monitor expenses;

•  make comparisons to prior years;

•  quickly spot which buckets of expenses are increasing. 

Very quickly, you know where to focus to control expenses...and improve profits!

One-Time Set Up - Works Forever!

Best of all, setting up your P&L to include these buckets  only needs to be done once. Once set up, it just cranks out the numbers in a way you actually can use.

Free, Fast-Track Answer

What's that? You've not yet organized your Profit & Loss Statement into these useful categories for analysis and planning? 

Not to worry! Here is a fast-track solution for you. Go here to use The ROI's Retail Expense "Bucketizer." It's free!

Retail Expense "Bucketizer" 

 

17 OCT
2018

What EXPENSE BUCKETS to use?

0

What "buckets" to use?

Variable expenses are a percent of sales, so their dollar amount varies each month as sales increase or decrease. The major variable expense for retailers is Selling Expenses. 

Selling Expenses - Variable expense
Examples: Store payroll, including taxes and benefits; Advertising; Bags & boxes; Special events; etc.

Fixed expenses have essentially the same dollar amount each month on average, no matter what sales are. There are 4 categories of fixed expenses:

Occupancy Expenses - Fixed expense, essentially flat $ amount each month
Examples: Rent; Utilities; Maintenance; Security; CAM charges; etc.

Administrative Expenses - Fixed expense, essentially flat $ amount each month
Examples: Management salaries (Owner; General Manager; Buyer) including taxes and benefits; Support staff/services (bookkeeping; IT; warehouse; marketing); Interest on borrowed money; Professional services (legal, accounting); Training; Travel; All other expenses not included elsewhere.

Taxes - Federal, State, Local taxes not included elsewhere.

Depreciation/Amortization - Fixed expense, essentially flat $ amount each month.
These are non-cash expenses, and must be kept separate in order to project the Cash Flow.


 

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