Most shopkeepers know exactly what they sold today. Far fewer know what they earned on it, and those are very different numbers.
Sales tells you how busy you were
It is the number everybody quotes and the least useful one alone. A day of high sales on low-margin lines can earn less than a quiet day on good ones.
Useful as a trend across weeks. Not useful as a measure of a day.
Profit tells you what the day was worth
Sales minus what the goods cost you. This is the number that pays the rent, and it is only as accurate as your purchase records, which is one more reason to keep them.
Watch the relationship between the two. If sales rise and profit does not, something in your pricing or your discounting has moved.
- Sales for the trend, profit for the truth
- Watch them move together, or notice when they do not
- A busy day that earns less is worth investigating
Cash in hand tells you whether the till is right
What the system says should be in the drawer against what is actually in it. A small difference is normal. The same difference every day in the same direction is not.
Check it at closing, every day, while the day is still recoverable in somebody's memory.
Receivables tell you what you have not been paid for
A shop can post a good month on paper and have none of the money. Credit given today is profit recorded today and cash arriving later, or not at all.
Look at outstanding by age, not as one total. Rising ninety-day debt is the earliest warning a retail business gets.
Four numbers, two minutes, every evening. It is the difference between running a shop and being run by one.
