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Monday, July 21, 2008

Exact Change! - Register Procedures

Every penny counts, and that is a fact. A penny per customer, per day, adds up to $182.50 loss per year; assuming 50 customers per day. If your company is lucky enough to earn 10% profit per year, that means you have to sell $1,825* worth of products to get back your one penny!
Giving and receiving exact change at the register is imperative. Admittedly, it can be easy to let a good customer ’slide’. But, if done consistently, this laissez-faire attitude can lead to debilitating losses. Fortunately, this is a hemorrhage that can be fixed. Remember that every penny counts and treat the register cash like it is your own. You must respect the money. Also, when dealing with money, annualize** your expenses to see the bigger picture.
*Calculate the ‘real’ cost of an expense as a function of profit; this will help you see the bigger picture. If you really want to get profound and depressed, calculate the opportunity cost of that $182.50. If you buy and sell that six times over the course of a year, assuming a keystone markup, that is $11,680! Every Penny Counts!
**Annualize: calculating expenses on an annual basis. Annualizing expenses for management and perspective purposes helps everyone in the organization see the value of not wasting, cost management, and being efficient. A dollar an hour for a full-time employee is $2,000 per year, or $20,000 worth of sales if you make 10% profit!

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