It's a peak time for retailers - Christmas! This means high footfall, large stock orders, and a very busy time for the finance team who could benefit from retail finance software to automate much of the processes.
If you want some statistics, the National Retail Federation published its 2024 retail sales forecast and highlighted a potential 2.5% - 3.5% increase this Christmas compared to 2023.
The holiday season can pile additional stress onto your team. It requires ordering more stock, processing more invoices, managing more supplier relationships, and doing more due diligence. Getting prepared will make a busy few months less daunting and put your team in a strong position for future peak periods.
Let’s explore the 4 most impactful tactics that will help you tackle retail challenges and thrive during the holiday season.
The 4 Tactics to Use with Retail Finance Software
The 4 Tactics to Use with Retail Finance Software
1. Make your manual processes redundant
Seasonal fluctuations often create an additional workload for your finance team. An influx of supplier paperwork and payment requests can be stressful. It may require hiring temporary staff to help manage the responsibilities, but this can be time-consuming with recruitment and training. Not to mention the extra costs that eat into your peak period profits.
More staff also means a higher risk of data errors occurring. Research has shown that up to 4% of data entered manually can be incorrect. How would this impact your day-to-day processes and future analysis?
Moving to retail consumer finance software makes manual processes redundant and eliminates your accounts payable challenges.
Since introducing AP automation, retailer Flinders General Store was able to relieve its finance team of 97% of manual tasks. Data extraction, instant bookkeeping and automated statement reconciliation are just some of the ways the team streamlined invoice processing.
Automated extraction gives you as much detail as you need, including product codes, quantities and descriptions, without any manual intervention. The system can also group data based on your tracking categories and GL codes for a clearer overview of spending.
Bottom line? Seasonal peaks don’t need to be daunting. By removing mundane tasks, your team can focus on the things that make an impact, like negotiating with suppliers or analysing data.
2. Safeguard against fraud
2. Safeguard against fraud
2. Safeguard against fraud
Entering your busiest season yet, your finance team is juggling invoices and demands. This is a prime time for fraudulent activity as lots of purchasing takes place in the lead-up to Christmas. Staff are often distracted, and due diligence is more slack than normal.
According to theACFE report, this type of fraudulent activity has cost businesses up to 5% of their annual revenue.
Providing a solution that helps to remove this threat is one more thing that your team doesn’t need to worry about. Putting automated checks in place to detect bank detail discrepancies will flag issues before they become costly mistakes.
Alongside bank detail flagging, AP automation delivers other features that make detecting and preventing fraud easier for retailers:
- 3-way matching — perfect for busy retailers handling fast-moving stock. It automatically cross-checks invoices, purchase orders, and goods received notes to confirm that what you ordered is what you received and what you are paying for.
- For added security, email domain authentication ensures only legitimate invoices make it through. This blocks fraudulent third-party submissions, allowing only trusted, verified emails to reach your finance team.
3. Avoid gridlock to keep sales flowing smoothly
3. Avoid gridlock to keep sales flowing smoothly
3. Avoid gridlock to keep sales flowing smoothly
Rising costs, tight timelines, and late payments can strain supplier relationships—leaving you with empty shelves and disappointed customers. Keeping suppliers happy is crucial to maintaining a steady stock flow, and AP retail finance software is your secret weapon.
With auto-routing workflows, invoices are automatically sent to the right people for quick action. Flinders General Store applied this feature in their AP processes and reduced the 5-day approval time to just 1 day!
Faster approvals can help you negotiate better pricing and terms with suppliers, ensuring you’re getting the best deal and more payment flexibility when it comes to your busy periods.
Automated reconciliation of supplier statements instantly alerts your finance team to any missing invoices. Within 2 clicks you can request invoices, avoiding payment delays and disgruntled suppliers.
It’s a smooth, efficient way to keep shelves stocked, payments timely, and supplier relationships strong during peak holiday times.
4. Supercharge Your Profits Through Data
4. Supercharge Your Profits Through Data
It’s about working smarter, not harder.
Reporting capabilities turn data into profit-driving strategies. It highlights your best-selling items by analysing previous orders and invoices helping you optimise stock selection coming up to peak season.
Track supplier price changes to ensure you remain profitable. It’s well-known that suppliers use dynamic pricing strategies, specifically in the lead-up to busy trading seasons. This can result in a loss of profits if your team aren’t alerted to price rises. By flagging changes, you can react quickly to maintain profit margins.
Harnessing data segmentation will skyrocket your profitability and drive success during peak trading times. You can gain insights into the most popular stores, best-selling items and overperforming departments. These findings aid in future decision-making to achieve success and fuel growth.
Takeaways
Takeaways
How optimised are your processes coming into the festive season? For retailers, seasonal fluctuations are common. Implementing these 4 tactics now will benefit you not only during the Christmas rush but for all other peak periods throughout the year. Establishing a smarter way of working encourages your team to take on more influential tasks that drive success and have recognisable impacts on the business.
1.
Automate your data entry and fraud checks for better security and the ability to process paperwork faster.
2.
Suppliers are your backbone to smooth operations. Keep them happy with faster approvals and payments.
3.
Data is king. Don't neglect the numbers. They will help you form strategies to dominate every season.
Other resources
CASE STUDY
How The Reddrop Group Saved 40% on Accounts Payable Monthly Costs
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Join our live webinar to see how Lightyear works to enhance AP processes across your business
