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Merchandising is used to refer to the activities that a retailer carries out, which involves a process of preparing, displaying and selling his products to customers. Merchandising involves an attractive display of goods. The act of displaying merchandise is utterly important as it attracts customers to purchase the items. However, there are risks that may be incurred in a business, due various factors.
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Risks to Merchandising
Bearing the fact that any business venture has a probability of failure, where the profits generated from the sale of merchandise is below the costs of production and merchandise promotion, and then such a merchandising venture is doomed. There is also the risk that highly incurred cost of products that are created at the retail level, their cost of promoting and also selling such goods means an added expenditure that may not be budgeted for.
Minimizing the risks
To minimize such loses, it is imperative that there is cost cutting in production or make do with the available resources. Care should be taken when calculating the expenditure to be used in merchandising and the expected revenue to ensure that the business does not fail. Promotions should be made as cheaply as they can be by utilizing local means.
Automation and its Impacts
Automation of accounting is a system of maintaining updated records of account using accounting software. Automation of accounts has had positive impacts in that it allows for ease in accounting duties such as the elimination of multiple postings in compliance, as records are consolidated. It also enhances cross posting of receipts and payables, making the process efficient. In comparison with manual accounting record keeping, automated accounting is time effective, for instance, only one transaction entry is made but the software updates all other reports. It is advantageous mainly in posting of credits and debits of the business. Automation also reduces embezzlement of business funds from within, as some systems have detection mechanisms such as automated audit.
A corporate policy to stop inventory shrinkage
To curb the issue of inventory shrinkage, all employees and third parties should be aware that all parts of the business premises are installed with cameras. Only designated employees are allowed into the stock room unless one has authorization. None of the merchandise shall be left unattended at any one time. Each and every day’s transaction shall be scrutinized for accuracy and all persons leaving the building shall be subjected to electronic searches,
Implementation of the policy
To implement this policy, it is imperative that the cameras are properly installed and are working. There is to be a select of employees who are designated to enter into stock rooms, and since searches are electronic, all items have been electronically coded.