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5 Ways To Reduce Risk In Your Retail Business
Retailers are feeling the need to reduce operational and financial risk wherever possible in order to remain competitive in the coming years.
For retail businesses today, competition is higher, profit margins are narrower, and customers are more informed than ever before. Consequently, retailers around the world are feeling the need to reduce operational and financial risk wherever possible in order to remain competitive in the coming years.
The good news is that, for most retailers, there are a lot opportunities for risk reduction—if you know where to look for them. Let’s look at five ways retail businesses can reduce risk through better management of their inventory and finances.
1. Reduce Or Eliminate Cash Handling
Cash handling constitutes a much higher risk than electronic payment methods. Where possible, replace in-store cash payment options with electronic ones, or consider offering an incentive for shoppers to use an alternative. Obsolete cash payments like cheques are both a security risk and a logistical hassle for retailers today, so consider withdrawing support for cheque payments altogether.
2. Digitize Payment Processes and Invoicing
There’s a lot of opportunity in the customer-facing side of your business from going digital with payment processes. However, there’s plenty of opportunity for financial loss further up the supply chain, too. Forgetting to sign checks, incorrect cash counts, invoicing errors and sloppy inventory management can all have disastrous consequences for your business. Digitizing these processes does away with the challenges by giving both retailers and suppliers a holistic view of their stock and cash-flow data, and automating tasks that can be vulnerable to human error.
3. Improve Inventory Management
Keeping up-to-date with the state of your inventory is vital for preventing risk and loss in your business; the more often you take stock, the better informed you’ll be. You shouldn’t only be counting stock at arbitrarily-defined dates or after deliveries, either. Proactive stocktakes help you identify discrepancies well in advance, and ensure that you always have a realistic idea of your financial situation. Implementing an electronic inventory management system mitigates much of the heavy lifting required by your team and eliminates any chance of human error, which itself translates into reduced financial risk.
4. Set User Permissions On POS Systems
Most Points of Sale (POS) systems allow you to set user permissions to ensure that only staff members with appropriate access can carry out certain tasks. Depending on the way your business operates, it might make more sense to create permissions on an individual level (based on the tasks you want each team member to carry out) than to assign blanket permissions based on job titles.
5. Consider Scan-Based Trading
To manage stock costs more efficiently, an increasing number of retailers are moving towards scan-based trading. With scan-based trading, the supplier has full ownership of all products until they are scanned out during a sale, but all stakeholders have access to a centralized repository of inventory information that updates in real time. And, because all this information is stored in a secure cloud server, anyone with the right permissions can access it from anywhere with an internet connection. You can read more about how scan-based trading benefits operational efficiency and financial accountability in one of our previous blogs.
To find out more about how you can reduce the risk that your business faces with effective B2B payment processing technologies like mobile payments, scan-based trading, and more, visit our mobile payments solution page at the link below.