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Scan-Based Trading

A Guide Scan-Based Trading Accounting Software

Learn how scan-based trading accounting software automates POS data sharing, pricebook maintenance and invoicing, so you can raise profitability with ease.


Today’s retailers in the food and beverage industry face a consistent challenge: maximizing their offered inventory, while minimizing inventory and carrying costs. Of course, these two goals fight each other, and scan-based trading (SBT) can be an optimal strategy for achieving success. In fact, major outlets like Dollar General, CVS, Walgreens, and Target already use SBT to stay competitive.

So what is SBT, and how does it benefit retailers?

Under traditional inventory models, retailers will purchase their inventory upfront from their suppliers. They then recoup their initial cost (and make a profit) as they sell goods to consumers.

SBT differs in that the retailer does not pay for products or have ownership of them until they sell, meaning they never have to recoup their costs; they only increase their cash flow at the point of sale. Put in its simplest terms, the supplier owns and is responsible for inventory until the point of sale. 

Benefits of scan-based trading include:

  • It reduces the retailers' financial risk since they only purchase inventory after it's sold to consumers
  • It eliminates the retailer’s risk of dedicating shelf space to new, untested goods
  • Suppliers gain more control of what product is sold at specific retail locations.
  • The combination of POS data with sales promotions helps suppliers identify consumer-purchase habits and tailor their marketing accordingly.

However, retailers aren't off the hook. They must collect and transmit all their point-of-sale (POS) transactional data (like dates, time ranges, and days of the week) to the appropriate supplier to maintain their pricebook. And they must self-invoice based on previous sales. This is difficult for retailers using legacy POS systems or struggling with data synchronization issues. Issues that have affected the adoption of SBT in many product categories. 

For retailers who want to take a step back from their SBT agreement knowing that their supplier has the accurate data they need, third-party scan based trading accounting software can take care of POS data sharing, price book maintenance, and even generating the invoices for retailers to pay. 

And simple, automated SBT agreements benefit retailers so much that many are updating their POS systems to improve data synchronization today.

The Need to Align Supply and Demand at the Point of Sale

Additionally, aligning supply and demand at the point of sale is essential to helping fast-paced SBT relationships generate greater results within the highly regulated food and beverage industry. When POS data sharing is poor, suppliers won’t know what’s selling well, hurting their performance and reputation. This, in turn, will hurt the retailer’s profitability if they’re losing sales as their customers face empty shelves, and may cause the SBT agreement to go sour.

Scan-based trading accounting software is designed to prevent this misalignment, meaning retailers can take a step back from inventory management without worry as suppliers are set up for success. 

How Scan-Based Trading Accounting Software Can Help

Scan-based trading accounting software reduces administrative tasks and improves logistics between suppliers and retailers buying on consignment. Here are just some of its core benefits:

  • Inventory management: SBT accounting software allows suppliers to view real-time sales transactions, delivery data and corresponding inventory levels, so they can become expert, preferred suppliers.
  • Eliminate inventory holding costs: Meanwhile, retailers can use the software to avoid holding in-store inventory, eliminate carrying costs and  enhance their store margins. 
  • Pricebook maintenance: Scan-based trading accounting software maintains the supplier’s set retail price when required so the retailer has the visibility to honor it accurately and all POS invoices remain correct. This enhanced collaboration als helps retailers gain real-time visibility for every product supplied, and they can work with suppliers more easily to set costs and product promotions.
  • Store operations: Outdated and labor-intensive procedures for pricing, markdowns, and price adjustments increase operation costs. Scan-based trading accounting software eliminates these procedures and significantly reduces operational costs. Retailers can save on staffing costs during delivery windows and process markdowns automatically at the store level.
  • Accounts payable: Retailers gain one single platform to not only simplify POS data sharing, but also pay and reconcile vendors electronically. Not to mention, this third-party platform will generate invoices for the retailer every time a product is sold. 

Simplify SBT with a third party, supporting and automating your process

Consignment trading is revolutionizing the retail industry. And scan-based trading accounting software can help retailers gain the transparency and automated processes they need to truly take a step back from their inventory strategy and let their suppliers take control with full support. The result is they both increase their profitability with less time and effort.

Want to learn more about how scan based trading accounting software optimized these inventory arrangements and data sharing?  Check out one of our latest blogs.

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