J. C. Penney Gift Certificate Concerns
J. C. Penney Firm, Inc. has recently introduced a new point of sale (POS) system manufactured by NCR Company into their retailers. In the initially six months of operation, it is now apparent that you have unanticipated issues with the accounting and control functions associated with gift certificates. The new Pos software does not give adequate tracking or charge of the accreditation on the revenue floor, store level product sales audit offers inadequate methods or data capture capabilities set up to track product sales accurately and assign responsibility for lacking certificates, and company accounting has no control over the gift license accounting within the store level and are continuously struggling to reconcile gift idea certificate data.
Problems within the Sales Floors
At the DETRAS terminals around the sales floors, gift accreditation are becoming stored underneath the cash register in a drawer without having security or control. The safety and control of gift certificates has been overlooked during the creating of the procedures for the brand new POS system. As a result, the security and control about gift records on the sales floor that had been in place with all the old program has basically stopped. Staff are purely on the “honor system.
The moment sales associates ring up a gift license sale they have to key 1) the appropriate twelve-digit SKU via a list of 3 choices, and 2) a dollar value for the gift certificate shown on the face. For example , SKU #1 symbolized the $25 gift qualification, SKU#2 displayed the 50 dollars gift certificate, and SKU #3 showed the $22.99 gift certificate. After the sales transaction is definitely complete, the sales associate must manually record the buck value of the gift qualification on their money audit statement. During times of substantial volume, at times this last step is definitely overlooked.
Typically, the cashiers are just keying SKU #1 for any present certificate deal and keying in the suitable dollar value from the face of the gift license. The SKU’s are not in electronic format tied to a dollar worth. This is a limitation from the previous Pos software that has not been addressed throughout the testing level of the fresh system. Consequently , the mistake rate is incredibly high and discrepancies in gift certificate sales are common. At the close of the change, an electronic cashier report is definitely generated within the register that just shows a total amount tied to a SKU. This kind of electronic cashier report is definitely returned to the cash space along with the invoices and the hand-written cash examine report.
Problems in Store Level Sales Audit
When the funds audit report comes back to the office with the tote of receipts and the electronic cashier survey, calculations happen to be performed on the manual cash audit report to identify how much gift records sold. This is compared to the digital cashier statement. If you will discover discrepancies, revenue audit sales person are required to utilize electronic cashier report as the “correct report pertaining to auditing uses. The amount of the present certificates distributed is upon a monthly gift certificate log and a new running regular monthly balance is usually calculated. Any kind of new present certificates received from the corporate office will be recorded on an additional log and the acknowledgement of receipt (from inside the book) is authorized by a member of management and returned to corporate accounting. At the end of the month, records of present certificate statements (disbursements from corporate), data of gift certificate sales, and other accounting records are forwarded to corporate accounting for verification after an effort on the shop level pertaining to reconciliation.
Challenges in Company Accounting
Shop managers are responsible for dialling and permitting a book of gift certificates to be distributed for their store. When this occurs, the gift accreditation are recovered from the burial container, the publication number is definitely logged, and the dollar value of the publication is tentatively charged to the store. When the acknowledgement of receipt through the store is usually received, it truly is compared up against the store’s records, the fee for the gift records is verified, and then the acknowledgement can be filed away. Once a month, corporate and business accounting acquire sales taxation information through the stores and attempts to reconcile, nevertheless typically have zero better luck than the retail store level audit clerks.
Research of Problem
It is very apparent that there needs to be a drastic change in the J. C. Penney gift certificate traffic monitoring procedure coming from corporate accounting all the way to the sales floor. Lax security and control, poor procedures, and inadequate assessment of the hardware and software involved has established a very unpredictable situation with potentially huge ramifications. With no quick cure, potential monetary losses could be staggering. In looking at this kind of project, it is important to prioritize the underlying problems that are creating the unstable environment. Areas that need to be dealt with are stage of sale, sales audit, and corporate accounting respectively.
1st, and perhaps the most crucial, is to check out your revenue floor and gain charge of your gift idea certificates. These items are the same because cash and should be cured as such. Gain immediate control of your DETRAS to track product sales and create accountability. Change your POS, Sales Audit, and Corporate Accounting Procedures to implement securely coordinated handles over the deal, sales taxation, and accounting functions. Second, the insufficiencies in the software and hardware need to be tackled. Can minor changes in the setup of the components or minor changes in the software code eliminate potential methods of shrinkage? If not, can there be adjustments made to the gift certificate design to assist eliminate shrinkage? Maybe it might take a combination of both. A particular audit trail of every deal is a need. Give yourself the ability to audit each register transaction by simply transaction.
When control is definitely achieved for the sales flooring, the majority of challenges in the backside office product sales audit location will take care of themselves. It truly is imperative, nevertheless , that a restricted control about cash, as well as, gift certificates be maintained. When looking at possible hardware and software modifications on the revenue floor, be sure you keep in mind that the spine office sales audit place might benefit from having the ability to look at information in real time.
After targeting the back business office sales audit area and obtaining them lined out procedurally, things should also begin to shape up in the corporate accounting location. If the methods pertaining to gift idea certificates upon all three amounts have been coordinated, cooperation involving the different amounts will be simpler to foster. The gift qualification area of corporate accounting should only be in the industry of acquiring and dispersing gift records to retail stores, verifying revenue audit info pertaining to the certificates, and reporting to upper administration and other areas, information concerning gift qualification sales and redemption.
Following reasonable control over the immediate economic instability continues to be achieved, give attention to each individual level that has been determined in the purchase of importance much more detail. Initially, the focus needs to have been in creating several security and control, crystal clear lines of communication, steady procedures and definite examine trails. Right now the focus should be in minute parts of each part of distress and priorities should be established to deal with those things.
In the point of sales area, the typical idea is definitely “the less difficult it is, the harder you should make a mistake. The whole POS procedure should be analyzed in its whole to identify any kind of areas that can be streamlined. In fact, the shorter the line is usually, the happier the customer is. Can virtually any changes be made in hardware or software configurations that will speed up the method? In this case, an alteration in computer software code coupled with a change inside the design of the gift accreditation to incorporate bar codes that tied a SKU number and a dollar value would certainly manage to make a massive difference around the error price and generate sales examine on the store level plus the corporate level much easier. The amount of keystrokes necessary per purchase on the sales floor could also be reduced with this change. The use of real-time POS information would end up being beneficial to retail outlet management and also management around the corporate level.
For a store level sales audit man or women, the sales audit process should be analyzed to see if software code adjustments (already suggested for POS) could be modified even further to automate the sales review procedure in which gift certificate information might simply be verified on the retail store level and passed on in electronic format to the corporate office removing the manual accounting. Getting new present certificates around the store level would be a straightforward matter of scanning the new publication verifying invoice. No more manual logs.
Around the corporate accounting level, there would be very little paper generated through the sales taxation process. Procurement of present certificates could be enhanced lowering the on-hand inventory of gift records because administration would be able to set up trends in gift qualification sales and order accordingly. Security and control would be significantly enhanced, and, theoretically, every gift certificate in circulation could possibly be tracked individually allowing the business to know, at any moment in time, their particular gift certificate liability.
The important thing to remember as you tackle problems, regardless of the type, size, company, etc ., should be to involve those directly afflicted with the problem in its resolution. Provide them with “ownership of the problem and they will give you all the answers you have to make the most rational and rational decision.
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