The Need of Great Accountant for Your Tax Plan

Paying tax to the government on right time is the responsibility of every citizen. The government needs the tax amount to give extra facilities like schools, roads, gardens, hospitals and spend in army forces for safety. The tax amount is calculated on the salary or income earned by a person so that is why you may need a great accountant.

Tax planning must be done in advance, which involves evaluating your overall tax strategy and implementing it before the year end. By planning the tax calculation before the time you can get the tax-saving opportunities that can help you over the long term. Tax planning is an essential part of financial planning and enough time must be spared for calculating the right amount of tax to avoid penalty. Many companies in Sun City AZ provide accountant services to handle your money related transactions.

Investments in the tax-saving are provided by the government and many nationalized banks to influence people to save some share of their income. Every citizen has a fundamental right to avail all the tax incentives provided by the Government. By making provisions to calculate tax gives you more time, you can conduct research the best tax saving investment plans and allocate resources to fulfill your financial goals.

The advantages of tax planning in advance are right investment decisions, save tax more efficiently, capitalize on investment returns, avoid last minute paperwork, prevent from errors and mistake in calculating tax amount, and avoid a getting penalized from the government or late repayment of the tax amount.

Calculating and doing tax planning depends on your income or salary earned. It is important to review your financials before the end of the year as you will get a chance to make any adjustments to save some money spent in repayment of the tax amount. It will help you to maximize your tax savings and save money. There are many companies in Sun City AZ that work and have a great accountant team to prepare tax related documents.

A great accounting system must be used to track your income and expenses. It helps to reduce the time spent in finding where and how much money is spent. The computerized system can be used to manage and handle your accounts entries. Set up file systems to categorize your receipts and capital expenditures.

Maintaining good records helps to take the loan from the bank. If you need money for your business you can borrow money for a business expansion or new marketing strategy, then you need to pay the interest on that loan. Time the loan so you get the maximum benefit from the interest deduction.

To check the errors on a tax return calculation is a time-consuming process. Tax calculation nearby a deadline date leads to mistakes and inadequate planning time. Gathering all the information you need to file your tax return ahead of time helps you avoid mistakes like failing to report income.

Pay the right amount of tax to the government and take full advantage of tax exemptions available under the law. You can get extra benefits by investing in tax-saving investment policies launched by the government. Make optimum use of tax-exempted incomes and prepare documents necessary to calculate the tax.

You can find tax accountants for consultation and for the tax preparation along with the other associated advisory services, be it anywhere in the world. The disclosures for the maintenance of the taxes are also provided by the firms which is an important aspect regarding tax filing and other associative tasks. Specialists are required for understanding the correct equation of the cross border taxation, filing of the taxes, filling of the forms and documents as well as arranging the required evidence in case you are claiming tax exclusion.

The best way to find the services such as tax planning Sun City AZ is to see the internet for the details regarding the types of accountants available and the reliable as well as trustworthy firms operational near to your location to guide you with tax filing and income tax returns. Most people who need a great accountant in Surprise and Sun City AZ need to call Richard Steiman of bsfaz.com.

You can compare the services of the various firms to choose the best that can be available to you without moving an inch from your place. The details of the consultation, services as well as the amount charge are provided with the website from which you can make a well-researched and profitable decision for hiring the tax accountant and get the job done for you.

All in all, whether your business or company is big or small, an accountant can be of great help when it comes to managing finances. Some people consider finding a great accountant as an option but it is always better to have one. Accountants are more adept at handling taxes. They don’t just file your taxes but also provide taxes reductions.

Simple Business Tools That Will Enhance Operational and Financial Performance of Your Business

Smaller companies are often unaware of simple tools that can be used to improve business performance. They are relatively cheap and easy to use. So what are they and what exactly do they do?

Some smaller businesses believe that business tools are only for larger companies. This could not be further from the truth. Proper use of a number of simple business tools can seriously affect business performance by increasing both operational efficiency and profitability. I would recommend 4 different tools, which collectively cost about $500. They are intuitive and easy to use. So what are they?

1. Mind Maps
2. Business Health Check
3. Business Planning Tools
4. Microsoft Visio

Mind maps are computer based programs that you can purchase and download over the internet. They are a terrific management tool in that they allow you to summarize an enormous amount of detail on a single page. Consider all of the tasks you need to undertake in a week or a month and you will find that there is no way to keep on top of everything if you list them in a traditional linear fashion in a notebook or on several sheets of paper. Mind maps allow you to keep track of all of the important issues including key assignments for staff, performance measurement, key account management, strategic development, milestone management, to mention just a few. They also allow you to record details of meetings in a coherent and ordered way which facilitates excellent follow up. You may also use them to brainstorm ideas with your team.

A business health check tool allows you to step back from your business and to analyze it in detail using several hundred well targeted questions. A good one will focus on every aspect of your business including leadership, management style and capability, operational competence, financial management, management and use of information, IT infrastructure, quality and effectiveness of staff, business planning and many more key measures. It is similar to getting a management consultant to come into your business and look underneath the hood, except you can do the diagnosis yourself and it is much more cost effective. The advantage is that it gives you a deep insight into the here and now so that you can then plan your business’s future more coherently.

Business planning is often overlooked in small businesses. This can be a costly mistake. It makes little sense to allow your business to drift on a day-to-day basis and for you to be simply reacting to situations rather than anticipating and actively managing them. Every business needs a road map to keep it on track. A business plan allows you to build a strong team culture with a shared vision of the future. If the whole team has clarity of purpose and is pulling well together, then the business is going to perform substantially better. There are many business planning tools available on the internet and some are even free. The ones you pay for tend to offer you more.

Microsoft Visio is a simple drawing tool that anyone can learn with as little as half an hour on the computer. There are a multitude of uses it can be put to in your business from building marketing brochures and flyers to designing standard forms and stationery. My personal favourite use of Visio is for drawing business process workflows. It is amazing to see with clarity how we go about doing things in our businesses when it is shown in a visual way on a piece of paper. All of a sudden you notice the redundancy in the way that even the most simple activities are carried out. This facilitates changing your business processes and streamlining them to be more efficient. It also allows you to coherently document your processes so that is no ambiguity about the way in which your staff executes them. This can save you a lot of wasted time and money.

Financial Performance of Offshoring Companies

People always wonder how offshoring companies are doing, and if the pros of offshoring outweigh the cons. Of course like any other business venture, offshoring is not without risks, but for those who choose to offshore certain aspects of their production and/or other processes, and have reaped the rewards that offshoring has to offer.

The success of companies who continue to offshore may be attributed to any number of factors, but as these companies have learned, the practice of offshoring has done wonders for their company. Some have even attributed it for keeping the company in business. But while the idea of offshoring is simple enough, the real process isn’t so. For an offshoring operation to succeed, one must truly know what they are doing. A lot of research is involved as well, and certain offshoring business models may not work for your company.

That being said, it is worth noting that a majority of Fortune 500 companies use the offshoring model for their business processes. This may have given many people the idea to try offshoring themselves, or to start looking to see what offshoring has to offer and what benefit it can impart to the company. For one thing, many companies have found that offshoring contributes greatly to a company’s productivity and – yes – profits. The higher profit is a result of the lower operating cost from offshoring. Having the same job done for much less greatly does wonders for the company budget and profit.

For companies that have found offshoring to be greatly profitable, they can rest in the fact that even with the financial crisis their company can stay afloat. While the fast-rising growth experienced in recent years have slowed down, there is growth still, and once the business world has stabilized once again, opportunity for more offshored projects and services are likely to rise.

The success of companies who offshore services does not mean that those who do not offshore are not successful at all, or must resort to offshoring in order to become a blazing success. As previously implied, offshoring is not for everyone. It just so happens that these companies have studied this model and found it to be very effective for their business. Certain failures in offshoring may be a result of a lack of preparation on the part of the company, or the mismatching of offshoring techniques to their needs. If you or your company want to venture into offshoring, then take the time to study various aspects of it and see if your needs fit the model. Careful preparation is tantamount to success.

Selling a Company – Prep Tip #5 – Improving Financial Performance Improves Your Price

When selling a company, expect the buyer to examine your company’s financial health. Be prepared by looking for financial and performance ratios that point toward ways to improve your business’s performance and profitability. Act on what you discover. Whatever improves the financial health and performance of your business also improves its selling price.

Obsolete and Unproductive = Gone

Preparing your firm for sale can force you to take steps you perhaps should have taken long ago. For example, sell or scrap obsolete or slow-moving inventory. Compare product rework against industry averages and correct the causes of deficiencies. Divest unproductive assets that can’t be sold. Write off receivables that are truly uncollectable.

Consider discontinuing or removing unrelated businesses. For example, one of our recent clients ran a metal plating business and owned a microbrewery. Although a fun hobby, it would be difficult to find a buyer for a metal plating business who had a similar interest in owning a microbrewery. We advised him to sell the brewery to the current day-to-day manager.

Your business and its selling price may benefit from analyzing profitability of product and service lines: what doesn’t pay doesn’t stay. External advisors and consultants can help with the analysis, and they may find other ways to increase profitability. Examples would be determining if the market could support a product price increase or whether you could bundle them with others and raise prices on the total package.

Improve Cash Flow

You can improve cash flow by increasing revenue-perhaps by increasing prices, changing product bundles and related pricing, focusing marketing on proven ways to drive revenue, incentivizing and upgrading skills of salespeople, sponsoring sales promotions, and removing low-performers organization-wide. Ask suppliers for more favorable terms. Take advantage of cash discounts. Wherever possible, accelerate your collections. Renegotiating leases can improve cash flow, especially with assistance of a commission-based consultant.

Ignite Sales and Revenues

It’s a red flag if your business is dependent on you as its main salesman. One way to increase revenue is to seek sales channels outside your business. Strategic alliances can diversify sources of revenue and also can be a trial run of compatibility and value with a potential buyer. Please be aware that it can take a year to get an effective alliance program going effectively.

Before selling your business may be the time to introduce new products, expand distribution channels, and enlarge your geographic presence. Depending on your selling time frame, acquiring new business lines and entering new markets may also attract particular categories of buyers. Doing so requires more lead time – anywhere between one and three years – and investment, however, so weigh return on investment carefully.

Diversify Your Customer and Supplier Base

Another smart step to diversify your customer base, especially if you’re dependent on a few customers. Further, seek customers who offer non-cyclical demand to counter over-dependence on cyclical or seasonal customers. A strong, diverse customer base radiates value and resilience that will pay off in the selling price of your business.

Being dependent on too few suppliers is also a weakness that may impact your selling price. Address enhancement opportunities and deficiencies in your supply chain. Expand the number of suppliers, especially critical ones.

Diversifying your customer and supplier base can take between one and three years, so plan accordingly. That is not to say immediate changes can’t happen or won’t have impact. But we all know it takes effort to find quality partners at either end of the chain.

Reduce Expenses

When preparing your business for sale, examine every expense to root out waste. Trim inessential expenses like entertainment and travel. Review utility and telephone costs, preferably by hiring a commission-based auditor. It may be worth appealing property taxes, renegotiating insurance coverage, and appealing workers’ compensation ratings.

Consider converting leased and financed assets to owned assets. A concentrated effort could take three months. If you haven’t been using a budgeting process, now is the time to start. Buyers will want to see them.

Controlling the Financial Performance of Your Business

There are numerous factors which impact on the performance and viability of your business. It is therefore imperative that you monitor and control your business’s financial performance. Debt control and budgeting are two elements of this, and of particular importance is your business’s cash flow.

Many profitable businesses have gone under due to a lack of attention to their cash flow; they have insufficient cash available to pay their bills. Thus, you must plan and control your cash flow in order to effectively manage your business.

Some strategies that may assist in this include:

• Increasing the speed of cash receipts by good debt control strategies

• Avoiding excessive stockholdings by managing stock levels and obtaining reliable, prompt suppliers

• Planning the purchase of equipment and other capital expenditure for periods when surplus funds exist

• Planning to have sufficient reserves to carry your business through the inevitable periods when unexpected expenses are incurred

• Avoiding excessive investment in plant, equipment and other fixed assets which may leave too little working capital available (particularly in periods of falling prices, declining sales or increasing interest rates)

• Avoiding over borrowing as this may place a strain on working capital, loans still have to be repaid even if revenue is decreasing

• Maintain adequate working capital to fund the growth as increasing sales also means increasing costs, your working capital requirements therefore, need to be continually reviewed

• Delaying outgoings by taking advantage of the credit terms offered by your suppliers and paying when it suits your cash flow

• Reducing outgoings by taking advantage of discounts when appropriate and working capital permits

• And most importantly, regularly comparing your actual cash flows to your budgeted cash flows, analysing the differences, and taking action based on this analysis

00M-249 – IBM Cognos Financial Performance Management

Nature of 00M-249

The IBM Test 00M-249 is the code name of the IBM Cognos Financial Performance Sales Mastery Test v1. This test is mainly divided into three sections such as business analytics, financial performance management offering, and effective prospect for financial performance management sales.

Credits from 00M-249

One who is taking a 00M-249 aspires to become a skilled IBM Cognos Financial Performance Management Professional v1. In addition to that, one of the benefits of passing this test counts as a qualification to the criteria of Trained Sales Resources for either Cognos Value-Added Reseller or Solution Provider. Another benefit for passing this test redounds to the applicant’s PartnerWorld sales skill criteria for both premier and advanced membership levels.

Scope and Objectives of 00M-249

Aside from being able to get into the world of IBM and be promoted into a program, 00M-249 is designed to help you and the company achieves career based objectives. The first objective of this test and career position is to know how to position the business analytics and its message and the fundamentals of the IBM Cognos Financial Performance Management offering. Second, it is also important that the applicant knows how to express the value of the Financial Performance Management offering which leads to the objective of understanding how to effectively forecast for sales. It is also the goal of 00M-249 to test the applicant’s perception of the key sales messaging and positioning as well as the understanding of the creation of the dynamic budgets and plans under the department of finance because it is a Financial Performance Manager’s job to provide a timely feedback to everyone involved in the said process. Lastly, 00M-249 aims to highlight the importance of connecting the business users to the right financial data to come out with and to implement smarter decisions for better business outcomes.

Final Notes about IBM Cognos Financial Performance Sales Mastery Test v1

The 00M-249 tests are available in English and Japanese language versions. There is a total of 46 questions under 00M-249 which the applicant must be able to answer within 90 minutes or one hour and a half. The applicant must get at least 76% correct answers to pass this test. It should be noted that the applicant is only given two attempts to pass this sales mastery test. In the event that the applicant failed this test twice, he or she must wait for three months to be able to take the test again.

Before taking 00M-249, IBM highly recommends for the applicant to complete the five-hour-long education first. However, the duration may vary depending on the applicant’s actual Cognos experience. All of the courses are available online which may require the PartnerWorld id and a password for access. Also, companies who availed of the IBM value package may take the test for free.

After passing 00M-249, IBM says it encourages the successful applicants to deepen their sales skills through attending different seminars and conferences, taking self-help studies, and many other trainings being offered by the company.

Improving Financial Performance With ISO 9001

The establishment and integration of ISO 9001 into ongoing corporate management processes was addressed by the 2000 revision of the standard. There remain tremendous additional opportunities for improvement in the use of economics-of-quality approaches. It is important that the effectiveness of ISO 9001be measured in financial terms. Quality is widely recognized as a critical success factor in long-term business performance. However, many organizations that have implemented ISO 9001 see little return on their investment in terms of performance improvement because managers generally remain unaware of the tremendous opportunities for improvement that yet exist. Lets examine how an economics-of-quality approach can be integrated with ISO 9001 implementation in order to optimize return on investment and begin long-term continual improvement.

Total Quality Management or Quality Management System

The key to understanding this issue is to recognize the difference between total quality management (TQM) and a quality management system. TQM is a philosophy under which a business or organization operates. The philosophy is pervasive applying to everything, hence total. Its aim is to satisfy all customers-internal and external, hence quality. And it focuses on the example set and reinforced by every area of the organization, hence management. TQM is supported by a culture of continuous improvement and it is a never-ending journey. A quality management system is one of the building blocks for this process. It is a tool through which management structures the organization’s processes. It ensures that all team members understand the activities required to achieve quality the first time. The quality system establishes a process for identifying non-compliance from this goal and a process for analyzing the root causes so that the organization can take long-term corrective action.

Quality is an Organizational Issue

Quality systems have evolved from their traditional “little q” emphasis on engineering and manufacturing operations. At one time, most quality practitioners came out of a technical background (the writer not withstanding), emphasizing quality in physical activity. In these areas, losses from scrap, rework, and other product costs were clearly visible. Thus the evolution of quality thinking tends to relate to systems that pertain only to direct costs, not administrative support activity. For many organizations that implement ISO 9001, this is still the case. With the 2000 and the 2008 versions of ISO 9001-management must demonstrate greater interest in implementing quality systems and not just justify the implementation on the basis that “customers demand that suppliers be registered.” The feeling that this is simply the right area to address for the sake of the customer often drives organizations that do implement a quality system. The opportunity to vastly improve business performance is often overlooked.

Measuring the Economics-of-Quality

“Total quality costs represent the difference between the actual cost of a product or service, and what the reduced cost would be if there was no possibility of substandard service, waste, failure of products, or defects in their manufacture.”-Doing it right the first time. The above statement is alarmingly simplistic: it recognizes quality costs as the total opportunity. Most quality systems address only some of the areas that affect an organizations cost structure. If the organization applies ISO 9001only to engineering and manufacturing, then it ignores the intent of the standard and the significant impact on cost structure, long-term competitive advantage, and internal and external customer satisfaction.

Examples

In creating ISO 9000 documentation a distributor of electronic products and services totally ignored the process control sections of the standard in the misguided belief that a non-manufacturing business was exempt from process control. This company lacked understanding of the management of process in determining customer satisfaction or the consumption of resources and, therefore, costs. A benchmarking study of the distribution industry revealed that up to 25% of the actual operating costs stem from failure of internal processes. A well-run distribution company should earn a pre-tax return of two to four percent of sales. Its operating expenses should run 16-20% of sales. Thus, focusing on process quality was the company’s single greatest opportunity for improving profitability-a connection that management had failed to consider.

A large tier I automotive manufacturing company began implementing ISO 9001/TS 16949 because customers were demanding that it be certified. Initially, management believed that costs of quality-including rework, scrap, seconds, and other items related to product cost-were about seven to ten percent of the cost of business.However, when the company developed an economics-of quality system that addressed the total costs of poor quality (as defined by the American Society for Quality), management realized that the true costs of quality-pertaining to wasted administrative and sales expenses, lost customers, warranty claims, penalty clauses for late delivery, late product development costs, and other “hidden” quality costs-exceeded 25% of the overall costs of business.

The Hidden Quality Costs

How can an organization address this wide gap between known quality costs and real quality cost? The answer lies in an economics-of-quality cost system. An economics-of-quality system identifies costs of poor quality in three major categories: prevention, appraisal, and failure costs. An economics-of-quality system must include all costs of sub-optimized processes. This concept extends far beyond the traditional costs that are reported by costing systems. ISO 9001 with its emphasis on continual process improvement forces an organization to finally break away from this traditional mindset.

Examples

In an effort to reduce costs, a hand tool manufacturer’s purchasing department had been buying iron castings at the lowest price available from several suppliers. A cost of poor quality analysis revealed that the price savings gained from this approach were actually outweighed by additional costs in several areas. These costs included additional expediting and problem analysis activity by the purchasing department and more receipts, more accounts payable invoices being processed, and more errors. The company was able to reduce its purchasing, receiving, and accounting costs only when it decided to work exclusively with suppliers who delivered quality products.

A retail catalog house discovered that only a few of the credits it issued were related to product failure problems that had been identified by its traditional quality system. Instead, a quality cost driver analysis traced more than 80% of the credits to administrative quality problems. Addressing this issue allowed the company to reduce its overhead costs by eliminating the root causes, including inaccurate pricing data, ineffective communication between sales and administration, and inaccurate customer master file data.

In both of these examples, management was unaware of the costs of poor quality incurred through process failure. Worse yet, these items would not have been uncovered by simply implementing a traditional quality system. They were buried in overhead costs and handled on a responsibility basis rather than an activity or process basis. In such cases, efforts to reduce administrative costs only increase customer dissatisfaction, as the problems remain unresolved and errors accumulate. Employee dissatisfaction is at an all time high because of employee layoffs and attrition. Management fails to redesign processes leading to yet more work and more dissatisfaction-precisely the wrong kind of environment in which to implement total quality management.

Conclusion

Integrating ISO 9001:2008 throughout the organization allows management to align top-level goals with internal processes and process measures. With greater visibility into processes, managers will be able to translate the initial quality goals of better, faster, and cheaper into continual process improvement and also improve their financial performance.

Franchise Financial Performance

Your status as either a potential purchaser or merely a curious member of the public partially determines the amount and quality of information you’ll be able to discover about the financial performance of a specific franchise. Potential purchasers are able to find out about a franchise’s financial performance via the Federal Trade Commission’s (FTC) Franchise and Business Opportunity Rule. Under the Franchise and Business Opportunity Rule, franchisors are required to make a series of detailed disclosures to potential purchasers, either in the Uniform Franchise Offering Circular (UFOC) form or in the form provided by the rule.

There are three basic parts in a UFOC:

1) 23 sections that describe the aspects of the franchise program.

2) A set of the franchisor’s audited financial statements.

3) A copy of every form or contract you will sign if you decide to purchase the contract.

The rule requires companies to include a list of the names, addresses, and telephone numbers of at least 10 recent purchasers geographically closest to a potential franchisee in their disclosures – this way, the franchisee can obtain legitimate references. Once you have this information, you will be able to contact recent purchasers and ask them questions regarding the financial performance of the franchise you are looking into.

Be aware that the FTC does not require that disclosure statements be filed. While franchisors do provide information to potential purchasers, they are not required to file that information with the FTC. It is possible, then, that only a potential purchaser would be able to obtain detailed information about a particular franchise. However, even if you are unable to glean information from the FTC because you are not a potential purchaser of a franchise, it may still be possible to find the information you’re seeking if that franchisor has filed a UFOC. Fifteen states require franchisors to provide presale disclosures, and most of these states do not provide copies of these disclosures but permit review of the documents in person by appointment.

These states are:

California (filing required)

Hawaii (filing required)

Illinois (filing required)

Indiana (filing required)

Maryland (filing required)

Michigan (only notice required)

Minnesota (filing required)

New York (filing required)

North Dakota (filing required)

Oregon (UFOC filing not required)

Rhode Island (filing required)

South Dakota (filing required)

Virginia (filing required)

Washington (filing required)

Wisconsin (filing required)

Customer Financial Performance

Most business people would agree with this statement. Yet many in business seldom bother to monitor their customer’s financial performance much past the initial acquisition phase. When you understand your customer better, you are better able to offer them the right services at the right price at the right time. This in-depth analysis and understanding of a customer profile helps build stronger relationships with existing customers as well as maximizes and maintains customer value by focusing on sales and marketing efforts.

Like most things in business world, what you don’t know, can hurt you. If you are not aware that your customer is headed into financial trouble, you may increase your credit exposure unknowingly and end up with bigger write-off to absorb. Events like write-offs, unpaid collections, and disconnected services are all indicators that a business is headed for trouble. If you are aware of this issues as soon as other business rapport them, you can potentially avoid future loses.

Identity fraud, Fraud and bad debt are growing problems worldwide, representing billions in annual losses. In response to this need, We are providing software based on comprehensive and advanced technologies proven across industries. Capturing and managing data accurately is important for both regulations and because of the financial implications of identity fraud, but companies’ ability to adopt a policy to address this risk is not always effective.

Access the information you need to stay competitive. We offers white papers on a range of issues from fraud and credit risk models to data quality management. Please provide us your contact information to serve you better in the near future.

The Relationship Between Merchandising and Financial Performance

In today’s economy, retailers are looking for ways to improve financial performance without adding stores. With the increased pressures of competition, eroding margins, lack of differentiation, and having achieved many of the back-office and supply chain efficiencies available to reduce costs, the focus of retail executives has shifted to growing comparable store sales and increasing margin through more effective merchandising.

Because inventory is one of the most significant investments retailers make, it’s no surprise that they are beginning to reevaluate merchandising strategies. Traditionally, deciding how much merchandise to buy, which stores to put it in, and the best price for each item has been one of the least efficient processes in a retailer’s business. Based on a study by Accenture, it is estimated that the top-tier U.S. retailers could gain $20 billion in incremental gross margin dollars by employing Merchandise Optimization technology.

Merchandise Optimization is an emerging category of solutions that help retailers make more profitable buying, allocating, and pricing decisions based on customer demand. As with any emerging market, there are various names for pieces of the merchandising puzzle: Pricing and Revenue Optimization, Demand Based Management, Retail Revenue Management, etc. Regardless of name, the concepts covered by Merchandise Optimization are important to the success of all major retailers.

As merchandising experts, retailers excel at making strategic merchandising decisions such as picking best-selling items for next season’s assortment. However, because they are responsible for thousands of items and hundreds of stores, a large portion of their time is spent on data analysis and number crunching. Merchandise Optimization technology acts like a merchant’s personal assistant by automating the tedious analysis of sales and demand information, generating a common forecast that incorporates store-level information about long- and short-lifecycle products, and providing them with the tools they need to make the more profitable buying, allocating and pricing decisions.

“Merchandise Optimization is a power tool for the retail industry,” said Scott Friend, president of ProfitLogic. “Merchants without the right tools spend far too much time collecting information and manually analyzing spreadsheet data just to keep up with 1000s of decisions every day. Merchants empowered with Merchandise Optimization tools spend their time making decisions based on centralized, organized and pre-analyzed demand information. This frees up their time to do what they excel at — being merchants.”

One of the areas that cause retailers the greatest pain is markdowns. More than 60 percent of sales in department stores and specialty chains come from marked-down merchandise, according to Levy & Weitz in Retailing Management. Tremendous financial benefit is available if price changes are executed at the right time and deep enough to spur demand. If merchants markdown merchandise too early, they are stuck with inventory shortages, dissatisfied customers, and lost gross margin. If they markdown merchandise too late, which is typically the case, they are left with excess inventory at the end of the season, have difficulty finding room for new merchandise, and sacrifice gross margin dollars. Because Markdown Optimization is one of the quickest and easiest ways for retailers to drive productivity from their inventory investment, it’s an excellent place to get started on the road to using Merchandise Optimization across the entire merchandising process.