CRM ARTICLE
How to Keep Track of Sales in a Small Business
SmallBizCRM Staff – June 8, 2023
Running a small business can be a challenging task. From managing employees to keeping up with customer demands, there’s always something that needs your attention. One of the most critical aspects of running a small business is keeping track of sales. Understanding your sales figures is essential for making informed decisions about your business and improving your bottom line. In this article, we’ll explore some of the best practices for tracking sales in a small business, including using software and apps, creating a sales spreadsheet, and analyzing your sales data to identify trends and opportunities. By following these tips and staying on top of your sales numbers, you’ll be able to make more informed decisions and take your small business to the next level.
The importance of tracking sales in a small business
As a small business owner, it’s essential to keep track of your sales figures. Sales tracking allows you to monitor your progress towards your revenue goals, identify areas of your business that need improvement, and make informed decisions about your operations. Without accurate sales tracking, you risk making decisions based on incomplete data, which can lead to poor business outcomes.
Tracking your sales figures also helps you to stay on top of your cash flow. When you know how much money is coming in each month, you can plan your expenses accordingly and avoid cash flow problems. Additionally, accurate sales tracking helps you to identify trends and opportunities that you may not have noticed otherwise. For example, if you notice that one of your products is consistently outperforming the others, you can allocate more resources towards promoting that product and potentially grow your business.
Types of sales tracking methods
There are several ways to track sales in a small business. The most common methods include using sales tracking software, creating a sales spreadsheet, or using a manual system such as pen and paper. Each method has its pros and cons, and the right choice will depend on your business’s needs and resources.
Sales tracking software is an excellent option for businesses that want to automate the process and save time. Many software options, such as QuickBooks or Xero, offer features like automatic synchronization with your bank account, invoicing, and expense tracking. Sales tracking software also allows you to generate reports and analyze your sales data quickly. However, these systems can be expensive, and some require a steep learning curve.
Another popular option is to create a sales spreadsheet using a program like Microsoft Excel or Google Sheets. This method is relatively simple and affordable, and it allows you to customize your tracking system to your business’s needs. However, spreadsheets can be time-consuming and prone to errors if not set up correctly. Additionally, spreadsheets don’t offer the same level of automation as a sales tracking software.
Finally, some business owners prefer to use a manual system, such as pen and paper, to track their sales. This method is the most affordable and straightforward option, but it requires a lot of time and effort. Additionally, manual systems don’t offer the same level of accuracy and reporting as digital options.
Choosing the right sales tracking software
If you decide to use sales tracking software, it’s essential to choose the right one for your business. Some factors to consider when selecting software include the size of your business, your budget, and the features you need.
One of the most popular sales tracking software options for small businesses is QuickBooks. QuickBooks offers features like invoicing, expense tracking, and automatic synchronization with your bank account. It also offers a variety of reports and analytics tools to help you make informed decisions about your business. However, QuickBooks can be expensive, and some users find the software challenging to use.
Another option to consider is Xero. Like QuickBooks, Xero offers features like invoicing and expense tracking. It also allows for automatic bank synchronization and offers a range of reports and analytics tools. However, Xero is generally more affordable than QuickBooks, making it an excellent option for small businesses on a budget.
Other sales tracking software options to consider include FreshBooks, Zoho Books, and Wave. Each of these software options offers unique features and pricing plans, so it’s essential to do your research and choose the one that best fits your business’s needs.
Setting up your sales tracking system
Once you’ve chosen a sales tracking method, it’s time to set up your system. If you’re using sales tracking software, this process should be relatively straightforward. Most software options offer step-by-step instructions to help you get started. If you’re using a sales spreadsheet, you’ll need to set up your columns and formulas to ensure that your data is accurate and organized correctly.
Regardless of which method you choose, it’s essential to ensure that your system is set up correctly from the start. This will save you time and effort in the long run and help you avoid the risk of inaccurate data.
Tips for accurate sales tracking
Accurate sales tracking is critical for making informed decisions about your business. Here are some tips to help you ensure that your sales data is accurate:
- Double-check your data: Before making any decisions based on your sales data, always double-check to ensure that your data is accurate and up-to-date.
- Track everything: Don’t just track your sales figures. Track all of your expenses, including overhead costs like rent and utilities. This will help you get a clear picture of your business’s financial health.
- Use clear and consistent naming conventions: When naming your products and services, use clear and consistent naming conventions. This will help you avoid confusion and ensure that your data is accurate.
- Train your employees: If you have employees who are responsible for sales data entry, make sure that they are properly trained and understand the importance of accurate data.
Analyzing sales data for insights
Once you’ve set up your sales tracking system and collected data, it’s time to analyze your data to identify trends and opportunities. One of the most effective ways to do this is to create reports and visualizations that allow you to see your data in a new light.
For example, you could create a sales report that shows your sales figures broken down by product or service. This report could help you identify which products or services are the most profitable and which ones may need to be reevaluated. Additionally, you could create a visualization that shows your sales figures over time. This could help you identify seasonal trends and adjust your business operations accordingly.
Using sales tracking to improve business operations
One of the most significant benefits of sales tracking is that it allows you to make informed decisions about your business operations. By analyzing your sales data, you can identify areas of your business that need improvement and make changes accordingly.
For example, if you notice that one of your products is consistently underperforming, you could adjust your marketing strategy or consider discontinuing that product altogether. Alternatively, if you notice that one of your sales channels is generating significantly more revenue than the others, you could allocate more resources towards that channel.
Integrating sales tracking with other business systems
Sales tracking is just one aspect of running a small business. To get the most out of your sales data, it’s essential to integrate your sales tracking system with your other business systems.
For example, you could integrate your sales tracking system with your inventory management system. This would allow you to track your inventory levels in real-time and ensure that you always have the products you need in stock.
Alternatively, you could integrate your sales tracking system with your customer relationship management (CRM) system. This would allow you to track your customers’ purchase history and preferences and tailor your marketing efforts accordingly.
Common sales tracking mistakes to avoid
While sales tracking can be a powerful tool for small businesses, there are some common mistakes to avoid. These include:
- Failing to track all of your expenses: Make sure that you’re tracking all of your expenses, including overhead costs like rent and utilities.
- Not double-checking your data: Always double-check your data to ensure that it’s accurate and up-to-date.
- Not training your employees: If you have employees who are responsible for sales data entry, make sure that they are properly trained and understand the importance of accurate data.
- Not analyzing your data: Don’t just collect data. Analyze it to identify trends and opportunities.
Conclusion
Tracking sales in a small business is essential for making informed decisions about your business operations and improving your bottom line. Whether you choose to use sales tracking software or a sales spreadsheet, it’s essential to ensure that your system is accurate and up-to-date. By analyzing your sales data, you can identify trends and opportunities that may not be apparent otherwise. Additionally, by integrating your sales tracking system with your other business systems, you can get the most out of your sales data and take your small business to the next level.