Sales Forecast Operators Manual

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Information in this document is subject to change without notice. No part of this manual may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, for any purpose other than to be used by an ARMS client

ARMS Signature Series

Sales Forecast

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ARMS Sales Forecast uses the past to plan the future. By automatically using past performance key performance indicators including Average Sale, Quantity sold, achieved Markup % and Stock turn, then adding your thoughts on intended product line changes (such as adding additional lines), ARMS Sales Forecast enables you to forecast your annual future sales and profit per store, per department, per month, and per week. Sounds complex but its not, as the Sales Forecast program does in 2 minutes what it would take days to do in a spreadsheet.

Reports include:

1. Weekly Sales Team Targets (also compares achieved sales per department to forecast at the end of each week so your sales team can track their monthly progress). This is a fantastic team building tool.

2. Management reports enabling you to track sales and profit performance, Forecast v Actual. Know daily, weekly or monthly exactly what your actual sales and profit is compared to the forecasted performance. As they say, you cannot improve on what you cannot measure and this report compares your Average Sale, Quantity sold, achieved Markup % and Stock turn by department against forecasted figures. Then you can take action to improve short falls as soon as you see an area drifting off rather than getting to the end of the year and saying “oh well."

Simple To Create A Forecast

Most of creating a Forecast is done automatically by the system. Previous Year Sales by Department figures are used by the Sales Forecast program as the base to set future sales for the current year. This in turn enables you to set realistic weekly sales goals for your sales team.

There are four simple steps in setting your annual forecast. Step 1, 2 and 3 will only take a total of five minutes. Step 4 needs serious consideration per department as you may wish to change any of the four figures per department. We recommend allowing yourself say one minute per department to think about what you are going to do to positively impact your business for the year. Think about promotions you will be running, adding or dropping product lines. Think about how working on your old stock will improve stock turns.

Step 1

Give The Forecast A Meaningful Name. For example, "2010 Master Forecast"

Once a Forecast is given a name, the forecast is then set per store as in step 2, allowing individual store or combined store forecast reporting.

Step 2

Initialize The Annual Forecast Figures.

Typically select “Last Year”. This will take last years Supergem figures and automatically create the forecast, splitting the annual sales over 12 months, pro rata to months as achieved in the previous year (E.g. 22% of annual sales were done in December).

Step 3

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3.1 For example, last August you had a half price clearance sale that added $100,000 to August Sales and you will not be doing it again this year. Reduce the August Sales by $100,000 in sales.

3.2 Make changes to any week that is not approx 25% of the month. For example, December ramps up towards the 24th. Note week 1 dates are the 1st to 7th, week 2 = 8th to 14th week 3 = 15th to 21st and week 4 the rest of the month. (We give you the extra few days to play catch up if weeks 1 – 3 sales fall behind target).

Step 4

Adjust Departments As Required.

Each Department will show a number of figure, only four of which need to changed to change the overall store forecast

4.1 “Average Sale” multiplied by “Quantity” to make the Sales figure. Adjusting either of these will increase or decrease sales.

4.2 Add in the MU% factor to arrive at Gross Profit. Changing MU% will impact Gross Profit.

4.3 Then adjust stock turn to arrive at an optimum stock you need for this department. Then you can compare this “Budgeted Stock” with “Actual Stock” to help guide your buying.

Step 1 - Sales Forecasts

This step simply gives a forecast a name.

From the Main Menu, select “40..Budgets” then “20..Sales Forecasts Maintenance, or press F5 6136

Use the Add or / buttons on the screen to add or delete forecast names.

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Give the Forecast a meaningful name. You can have multiple forecasts, for example “Master” and “Master plus 5% Av Sale Increase."

2..Start Month

Specify the starting month of the forecast, typically the start of your financial year. However, it is not necessary for the start of the forecasting year to be the same as the start of your financial year. This date is used as the start of the year for Year to Date Forecast Reports.

9..Sort Order in Lists

If you have set multiple Forecasts, then list them in order you wish them to appear on any single select lists. We suggest you make the Master as Sort Order 0.

Step 2 - Site Sales Forecasts – Initialize tab

This step will load the selected forecast with figures taken from previous trading as defined below.

Use the Delete button on the screen to delete the forecast for this store.

You have two options for initializing (loading figures into) a forecast. You can use option 1 below to initialize from previous years actual figures or option 2 by importing another forecast. For example, you would use part 1 to create your first forecast, for example the “Master.” Then to create the “Master plus 5% Av Sale Increase” you would import the “Master” by less than a dozen keystrokes to increase the average sale of each department.

Option 1

From the Main Menu, select “40..Budgets” then “20..Sales Forecasts Maintenance”. From the 6136 screen press Define Per Site Sales Forecasts.. button, or press F5 6138.

1..Select Sales Forecast

Choose one of the names that you created in step 1.

2..Select Site

If you have multiple stores, select the correct site for this forecast.

20..Initialise Site Forecast To

Select from drop down box one of the following:

Zeros

Typically only used if you don’t have a full years trading history for the store you are initializing the forecast for.

Last Year

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Previous Year

Use this if Last Year was an abnormal year (such as being closed for renovations etc) AND / OR the Previous Year better repesented a year to use as a base for the Forecast.

Specific Year End Month

Use this if using Last Year is too far back (such as you are ten months into the current year). Selecting this will load the base forecast figures taken from the twelve months sales back from the end of the month entered in field 21.

21..Year Ending

This is only required if you select “Specific Year End Month” in the previous field. Select a month that ends the twelve months for the figures you wish to use as base figure. This has no impact on any other place where dates are used. It is used solely to determine what past sales figures are to be used to load into this forecast.

22..Inflation Adjustment%[+/-]

Use this if you wish to add inflation to the “Average Sale” for each department. For example, if you increase the average sale achieved Last Year by 4% then enter 4. To decrease the Avereage sale by 4% then enter -4. This will increase or decrease the Average Sale of each department.

It will only amend the Forecast and Store selected in fields 1 and 2 .

Select Initialize Site Forecast when all fields are filled out. This will fill in the forecast figures based on the fields entered above. After approximately a minute, the following message will advise the

forecast has been initialized (figures loaded).

Option 2

Used to create a forecast using the base of a previously created forecast. This has the advantage of using a forecast you have already put time and thought in to.

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1..Sales Forecast to Import From

Select the Forecast to import.

2..Site(s) to Import From

Select the Site you wish to import.

3..Sales Forecast to Import Into

Select the name of the Forecast you wish to import the field 1 Forecast figures into.

4..Site(s) to Import Into

Select the Site to import the figures into. Typically you would use the same site as field 2. However you can import in to a different site. For example, when you open a new store and want to use an existing store forecast as the base.

Step 3 - Site Sales Forecasts - Sales Percentages tab

This step enables you to adjust any specific month’s sales to remove any extraordinary circumstance. See example below. Typically no changes are required here unless you need to remove extra ordinary income such as a onetime huge clearance sale in a specific month(s).

You may note there are slight differences between figures in the first two columns, however they total the same. This is due to the “All Depts. $” column taking figures as calculated in the previous 6138 “Initialize” tab screen whereas the “Adjusted” column shows figures as calculated per “Department” tab which uses rounded dollars for the Average Sale. This rounding shows as the difference.

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3.1 This step allows you to adjust the sales for any specific month(s). For example last August you had a half price clearance sale that added $100,000 to August Sales and you will not be doing the sale again this year. Thus you would reduce the August Sales by $100,000 in sales. If on the other hand you intend to have a clearance sale this year DO NOT include it in the month you intend to have it as it will distort the Average Sale, Quantity Sold, Markup % and Stock Turn for that month(s).

3.2 Make changes to any month where the weeks are not approx 25% of the month. For example December ramps up towards the 24th. Note:- week 1 dates are the 1st to 7th,

week 2 are the 8th to 14th, week 3 are the 15th to 21st and week 4 the rest of the

month. (We give you the extra few days to play catch up if weeks 1 – 3 sales fall behind target).

You will also note the “Daily Percentages” which shows your annual sales broken down by day of the week the sales were made. The above screen shows 21% of sales made during the 12 month period selected in step 2, were made on Saturdays.

On the bottom line you will see a field that shows any difference as a result of changes made to any month(s). In effect this is just telling you the dollar amount that the system will increase or decrease quantities in the departments by.

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Step 4 - Site Sales Forecasts - Departments tab

Make sure you have completed step 3 BEFORE you start this step. Changes made in Step 3 will impact quantities in each department. As an exaggerated example, if you halved every months sales in step 3, then every department will only show half the pre change quantity.

This step is where you fine tune each department. This needs to be done with great thought as it has a major impact on your Forecast budgets. We recommend allocating an average of one minute per department to make decisions about the four fields you can change. When you change any of these four figures it will impact that Department, the Group (group as configured in SS Department Management Reports), the entire store and if there is more than one store, then the entire company’s results.

You should only increase any figure if you have a plan of action to ensure the increase can be achieved.

In the following example, if you increase the Average Sales in Department 2, it will result in increased sales in Department 2, Group 0, the Selected Site and All Sites. Both the Average Sale and the Quantity Sold will impact sales in all four columns. As you make a change to Average Sale or Quantity Sold, watch the impact it has on the Sales line for the Selected Site. If you are too aggressive in increasing Average sale and Quantity Sold for many departments, this will compound to show

unrealistic total sales. You will be surprised how much a small increase (say 10%) to Average Sale and Quantity Sold will have on Sales for the site.

Also changes to Average Sale and Quantity sold will change the figures in monthly sales fields in the “Sales Percentages” tab.

A change in Markup % will change the “Cost of Sales” and “Profit” for all four columns. Again, do not be unrealistically aggressive unless you have a plan to meet the increased Markup.

A change in Stockturn will impact Budget Stock for all four columns.

1..Select Department

As you select each department, you will notice the numbers change for that particular department.

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Select the site that you wish to use.

The four figures that you need to carefully review and change if necessary are:

4..Average Sale

As advised above, only change this if you have a plan for this department to increase or decrease the average sale.

5..Quantity Sold

As advised above, only change this if you have a plan for this department to increase or decrease the Quantity Sold.

6..Markup%

As advised above, only change this if you have a plan for this department to increase or decrease the Markup%.

7..Stockturn

As advised above, only change this if you have a plan for this department to increase or decrease the Stockturn.

Percentage Adjustments

This section enables you to make a change that will impact all departments for this forecast. For example if you increase the Average Sale by 5% you will instantly see the impact it will have on Sales and Profit

What if Scenarios

This function is good for creating “What If” scenarios that you can use to record what impact

increasing any of the four figures has on the business. It takes no more than two minutes to create a “What If” Forecast and you can create as many as you like, which you can print, keep or delete as you want. You need to create a “What If” Forecast so you don’t alter with the Master Forecast.

To create a “What If” Forecast, press F5 to goto 6136, give it a name of “What If,” for example. Then Goto 6138, select the “What If” forecast and a store. Then press the Import button to import the Master as the starting base figures. Next, from the “department” tab use the following three fields to complete the what if scenario:

8..%Change[+/-]-

Enter the percentage change you wish.

9..Based on

Select what you want to increase. It can be the Average Sale, Quantity Sold, Markup or Stockturn.

10..Departments

From here you can select one, multi or all department to apply the change to.

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On the bottom line a field shows the dollar value resulting from changes made to Average Sale and/or Quantity sold. This amount will increase or decrease the Monthly sales on the Sales Percentages tab pro rata to the Month % column.

Print Sales Forecasts - Management Report

This report is used by store management to compare Sales and Profit against Forecast Sales and Profit. You can quickly see the actual Average Sale, Quantity Sold and Markup variences compared to the Forecast for each Department.

From the Main Menu, select “40..Budgets” then “21..Print Sales Forecasts –Management Report”, or press F5 6590

Fields 1 to 4 are as per any other report. 10..Report Presentation

Typically you would select “Presentation 1 – Primary Department Grouping”.

11..Sales Forecast

Select the sales forecast that you wish to print.

12..Location(s) to Report on

Select the location(s) you wish to include in the report.

13..Departments to Include/Exclude

Specify any departments to exclude.

15..Show Annual Sales/Profit Figures

Select “No” to show the MTD or YTD (as determined in field 16) Forecast Sales and Profit figures and the Actual and Varience figures based on the same period. “No” will be the typically used selection.

Select “Yes” to show the full Annual Sales and Profit set in the Forecast but a Varience based on Year to Date (YTD) figures.

16..Report Period

Select (YTD) to show both YTD Forecast and YTD Actual along with varience for the YTD up to the end of the month specified in field 17.

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Select Month to Date (MTD) to show both MTD Forecast and MTD Actual along with variences for the month selected in field 17.

17..Report Month

Select a month that fields 15 and 16 will use.

Print Sales Forecasts - Staff Report

From the Main Menu, select “40..Budgets” then “22..Print Sales Forecasts – Staff Report, or press F5

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