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THE PROCEDURE MANUAL

A TOOL FOR GREATER PRODUCTIVITY, EFFICIENCY & THEFT PREVENTION IN RETAIL


In working with independent retailers throughout the country we have found that the majority do not have written procedures.  When questions or problems arise concerning the store's procedures the store owner/manager handles them on an individual basis.  The problem with this approach is that it takes too much of management's time and can lead to inconsistency in dealing with company procedures. 

A Procedure Manual will give the employees instructions on HOW to do their job.  It can be used both as a training manual and an on-going reference manual.  If your store does not have a Procedure Manual, make a commitment to begin this important project immediately.  If you do have this manual, take some time to review it and verify that it is up-to-date and includes all the information your employees need to be more productive and efficient.

For a retailer to survive and prosper in today's retail climate, he must be alert to any and every possible way to streamline the operation.   The development of a Procedure Manual forces you  to take an in-depth look at the total operation and can, therefore, be very enlightening.   It can help you to identify:

*      Recurring problem areas
*      Areas where internal controls are weak or non-existent
*      Where work is being duplicated
*      Where unnecessary work is being done - so busy work can be eliminated
*      How the organization can be improved so all areas of the business work together efficiently and economically toward the common goal of store profitability

A Procedure Manual provides detailed instructions for all the company's standard work routines. It should be written in an easy-to-read, detailed, step-by-step manner so all employees will be able to use it for guidance in handling new or unfamiliar transactions or procedures.  The benefits of a Procedure Manual are many.  For example:

*      People know what to do and what is expected of them
*      The company is no longer tied to an "indispensable" employee
*      Minimizes dislocation and loss of time and energy due to personnel turnover
*      Helps new employees quickly learn and become productive
*      Reduces management time spent in training
*      Facilitates growth of your business
*      Can free the retailer from an in-depth involvement in all the details of daily operations
*      Standardizes the way identical tasks are performed by different employees, thereby increasing efficiency and reducing errors
*      Contains built-in internal controls to help prevent loss due to employee theft

The Procedure Manual must be as detailed as possible so it can be used as a training manual for new employees as well as a resource manual for existing employees.  A set of standard procedures should be developed for every activity in the store from alterations to store maintenance.  All of these areas of activity can contribute to or detract from your store, either directly or indirectly.  Some activities need step-by-step instructions.  Examples of these would be activities involving record keeping and merchandise handling.  Other activities by their nature will need only general guidelines within which to operate.  One of these areas might be housekeeping, with guidelines for carpet care, lighting, window washing and pest extermination.  As an example of the level of detail needed for the Receiving/Checking/Marking department we have listed below a portion of the table of contents of a Procedure Manual we helped a client develop:

III. Refused Shipments
     A.  General Discussion
     B.  Source documents & instructions for completion
     C.  Checking for and Refusing Delivery of Late Merchandise
     D.  Retention period for Purchase Order Cancellation and Change Reports

 IV.     Returns-To-Vendor and Claims
     A.  General Discussion
     B.  Source documents & instructions for completion
     C.  Processing a Charge Back
     D.  Shipping return merchandise to the vendor
     E.  Supervisor's Responsibilities

The Procedure Manual should be developed around the logical divisions of your business, such as receiving and marking, office, store (sales floor) and buying.  Then each division will be further divided into specific job responsibilities.  

The section on receiving and marking should detail the standard routines for handling purchase orders, receiving, checking and marking merchandise and returning merchandise to vendors. 

The office procedures section should explain the routines for such areas as sales audit, accounts payable, accounts receivable, inventory control, payroll and data entry. 

The store section would explain the forms and procedures used in handling the different types of sales such as cash, gift certificates, Gift Cards or charge.  It should also detail how to handle returns of merchandise, due bills, interstore transfers, the receipt of new merchandise on the sales floor, price changes,  how to take a physical inventory count, and opening and closing procedures. 

The buyers section would cover the items for which the buyer is responsible, namely purchase orders and price changes.

A well planned and maintained procedure manual will greatly facilitate the growth of your business.  It is the foundation on which to build.  New stores can adopt the tried and proven procedures used by the original store and begin operating smoothly and efficiently from the very beginning.

In conclusion, as the store owner, it is your responsibility to provide employees the tools they need to do their job in an efficient and productive manner. A Procedure Manual gives them instructions on how to do their work correctly.  Once the Procedure Manual has been written and is in place, it will free up the owner so their time can be more effectively used to help the company become more profitable, which is what it is all about.

Most retailers or their staff, not being authors or as attentive to details as necessary, or even lacking the time, will find it helpful or necessary to get professional help from a consultant knowledgeable about retail industry practices. It would be a wise investment, to be returned many times over.

The Retail Management Advisors is a BBB Accredited Management Consultant in Allen, TX

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