Retailers have many of the standard ledgers. Purchasing and payroll can be key concerns. However, the main business areas are sales and inventories. Retailers often have point-of- sale systems that collect large volumes of useful data that IDEA can analyse.
The main tests on inventories are similar to manufacturing companies with perhaps more emphasis on movement, margins, and shrinkage.
The following are commonly used tests (grouped by type).
- Monitor cash disbursements for stores
- Track cash disbursements for contractor and vendor services
- Summarise cash disbursements by account, bank, group, vendor, etc.
- Compare “No Sale” transactions to cash voided transactions by associate
- Identify stores with significant allowances
- Isolate duplicate return transactions
- Identify incomplete exchange transactions
- Look for check purchases and refunds within 15 days
- Find credit card purchases and refunds to different credit cards (same day)
- Identify potential fraudulent or improper transactions through selling price differences between stores
Purchase Order Management
- Reconcile order received to purchase order to identify shipments not ordered
- Extract pricing receipt quantity variations by vendor and purchase order
- Track scheduled receipt dates versus actual receipt dates
- Compare vendor performance by summarising item delivery and quality
- Compare accrued payable to received items to reconcile to general ledger
- Gross profit analyses
- Items past their shelf life
- Comparisons between stores on holdings and inventory turnover per product line
- Price adjustment transactions