A beep from a barcode scanner signifies the very essence of retail. It marks the moment when the buyer purchases merchandise and receives their receipt. While the customer has completed the transaction, for the retailer, its lifecycle is only beginning. While many retailers are aware that RMH and BC communicate with one another, they do not know about the complex process that begins once that beep is heard. This article sheds light on the process through which RMH transactions evolve once they are synced with the cloud.
Here is what occurs with RMH transactions after they are transferred to Business Central.
1. The Process of Transformation: From Raw Data to GL Posting
As soon as RMH sends its information to Business Central, there is a transformation process. In RMH, one sees data in the form of an invoice, products, the sum of purchases and the payment type (cash, debit/credit card). But Business Central uses accounting terminology.
Using the integration engine, the raw data will be posted in certain GL accounts. The sales amount will be credited automatically to your Sales Revenue GL account. The taxes collected will be segregated and credited to your Tax Payable liability GL account. At the same time, the payment type will be debited, whether it is the bank GL account used to deposit credit card payments or your cash GL account.
It all occurs instantly. While the customer leaves in his car, everything will be posted in your books. No waiting for a person to manually enter everything into the system.
2. Inventory Valuation and Cost of Goods Sold (COGS)
While selling a product is all about making money, it is also a process through which you lose inventory. As the process takes place, Business Central not only recognizes the amount you earn, but also the cost incurred.
The exact cost of that item that was sold to you will be determined depending on the cost flow assumption used by the system, whether it is First In, First Out or Average Cost. At that point, Business Central will automatically post the journal entry by debiting COGS and crediting Inventory. This way, your profitability is measured precisely.
3. Dimensional Analysis (“The Who, What, and Where”)
Another incredible benefit of the post-sync world involves the use of dimensions. Dimensions serve as tagging that helps you slice and dice your data.
When the transaction reaches BC, it comes with an automatic tag on the financial data with a variety of metadata. It knows whether the transaction originated from Store A, Store B, Store C, etc., and in what Department the sales took place, as well as the Salesperson involved.
What it means is that when you do your financial reporting on BC, you no longer have to deal with a single chunk of revenue. You can break down your profit margin by store, by region, or by product category without having to access your RMH back-office system.
4. Customer Relationship Management (CRM) Data Update
If the transaction involved the customer’s loyalty card or phone number, the process also synchronizes the customer’s card within Business Central. This means that the customer’s “Last Sale Date” will be updated, the amount spent by the customer will increase, and his/her transactional history will be recorded.
This data is extremely useful for marketing purposes. The transaction details can help BC generate automated emails based on the absence of a visit within 30 days or find VIP customers with certain levels of spend. Now the transaction data has turned into marketing information.
5. Bank Reconciliation Process Preparation
As a final step, the transaction finds its place in the banking sections of BC. The tenders involved in RMH transactions are sorted out to prepare for the bank reconciliation process. Should the transaction involve a payment made by credit card, it is accounted for in a manner consistent with the deposits batch generated by your payment processor. This dramatically reduces month-end processing as the funds deposited into the account are already matched to the sales.
Conclusion
The transaction in RMH is merely a snapshot of an event. But as soon as the transaction integrates itself within Business Central, it becomes much more than that. The transaction becomes a financial resource, driving your accounting, updating your stock, enhancing your client information, and providing your reporting capabilities. The importance of RMH and BC integration lies in its ability to turn simple sales into vital business knowledge.
