This case study is about XYZ Store which is retail apparel having 30 Stores. The major focus group is young ladies’ fashion and they have stores around the world. The existing process of sale is controlled, or transaction check is happening at 4 stages i.e., Sales Associate, Billing Accountant, Finance controller, and Store Manager. The study in this case gives an insight into the implementation of technology and how it enables organizations, especially Retail Apparel Store in this case to grow their operations which indirectly increases their profitability.
The study is been done systematically with contemporary evaluation and analysis of existing systems of Retail Apparel Stores which Includes Six strengths of Retail Apparel Stores with respect to their controlling systems, accounting systems, Sales transactions, The systems of the existing calculations, etc., there are challenges which were observed particularly Integrity issues. There were differences observed in terms of money as well as in terms of items.
At the time of the global count, the difference in stock is observed and at the time of quarterly financial audits, the difference in cash is observed. There may be several reasons for fraud and a few reasons may be pressure from work, personal issues, etc., Usually, the retail organizations’ work is on sale per square feet which excludes public areas, carpet areas, etc., and even brand sales Versus retail space allocated for that particular brand. There were a few analyses pertaining to the centralization & De centralization of Databases of the Retail Apparel Store which were given in this report.
Six Strengths of Retail Apparel Store Controlling Systems
Below mentioned are the competencies observed in Retail Apparel Store controlling Systems which were observed:
- The store manager was held responsible for all activities of the store.
- Dedicated audit team who does surprise visits to stores and audits.
- Multiple levels of controls and audits of financials as well as materials and products.
- Job allocation and well-defined operations process.
- The maximum sales volume happens through the electronic payments mode
- Not technologically but through other means of communication, all 30 stores are connected to each other.
Concerns Retail Apparel Store has overcome by Incorporating competency in controlling Sales Transactions
- The store manager is getting completely occupied with the administrative role and he could not focus on the growth of sales, increasing customer base, customer satisfaction, etc., strategic roles.
- Getting manpower on a part-time basis as and when required and their payment which is hourly based required petty cash whereas maximum sales happen through electronic payments hence managing this is becoming a herculean task for the store manager.
- The Surprise auditor’s strength is less and the turnaround time for surprise visits to individual stores is happening at 3 months once which is less when usually it should be a minimum of monthly once.
- Manual maintenance of records and documents.
- Defining exact job roles and allocating the same and the strategies like job rotation, succession planning, etc., are not observed.
- Four steps manual process of controls is again a bottleneck or the pain point for decision-making and ensuring transparent transactions and record keeping.
Situational Pressure Vs Fraud
As the automated system is not available in Apparel Store retail outlets there are many chances of integrity issues like differences in materials, cash, products, and sales, etc., the chances of employees’ involvement in fraudulent shall and the main reasons could be work pressure or due to an opportunity, or by mistake (Carries Minnich, 2017).
Usually, this is termed the fraud triangle which consists of Opportunity, Pressure, and Rationalization are the components involved in fraud triangle. There are external factors and Internal factors also involved in this such as Management behavior type, emotional, financial, etc., which pertain to employees working in a particular organization especially Retail Apparel Store in this case.
Centralized Vs Distributed Database Management System
The database is the brain of the system and based on the database only the major decision-making reports get generated. Data comes from various resources but the access to data shall be structured with controls and maintaining logs and documentation of the same is the key.
The centralized database shall consist of data from all 30 stores which can be made available or accessible to HO and the top management and there shall be a decentralized database management system that shall be part of the centralized database and shall be made available to the respective store manager to add or access data.
The Retail Apparel Store has got strong controls with six strengths but they are not sufficient compared to Increasing business needs and requirements, hence there is a need for the implementation of an Integrated technological solution that shall enable management to address issues of Integration, Data Visualizations, report generations, etc., and ensuring transparent transactions with all statutory and legal compliance. The decision making is the key and that shall happen only if there is a proper technological solution in place.