As the time winds down for reporting to the 2015 P&L Study (there might still be time to report, call me!), my phone goes into overtime. Questions relating to reporting, especially from new garden centers in The Group, come in at an ever-increasing rate as the deadline approaches.
Don’t get me wrong, I’m glad everyone is calling! Clarifying what goes where in the data is the key to valid data in the report you receive back. Since the P&L Study began over ten years ago, the report has become an industry standard due to the time, effort, and accuracy participants have contributed to the effort.
The main reason the P&L Study is so accurate is the basis of the report – The Group Chart of Accounts, which was constructed in 2003 as a collaborative effort between, Robert, Robert’s accountant, Sid, Group garden centers, and myself. Between all those great minds, we built a list of potential account line items and threw them out there for comment. After several rewrites, the final edition emerged and has remained the standard for not only The Group, but also the entire garden center industry.
Most Chart of Accounts either suggested by accountants or accounting software pretty much matches The Group COA in the areas of Operating Expenses and Wage & Wage Benefits. But what are you in business for? I’ll answer the question for you – to sell a product and make a Profit doing so. That’s where the suggested COAs fail. Their lack of matching Category Revenues and Cost of Goods Sold, with the exception of Labor, leaves a wide gap in the ability to measure such essential ratios as Margins, Inventory Turns, and Gross Margin Return on Inventory Investment.
Why do accountants suggest a more limited set of accounts? Their interest is in reporting your tax numbers without all of that clutter of ‘financial management detail’. Roll it up for them into the bare (but accurate) numbers and they are happy. But in the end, your Center suffers from lack of information.
Which leads us to the issue of accountability. Aligning your accounts to the tried and proven Group Chart of Accounts is the key to not only having the information you need to complete the Study, but more importantly, the data you need to manage your garden center.
I know I’m ‘preaching to the choir’ for all of those centers that have been reporting to the P&L Study for a number of years. For those of you who have not, or just joined The Group, the time is now. Only by realignment now will you will be able to report to the 2016 P&L Study. Give me a call. Start now. Reap the reward of one the best benefits of your Group retainer.
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