Look, for example, at the payroll expense. Salesclerks are paid to sell goods, and their productivity is the key to reducing the payroll cost. If you train a salesclerk to make multiple sales at higher unit prices, you increase productivity and your profits without adding dollars to your payroll expenses. Or, if four salesclerks can be trained to sell the amount previously sold by seven, the payroll can be cut by three persons. An understanding of the worth of each expense item comes from experience and an analysis of records.
Adequate records tell what has happened.
Their analysis provide facts which can help you set realistic goals, you are paying the right price for your store's prosperity. Sometimes you cannot cut an increase item. But you can get more from it and thus increase your profits. In analyzing your expenses, you should use percentages rather than actual dollar amounts. For example, if you increase sales and keep the dollar amount of an expense the same, you have decreased that expense as a percentage of sales.