Tag: Business Organization

Career in NGO

Many international organizations and NGOs offer trainings that are relevant to start a career in an NGO. The easiest way is to take an online course in a relevant subject area such as Human Rights, Health or Social Justice. Trainings and online courses will equip you with the relevant terminology and a basic understanding of how NGOs work and what they do. This will help you during your job applications and interviews. Beyond that, online courses, workshops and trainings can help you explore and discover your own interests. It’s essential for a purpose-driven career that you actually care about the cause. Other options to complete relevant trainings include taking part in events, workshops or summer/winter academies.

• Take part in online courses to improve your skills and knowledge
• Take part in events, workshops and summer/winter academies

How to get Job:

Decide what you want to do

The first step to building a career in an NGO is choosing a career path that fits your skills and passions. Because NGOs focus on such a large range of topics and causes, there are many career paths that can allow you to work in an NGO. For example, if you want to work for an NGO but are also interested in a career in health care, you might become a doctor and serve an NGO like Doctors without Borders, providing medical care to people across the world. NGOs also employ administrators, communications specialists and many other professionals.

Complete an undergraduate degree

Once you’ve decided on a career path, you can earn a degree that can help you meet your goals. Some colleges and universities have programs for nonprofit management or administration, which might be ideal for people who want to become NGO directors. Other majors that NGO employees study include business management, psychology and history. You might combine two subjects in a major and minor program. For example, NGO financial professionals might have degrees in business management or economics, with minors in sociology or global studies.

Get professional experience

After you complete your degree, you can develop your skills and gain experience in an entry-level job in your chosen field. You might work for a nonprofit organization, but you might also work for a private company or government agency. For example, if you plan to become a fundraiser for an NGO, you might start with a sales position at a for-profit company. Some people who want to work in an NGO gain professional experience in the private sector while volunteering for an NGO in their spare time, which can help them build connections in the nonprofit field.

Consider an advanced degree

Depending on the role you want to take in an NGO, you might benefit from getting a graduate degree in a subject related to nonprofit administration. Many graduate schools offer Master’s programs in nonprofit administration, leadership and social entrepreneurship. In these programs, you can learn about project management, organizational structures and laws governing nonprofits. If you want to work for a specialized NGO, like a medical assistance group, you might earn a medical degree or other advanced certificate that relates to the NGO’s focus.

Apply for jobs

Non-governmental organizations often post their job openings on general job boards and on specialized nonprofit and social action job boards. As you search for a job at an NGO, you might research the nonprofit job boards for your preferred cause and check those boards frequently. If you want to work for a specific NGO, you can look at their website for job openings or contact them directly. Sending a resume and cover letter to the organization’s hiring manager can help you develop professional relationships, which might give you an advantage in the hiring process for your ideal job.

Common Implementation Method

In-House Implementation:

A Company creates an internal department or unit to work directly with communities to design and implement projects.

Company Foundation:

A Company establishes and independent foundation or trust as a separate legal entity to carry on” Corporate Social Responsibility” programs. The company generally provided grants and workforce to the foundation or trust.

Third Party Implementation:

A Company engages a third party , such as a local or international NGO , to work with local communities in designing and implementing CSR projects, or it support an existing initiative being implemented by others.

Multi Stakeholder Partnership:

A Company establishes or joins a voluntary or collaborative alliance, network, or partnership. This implies cooperation between two or more actors in a manner that shares, risk responsibilities, resources and competencies and involves a joint commitment to common cause, task and goal.

Hybrid:

A Company utilizes a combination of two or more implementation models to deliver various components of its ” Corporate Social Responsibility” program, Many corporate houses in India are working or implementing their” Corporate Social Responsibility” programs through their own foundations or trusts. Such as Ajim Premji Foundation,

CSR Activities in NGO

Real and long-lasting change can only be ushered in when all of us come together to make it possible. Inclination towards social responsibility and contribution to sustainable development is fast becoming the mark of distinction for leading corporate and top brands. Corporate Social Responsibility for NGOs is the continuous commitment of a corporate body to improve community well being through discretionary business practices and ethical contributions of corporate resources. Mallen Baker writer, speaker and CSR expert defines Corporate Social Responsibility as a strategic act, “a way companies manage the business processes to produce an overall positive impact on society.” Integrating social, environmental and ethical responsibilities into the governance of businesses ensures their long term success, competitiveness and sustainability. CSR initiatives facilitate corporate to build a dominant brand that reverberates with their key stakeholders customers, employees, government and general public.

NGO and development sector professionals work in difficult and challenging circumstances. With limited resources and constantly changing, complex and dynamic situations, an NGO professional has to be on toes all the time to adapt to the environment. Working in this sector demands dynamic personalities, leadership qualities and management aptitude and skills.

• Effective communicators:

Effective leaders are always good communicators, so is true in the case of NGO leaders as well. They know they have to deal with contrasting ends, like beneficiaries, donors, agencies, etc. and they are able to change their communication styles as per the audience. They get social and meet a lot of stakeholders, make networks and engage people for furthering the cause of organization.

• Inspire and empower:

With their ideologies, passion, compassion and working styles, effective NGO leaders always keep inspiring others. Whether they are their own team members or donors or stakeholders, people look up to them as motivation and inspiration. They are thorough professionals and yet are compassionate towards people. They accept and enjoy diversity, be it within the team or outside the organization. They know that they are ethically responsible and accountable to their teams and even their beneficiaries. They motivate others also, to understand and behave in ethical manners, reflecting in the organizational policies, processes, and even day-to-day functioning.

• They have their eyes on the goal:

They dare to ask a lot of questions to their staff, donors, and other stakeholders. They have the courage to put the ultimate objective of the organization at the centre, and constantly work towards it. They understand that social change and development is not an overnight process, yet they chart a map and strive continuously towards organizational goals.

• Believe in transformation:

Over and above all, their best quality is strong belief in transformation. They have full faith in their own work, the organizational objectives and goals and the means they take to achieve them. They are passionate towards the community, are sensitive and resilient humans, believe in the cause and work consistently towards it.

• Take initiative:

Leaders are confident, pro-active, and they take initiative at their field of work. At organizational and work (field) level; they anticipate problems and act in time to correct the situation. This also applies to self-improvement they actively seek. They are always looking for opportunities for betterment of their own self and their teams. This makes them great team workers, and they can do it because they are focused on the larger goal. Their pro-active instinct also makes them identify opportunities and ways to make best use of them. Such people can truly be assets to the organization.

Staff Development in NGO

There are many different reasons to provide training and development for staff in the NGO sector. One of the key reasons to ensure staff development and skills strengthening is the fact that the NGO sector has such a significant impact globally which impacts communities, beneficiaries and donors. In fact, the number of people expected to donate to charities by 2030 is 2.5 billion, and 80% of the global population believe that NGOs make it easy to be involved in positive social change. The scale of the sector is clear when you consider that “if NGOs were a country, they would have the 5th largest economy in the world”. With that kind of power comes great responsibility, and the importance of staff development is thus undeniable.

Building safeguarding practices

Another key reason for staff development is the building of safeguarding practices. Following the revelations in 2018 of widespread abuse by certain INGOs of both beneficiaries and internal staff, there has been growing reflection within the sector about what can be done to better promote safeguarding. Safeguarding is defined here as “All actions taken by organisations to protect their personnel from harm and from harming others”. While many organisations could simply require staff to undertake mandatory online courses (where they complete a multiple choice test to attain a safeguarding certificate), there has been recognition instead that serious shifts in practice are required to protect beneficiaries, staff and the sectors reputation and thus its ability to make positive change at a global and local level.

Building organisational capacity

It may seem that building the talent of your staff could lead only to their individual capacity, but programmes has shown that promoting staff development leads to more loyal staff, who are willing to stay within an organisation and in doing so build organisational capacity. “If talented staff (and volunteers) feels unappreciated, they will move to another job, taking their skills and knowledge capital away from your organisation”. One way to ensure staff feel appreciated is to spend time and money on building their skills, and strengthening their capacity to make good decisions, engage effectively and promote positive change within the sector.

Building better leaders

Arora argued in 2012 that “it is estimated that in India alone, over half a million new senior managers will have to be developed for leadership positions … what is also apparent, is that many of these jobs will be filled by individuals recruited from outside the sector who will have had limited experience of running non-profits at senior level”. What better way to ensure the sector thrives than to develop the future leaders of the NGO sector from within the sector? This means actively and consciously working with current staff to strengthen their skills, develop their leadership and managerial knowledge and expertise, and, in doing so, promote a participatory organisational culture.

Build a mentoring culture: Often NGOs look outside of the organisation for training and support in staff development, when they could be drawing on the skills and expertise within their organisation. This means creating mentoring or coaching programmes for new staff, and mentoring mid-career professionals who want to take on management level roles in the future. Darrell Foster, Head of Learning & Development, recently wrote “good leaders always have a vision and purpose. They not only visualise the future themselves but share their vision”. This is what mentoring is able to promote – a shared vision, shared skills and shared learning.

Build your box: Some great advice keep a box that you fill with important information, highlights, experiences which you will be willing to give to the person who eventually takes over your role. I think this advice can be extended to capacity strengthening so that we should each keep a box of lessons, highlights, notes and anecdotes, which we can share with colleagues or reflect on in our own time. This box should be a reminder of where we’ve come from and what we’ve learnt, how we’ve developed and where we want to go. It should also be a reminder of what we still want to learn and skills we think would be useful in helping us be the best we can be. This should be shared with your manager, so they know how they can help you build your capacity.

The relationship of business with a community is a social transaction which required that both parties be open, honest, and fair with the other in order to achieve maximum effectiveness. Business responsibilities in a community extend in a wide variety of directions from civil rights to support of the community to support of community cultural activities. It is an essential function of any successful business, refers to the various methods companies use to establish and maintain a mutually beneficial relationship with the communities in which they operate.

Business acknowledges the role in the development of the communities within which it operates in order to sustain the business.

At many businesses, Corporate Social Responsibility (CSR) activities have been designed to put a smile on the faces of every individual it serves. Company contributes to developing the local communities in and around the areas where it does business.

For Corporate, community development means building an inclusive society by helping improve the wellbeing of the community and enabling them to prosper. Corporate takes pride in being a business with a heart and soul.

There are many ways in which business involves in community development. Those are stated below.

• Assistance for handicapped and other disadvantaged persons.
• Support for air and water pollution control.
• Servicing responsibility for product sold to the local consumer.
• Support of artistic and cultural activities
• Employment and advancement for minorities and women.
• Assistance in urban planning and development.
• Support of local health care program.
• Donation of equipment to local school.
• Support of local bond issues for public improvements.
• Aid to community hospital drive.
• Executive aid for the local united fund.
• Support to can serve scarce resources and prevent pollution.

A change agent, also known as an advocate of change, is a person who acts as a catalyst for the change management process. They help an organization, or part of an organization, transform how it operates by inspiring and influencing others. A change agent will promote, champion, enable, and support an organization’s change implementation.

A staffing agency is an entity that has staff that can be employed out for temporary or long term work. A staffing agency is additionally referred to as an employment agency. It provides temporary staff. Some agencies are industry targeted or specialised. For instance, The Strategic CFO’s staffing line focuses on accounting and financial positions.

Responsibilities:

• Understand and have deep knowledge about the workload needs of client companies
• Analysis and determine the workforce requirement and try to meet the same.
• Conducting different levels of interviews and shortlisting the candidates accordingly.
• Generate contracts and keep eye on legal issues.
• Detail knowledge about the potential candidates and their background history.
• Conduct training in case of any gaps.
• Taking continuous follow-up and checking the performance of temporary workers.

Role:

• Communicating how change is beneficial for both the organization and employees.
• Listening to the involved team members and employees to gain feedback and incorporate it in the implementation process.
• Understanding employees’ reactions to change and reducing resistance to change.
• Actively engaging with employees by conducting change management exercises.
• Encouraging and supporting employees to become change champions and promote it.
• Identifying and leading other change agents and change consultants to success
• Providing feedback on challenges facing the change management lead.

Services offered:

Contingency search

If you are trying to employ somebody for a vacant position, you may play out a contingency search with a staffing firm. Staffing firms are paid uniquely for fruitful searches; instalment is usually a level of the applicant’s beginning compensation.

You ought to expect a discount on the charge or substitution if the competitor doesn’t keep going for a predefined time frame at your organization.

Agreement recruiting

An organization is expecting to enlist a massive volume of representatives who may pick an agreement scout. Under this game plan, an HR expert is engaged by a staffing company to join a customer organization.

The agreement selection representative will work at the customer organization, during the course of the customer organization. Commonly the staffing firm and agreement enrollment specialist are paid dependent on a concurred hourly rate paying little heed to the number of competitors sourced and enlisted for the customer organization.

Agreement recruiting is regularly utilized as an option in contrast to contingency searches, and it is likewise valuable if the organization is short-staffed in HR and can profit by having a spotter on board rapidly.

Freelance or potentially contract help

This is equivalent to impermanent help; however, architects, innovation experts, and other elevated level representatives will, in general, allude to themselves as freelancers or contractual workers.

Managed services

Under this kind of course of action, a customer organization will re-appropriate a whole office or capacity (e.g., call focus or sorting room) on a proceeding with the premise. This administration functions admirably when an organization wouldn’t like to deal with a particular zone of business and can discover a staffing firm that has some specific ability in the area managed.

Skills set for NGO

Community Organizing

• Group dynamics
• Community integration
• Problem identification
• Community investigation
• Facilitation
• Mobilization
• Communication
• Role playing
• Objectivity, monitoring and evaluation

Participatory Action Research

• Identification of research problem
• Identification of different research tools
• Data gathering
• Analysis of data
• Consultation with the community and validation of data
• Drawing of conclusions
• Making of recommendations

Business Skills

• Planning
• Participatory (circular) management
• Accounting and bookkeeping
• Marketing and purchasing
• Negotiation
• Monitoring and record keeping
• Technical skill in micro-computers
• Organizing cooperatives/credit unions
• Handling labour problems
• Understanding legal aspects.

Documentation, Dissemination of Information

• Small group formation
• Clarification of values and vision
• Group dynamics
• Different kinds of media production
• Communication skills and visual aids
• Conscientization /Senticizing skills
• Advocacy
• Networking and linkages

Training Methods

• Use of cultural forms
• Use of media
• On-the-job training – participant observation
• Workshop organization
• Group dynamics
• Practice-Theory/Action-reflection
• Exposure programme
• Group discussion and synthesis, brain-storming
• Self-learning kits and modules

Technology Training: Appropriate Technologies

• Agriculture, fishing, post-harvest technology, energy, housing, health, sanitation, handicrafts, food technology.

Human Resource Management in NGO

Human Resources can be to the efficient running of their organization. Contrary to popular belief, HR is not just a department that fills out forms and signs off on sick-leave. There is so much more to it, in fact, when HR does a good job, they act like the glue that keeps the company together. NGOs are no different. The reason for this is because just like any other business, one of their main resources is provided by humans. And as such this valuable resources needs to be managed accordingly. Thanks to some major problems faced by NGOs, HR is more important now than it has ever been in the past.

Expert recruiting

Remove some of the pressure when filling positions, get your HR team on the case. Most Human Resources individuals have extensive experience in recruiting and employer branding. They will also be able to implement many automated processes which should remove erroneous applicants and attract more of the top talent. If you have a smooth process and an excellent employer brand you’ll start to see more skilled workers apply for vacancies.

Training and Development

A lot of the time most managers are too busy to properly train or develop their staff. It’s just a simple fact and an unfortunate consequence of the “doing less with more” mentality. More and more these days, the responsibility of training and development seems to lie with the HR department. A good HR professional will be well equipped to deal with career management and organising skills training for an NGO. If NGOs offer a great training program, they will see more of the top talent and fewer resignations.

Organization

We mentioned before that a great HR team acts as the glue of an organization, and that’s usually true. In the sense that they ensure a smooth operation and that the overall corporate culture is well organized. Some people will thrive in chaos, but most don’t. The HR department will ensure proper on-boarding, off-boarding and operations within a company. HR are there to ensure new employees are made to feel welcome and are shown how things work, who people are, the general vibe etc.

Motivation

This is another part of the glue, a positive HR person can have a tremendous impact on the motivation of an organization. Motivation can be hard to come by in a regular company, let alone an NGO. NGOs need to keep their people engaged, involved and motivated and the best way to do that is with an effective HR team.

Addressing the human needs

All employees have what’s called human needs, and NGOs need to effectively address those needs if they are going to retain their staff. An enlightened HR manager knows just what it takes to keep someone on board and happy they need to keep the humanity in HR. This is simple enough to do so long as you address the basic human needs, which are: the need to be appreciated, the need to belong and the need to feel like you’re making a meaningful contribution. If an NGO addresses these needs, it will help solve the problem of staff retention.

The National Human Rights Commission (NHRC) of India is a statutory public body constituted on 12 October 1993 under the Protection of Human Rights Ordinance of 28 September 1993. It was given a statutory basis by the Protection of Human Rights Act, 1993 (PHRA). The NHRC is responsible for the protection and promotion of human rights, defined by the act as “Rights Relating To Life, liberty, equality and dignity of the individual guaranteed by the constitution or embodied in the international covenants and enforceable by courts in India”

Functions of NHRC

The Protection of Human Rights Act mandates the NHRC to perform the following:

• Proactively or reactively inquire into violations of human rights by government of India or negligence of such violation by a public servant
• The protection of human rights and recommend measures for their effective implementation
• Review the factors, including acts of terrorism that inhibit the enjoyment of human rights and recommend appropriate remedial measures
• To study treaties and other international instruments on human rights and make recommendations for their effective implementation
• Undertake and promote research in the field of human rights
• To visit jails and study the condition of inmates
• Engage in human rights education among various sections of society and promote awareness of the safeguards available for the protection of these rights through publications, the media, seminars and other available means
• Encourage the efforts of NGOs and institutions that works in the field of human rights volunteerly.
• Considering the necessity for the protection of human rights.
• Requisitioning any public record or copy thereof from any court or office.

Composition

The NHRC consists of: The chairperson and five members (excluding the ex-officio members)

• A Chairperson, who has been a Chief Justice of India or a Judge of the Supreme Court.
• One member who is, or has been, a Judge of the Supreme Court of India and one member who is, or has been, the Chief Justice of a High Court.
• Three Members, out of which at least one shall be a woman to be appointed from amongst persons having knowledge of, or practical experience in, matters relating to human rights.
• In addition, the Chairpersons of National Commissions viz., National Commission for Scheduled Castes, National Commission for Scheduled Tribes, National Commission for Women, National Commission for Minorities, National Commission for Backward Classes, National Commission for Protection of Child Rights; and the Chief Commissioner for Persons with Disabilities serve as ex officio members.

The sitting Judge of the Supreme Court or sitting Chief Justice of any High Court can be appointed only after the consultation with the Chief Justice of India.

Limitations:

• NHRC does not have any mechanism of investigation. In majority cases, it asks the concerned Central and State Governments to investigate the cases of the violation of Human Rights
• It has been termed as ‘India’s teasing illusion’ by Soli Sorabjee (former Attorney-General of India) due to its incapacity to render any practical relief to the aggrieved party.
• NHRC can only make recommendations, without the power to enforce decisions.
• Many times NHRC is viewed as post-retirement destinations for judges and bureaucrats with political affiliation moreover, inadequacy of funds also hamper its working.
• A large number of grievances go unaddressed because NHRC cannot investigate the complaint registered after one year of incident.
• Government often out rightly rejects recommendation of NHRC or there is partial compliance to these recommendations.
• State human rights commissions cannot call for information from the national government, which means that they are implicitly denied the power to investigate armed forces under national control.
• National Human Rights Commission powers related to violations of human rights by the armed forces have been largely restricted.

NHRC and its Role

The National Human Rights Commission (NHRC) is an independent commission set up by law in 1993. Like judiciary, the Commission is independent of the government. The important objective of the Commission is to protect the human rights. Its functions are:

i) To spread human rights literacy among various sections of the society through media and seminars.

ii) To undertake and promote research in the field of human rights.

iii) To inquire suo-moto or on a petition presented to it by a victim or any person on his behalf.

The advent of information technology has significantly impacted the way retailers do their business. POS informs retailers of the details of sales transactions: what item was sold, where the transaction occurred, at what price, what employee performed the sale, and information about the customer making the purchase. Supply chain management systems (SCM) track the origin of the product even before it arrives at store or warehouse (and will be discussed in more detail in the next section). Financial data systems provide management with data concerning the organizations profit and loss factors. Human resource systems (HRS) keep track of employees: status, title, employment type, salary, address, etc. Customer relation management systems (CRM) track customer information and will be discussed in a later section.

Retail information systems:

For any retail strategy, gathering and reviewing information is valuable. For this, retailers use the RIS (Retail information systems) which anticipates the information needs of retail managers; collects, organizes, and stores relevant data on a continuous basis; and directs flow of information to the proper decision makers.

As computer technology has become more sophisticated and less expensive, more retailers are developing comprehensive information systems. 2 very popular systems are:

• UPC- Universal product code, and
• EDI-Electronic Data Interchange.

Also, to improve inventory planning and forecasting, a new program is now in place. It is called CPFR- collaborative planning, forecasting and replenishment. Also gaining importance is the concept of Database Management, which is used to gather, integrate and apply information related to specific areas.

Database Management consists of:

Data warehousing: Here, the copies of all databases in the company are stored in 1 location and are accessible to any employee anywhere.

Data Mining & Micromarketing: Data Mining involves the in-depth analysis of information to gain specific insights about customers, products, vendors etc. Micromarketing is an emerging application of data mining whereby the retailer uses differentiated marketing and develops focused retail strategy mixes for specific customer segments.

Non-traditional retailing: The various new forms of non-traditional retailing are as follows:

The World Wide Web:

The Web is a useful tool for retailers as it projects a retail presence, helps to generate sales, and most importantly, provides information to customers.

Following are examples of e-tailing:

• Shopping robots, called ‘bots’ are computerized comparison programs that enable online shoppers to search 100s of sites and obtain the best price. They have resulted in a shift of power to the consumer.
• Electronic banking is the hottest thing in service retailing. It helps customers to transact 24 hours a day, 7 days a week at a variety of locations. It includes modern facilities like ATMs, electronic debit payments and smart cards.
• Besides, things like electronic gift certificates and interactive electronic kiosks are modernizing the shopping experience of customers.
• Retailers like Amazon.com, Wal-mart & Fabmart.com are leaders in web-based retailing.

Other emerging, fast-growing nontraditional retail institutions are:

Video Kiosks:

The video kiosk is a freestanding, interactive, electronic terminal that displays product related information on a video screen. Although some video kiosks are located in stores to enhance customer service, others enable customers to place orders, complete transactions and arrange for products to be shipped.

Airport Retailing:

One of the fastest growing sectors in retailing. Today, at virtually every airport, there are full blown shopping areas. Some of its features are as follows:

• The group of prospective shoppers is rather large.
• Air travellers are a temporarily captive audience, looking for a way to fill their time.
• Sales per square foot of retail space at airports are usually 3-4 times higher than at regional malls.

Objective of Retail Information System

• An information system should provide relevant information to retail manager regularly.
• An information system should anticipate needs and requirement of the retail manager.
• An information system should be flexible enough to incorporate constant evolving needs of the consumer market.
• An information system should be able to capture, store and organize all the relevant data on a regular and continuous basis.
• The retail Information systems should be aligned with strategic and business plans of the organization. Therefore, it should be able to provide information, which supports and drives this objective.

Characteristics of Retail Information System

• Retail Information systems Information systems. Retail Information systems should connect all the stores under the company’s
• Retail information system should allow instant information exchange between stores and management.
• Retail information system should handle the various aspect of product management.
• Retail information system should handle customer analysis.
• Retail information system should allow the store manager flexible pricing over a financial year.

The word ‘Retailer’ had been derived from the French word ‘Re-tailer’ which means ‘to-cut again’. Obviously then, retailing means to cut in small portions from large lumps of goods. A retailer is last middlemen in the chain of distribution of goods to consumers. He is a link between the wholesalers and the consumer.

The American Marketing Association defines retailing as “the activities involved in selling directly to the ultimate consumer for personal and non-business use. It embraces direct-to-customer sales activities of the producer, whether through his own stores or by house-to-house canvassing or by mail-order business. The retailer is an intermediary in the marketing channels and is a specialist who maintains contact with the consumer and the producer and is an important connecting link in the mechanism of marketing.

Characteristics of a Retailer

• In the entire distribution chain, a retailer is considered to be the final link, who deals directly with the customer.
• A retailer essentially maintains a variety of merchandise.
• A retailer purchases in bulk from the wholesalers and sells the products to the customers in small quantities.
• The aim of a retailer is to achieve maximum satisfaction by exceeding their expectations and delivering exceptional services.

Functions of Retailing:

• Assembling of goods from various wholesalers.
• The providing information concerning the nature and use of goods to the wholesalers and producers. It also informs as about the market trend.
• The physical movement and storage of goods for the supply to the final consumers to meet their needs and requirements.
• The standardisation, grading and final processing of goods which have been left in graded or unstandardised by wholesalers.
• The assumption of risk concerning the price, nature and extent of demand of goods as long as they remain unsold.
• The provision of ready availability of goods of various qualities and of various manufacturers.
• The financing of inventory and the extension of credit to consumers for a short period.

Pre-Requisites of Retail Trade:

The success of retail trade is based on a proper combination of the following factors:

(i) Locations:

The ultimate success of a retailer depends on the location of his shop. Proper selection of location is important for a retailer to establish his business.

(ii) Price:

A proper pricing policy can give better results for a retailer if he can combine low prices with good quality to attract consumers.

(iii) Sales Promotion:

A retailer must arrange for proper sales promotion campaigns in order to familiarise the customers of that area with his products.

(iv) Prudent Buying Principles:

Every retailer ought to be a shrewd purchaser; only then he can give his best to his customers. Careful buying earns rich dividends in retail trade.

(v) Knowledge of Merchandise:

Modern business is so complex and the variety and quality of goods being so diverse, a retailer must have adequate and latest knowledge of the wares he sells. It would not only enable him to answer customer queries satisfactorily but also to handle the complications of his business. Thus adequate knowledge of merchandise is another pre-requisite feature of retail trade.

(vi) Services:

A retailer should concentrate on his services. Courteous and prompt service on his part will help him in attracting more and more customers and thereby flourish in his business. Most retailers go in for after sale service also, where they cater to the needs of the customers after the latter has purchased a commodity from them. So efficient service should be the motto of every retailer.

(vii) Efficient Management:

Better planning, organisation and control by a retailer can offer efficient retail operations. A retailer should have a proper and adequate work-force to assist him in his business. He should always keep stocks ready for customers and even offer specialised comments on the products he deals in. If a retailer plans his inventories and works in advance, there is no doubt that he will achieve his targets and also attract more customers.

(viii) Display of Goods:

Since a retailer deals in a verity of products, he must display his goods in a proper and orderly manner. This will enable him to get what is required by the customer quickly and also help in attracting customers. The retailer must go in for tastefully decorated interiors and also have proper and attractive window-dressing and display.

The goods must be neatly and orderly stocked and the pattern of window display should be frequently changed for the better, so as to attract the customers’ eye. A retailer must not forget that a well laid out window display will help him to entice and attract customers from his rivals and competitors. Hence, proper care and attention ought to be given for display of goods out as well as in the retailer’s shop or showroom.

Functions of Retailers:

(i) Buying:

A retailer deals in a variety of merchandise and so he buys collects large number of goods his stocks from a variety of wholesalers. He selects the best from each store them and bears wholesaler and also pays the most economical price. He brings all the goods marketing risks, under one roof and then displays them in shop. Thus, he performs the twin functions of buying and assembling of goods.

(ii) Storage:

After assembling the goods, the retailer stores them in his godown so that they are held as reserve stocks for the future. Storage of goods in ready stock is also necessary.

(iii) Selling:

The ultimate aim of every retailer is to sell the goods he buys. So he employs efficient methods of selling to dispose off his products at a faster rate so that he can increase his turnover in a period of time.

(iv) Risk-bearing:

The retailer bears the risk of physical damage of goods and also that of price fluctuations. Moreover, risk of fire, theft, deterioration and spoilage of goods has also to be borne by him. Changes in fashions, tastes and demand of his customers also have an adverse effect on his sales; nevertheless a retailer does not lose heart. He bears all these trade risks which come in his way during the normal course of business.

(v) Packing:

A retailer packs his goods in small packets and containers for his customers. Occasionally he may be required to grade the goods also.

(vi) Credit:

Often retailers grant credit to customers and also bear the risk of bad debts, which go along with credit sales.

(vii) Supply Information:

Retailers supply valuable market information to both wholesalers and customers.

(viii) Advertising:

Retailers display goods and spend on advertisement also.

Retail accounting isn’t a special kind of accounting process or system, but rather an inventory valuation technique often used by retailers. It differs from “cost accounting” for inventory in that it values inventory based on the selling price rather than the acquisition price.

The retail method is an accounting method used to provide a comprehensive account inventory at the item’s retail price in order to detect losses, damages and theft of stock allowing small business owners to track costs, keep account of the goods you’re buying or selling, know how much is left over, and maintain the right amount of inventory at all times.

The retail method uses the cost to retail price ratio to estimate the value of the inventory. To calculate the value of ending inventory, you need to follow these steps:

• Maintain a comprehensive record of purchases and on-hand goods at cost price and retail price
• Calculate a cost-to-retail ratio

Formula = Cost price x 100 / Retail price

• Estimate the ending inventory at retail prices by subtracting the retail price of goods sold from the retail price of goods in inventory
• Convert the estimated inventory at retail price to cost price by applying the cost-to-retail percentage.

Advantages

• This accounting method involves easy calculations, as all units of one item have the same price and experience the same changes in the price.
• It is convenient for retailers operating multiple stores, as it can save time in conducting physical inventories.
• In retail accounting, preparing financial statements gets easier due to simple calculations.
• This method is independent of labour-intensive physical inventory counts.

Disadvantages

• This method can be inaccurate in the event of pricing changes.
• This type of accounting can be ineffective or more complex with the introduction of discounts.
• Retail accounting often involves assuming unrealistic pricing conditions and it may be unable to provide the exact price values.

Applications:

Retail accounting for discount in sales

Sometimes, retailers may offer a reduction in the cost of the product in exchange for early payment by the customer. In many cases, retailers offer a discount when they are short of cash. When a customer takes advantage of this sale and pays less than the full amount of the invoice, the retailer records the discount as a credit to a receivable account and a debit to a sales discount account.

Retail accounting for returns

If an order gets processed, delivered and then returned within the same accounting period, retailers can make the necessary adjustments to the balance sheets. When the return happens in the sales time period, it may show an extra profit in the sales. Usually, the return process involves a credit to the receivable account and a debit to the sales return account.

Uses:

1. Calculate cost-to-retail percentage

The first step involves finding the cost-to-retail percentage of a retail inventory. You require the total purchase price of the inventory and the selling or retail price. Here is a formula to calculate the cost-to-retail percentage:

Cost-to-retail percentage = (Cost of inventory / Retail price of the inventory) x 100

For example, if a store buys an inventory for ₹500 and sells it for ₹1000, they can calculate the cost-to-retail percentage by using this formula:

Cost-to-retail percentage = (₹500 / ₹1000) x 100 = 50%

2. Find the cost of inventory available for sale

After determining the cost-to-retail percentage, calculate the specific time period of reporting. Then, find the cost of inventory at the start of that time and the cost of additional purchases during this time. Here is the formula that you can use to find the cost of inventory available for sale:

Cost of inventory available for sale = Cost of beginning inventory + Cost of additional purchases

3. Determine the cost of sales

Next, you can calculate the total cost of sales for a particular time period. You can use the total amount of sales and the cost-to-retail percentage for the calculation. The result represents the total amount gained when selling the inventory. Here is a formula that you can use to determine the cost of sales:

Cost of sales = Total amount of sales x Cost-to-retail percentage

4. Determine the ending inventory

After calculating the cost of sales and the cost of inventory available for sale, you can calculate the ending inventory. Ending inventory is the value of stock that a retail business has at the end of a particular reporting period. After determining the ending inventory, retailers can include this information on the balance sheet. Here is a formula to find the ending inventory value:

Ending inventory = Cost of inventory available for sale – Cost of sales during the reporting period