The online store outsold the branch this month. That seems a good reason to move more marketing money online—until shipping invoices arrive, returns increase and some orders turn out never to have been delivered. The comparison changes: the channel with more sales may have contributed less profit and may still be waiting for its cash.
A useful sales-channel dashboard brings these differences into view. First, however, it needs an agreed definition of a sale. A payment-terminal report, an order report and a revenue report describe different events. For a Saudi retailer operating both physical and online stores, consistent definitions matter more than chart colours.
When two sales figures are not comparable
An online platform might count an order as soon as it is placed, whereas the branch records a transaction after the customer pays. Displaying both under “sales” gives the online store an artificial advantage. A cancelled order or a paid order awaiting delivery is not equivalent to a completed sale for revenue-recognition purposes.
Let the operating dashboard show orders and their stages. Compare revenue using a consistent recognition basis. Exclude VAT when comparing revenue and profitability, but retain tax-inclusive amounts when reconciling collections. Many apparent system discrepancies disappear once the purpose of each number is clear.
How much did each channel actually contribute?
Consider this educational example. Amounts exclude VAT and are net of the relevant sales returns. The listed direct costs are borne by the business; shared operating expenses are not included.
| Amount in SAR | Branch | Online store |
|---|---|---|
| Net sales | 100,000 | 120,000 |
| Cost of goods sold | 65,000 | 78,000 |
| Payment fees | 900 | 1,800 |
| Direct shipping and packaging | 0 | 9,000 |
| Channel contribution before shared expenses | 34,100 | 31,200 |
Online revenue is SAR 20,000 higher, yet contribution is SAR 2,900 lower. That does not mean the online channel should close. It might be acquiring customers, or its economics might improve when several items travel in one order. It means expansion requires an explanation of the cost of serving orders, alongside the sales figure.
Branch contribution is not final profit either: rent, payroll and shared expenses are outside this example. A second layer can show results after costs specific to each channel, followed by a third layer allocating shared costs on a disclosed basis. Changing that allocation every month makes trends harder to interpret.
Bought online, returned in the branch
A customer orders online and returns the product in a branch. Charging the return against branch sales without linking it to the original order understates branch performance and flatters the online store. Keep the original sales channel for revenue analysis and record the return-processing location for service workload. Both measures are useful, but they answer different questions.
The same issue arises with click-and-collect. Decide in advance how sales are attributed, how preparation and handover are recorded, and where customer-acquisition costs belong. There is no single management rule for every business. There does need to be a stable rule that report users can understand.
A small set of useful measures
- Average order value: is growth coming from larger baskets or more orders?
- Returns as a percentage of sales value: which products or descriptions create mismatched expectations?
- Shipping and packaging cost per completed order: are small deliveries consuming margin?
- Amounts due from payment providers: how much collected revenue has not yet reached the bank?
Saudi Central Bank point-of-sale statistics can help put trading conditions in context. They are not an automatic target for an individual store. Your location, product mix and seasonality may differ from the statistical aggregate. Use external comparisons to identify a question, then look for the explanation in your own transactions.
For the next performance meeting, choose one material difference: why did online contribution fall even though average basket value increased? Free-delivery usage may have risen, or one product may be generating expensive returns. When the dashboard leads to a specific adjustment in pricing, product descriptions or delivery policy, it becomes part of managing sales rather than simply displaying them.
Sources & further reading
Visit the original source to explore the concept and its wider context.
General educational content. Appropriate treatment depends on your business and accounting policies; consult your accounting professional when applying it to business records.
