• Way-you-use-it

It’s an Eric Clapton song, from the movie The Color of Money. But it’s also true of the value that you’ll get from your Inventory Accounting Software. It’s in the way that you use it.

Take the example of two companies in similar industries, both using the exact same software. Company A considers the software to be an administrative tool, used purely to record transactions, generate documents for shipping, etc. and for their basic accounting needs. In other words, it’s simply a way to automate previously manual processes. It works for them, and very well, in that context, but that’s all they use it for.

Company B considers the software and its implementation and use to be part of a set of strategic tools to help grow the company and improve the bottom line. So Company B uses it for all the things that Company A does, with similar benefits. But Company B then takes it further, recognizing that in processing all these transactions and recording all the information, they have created a goldmine of potentially valuable information about their business. So they do what all smart owners of a goldmine would do: they mine it for valuable nuggets. They invest the time, effort, thought and money to generate useful real-time reports, alerts, triggers to help proactively detect and prevent problems, and recommend improvements. They also take advantage of the technology offered by both their Inventory Accounting Software system, and other tools they use (such as Excel) to integrate data and have it flow back and forth automatically, without manual entry.

One specific example (yes, Company A and Company B are both real businesses, and this is a real example): Company B managers receive an automated report at the end of each day summarizing any key exceptions they should be aware of, in terms of anomalous sales margins, late arriving purchases, and overdue outbound deliveries. If there are no problems for that day, the report is empty, so they only look at details that need attention. Company A, on the other hand, did not want to spend the time, effort and money to set this up. So instead they look at detailed reports every day on all sales, and all purchases, and try to manually spot the problems. Guess what? They frequently don’t get around to looking through all those pages and pages for several days, by which time it’s too late to deal with the problem. And during the hours they spend each week wading through reports, their competitors (like Company B) are out there talking to customers and generating extra sales instead.

Two companies, the same software, different results. It’s in the way that you use it.