Inventory & Accounting ERP Software Blog
Call : 1-877-258-5465

How the Right Software Tools Can Make or Break Your Black Friday Success

With Black Friday and Cyber Monday just around the corner, retailers are starting to gear up for the impending influx of instore and online shoppers. Preparation for Black Friday and Cyber Monday is well underway as businesses look to beat the competition with better deals that last even longer. As the November 23rd date approaches, marketing departments are busy creating ads instore and online and ramping up their social media presence to further spread the word of upcoming deals. Warehouse staff are preparing by reorganizing high selling items to optimize the picking, packing and shipping process, developers have started to implement code to ensure websites will be able to handle an increase in site traffic and retailers are beginning to hire and train extra staff to work with customers instore. However, to thrive (and survive) during these upcoming shopping holidays, businesses need to ensure they have the right back-end systems in place – the right ERP for managing inventory and accounting, the right point-of-sale (POS) system for managing retail counter sales, and the right eCommerce platform for online purchases.

ERP

The right ERP system is the backbone of your business. All information is managed and stored from within a single database allowing the flow of information across all business departments. Unlike accounting software, ERP accommodates other business processes such as inventory and warehouse management, CRM, eCommerce, POS, barcode scanning and more. With ERP, businesses do not need to manually enter information across multiple disconnected solutions – a method that is time-consuming and prone to human error. Information automatically updates across departments. Sales orders easily become invoices and purchase orders, and picking slips are generated and sent to the warehouse. Purchasing decisions are made using live data from within the system based on inventory levels, orders from all sales channels accumulate for picking, packing and shipping, and barcode scanning improves the receipt of inventory and the shipping process.

POS

Point-of-sale software allows a retail store to create a transaction with the customer paying on site. Customers have the option of paying by gift card, on account, in multiple currencies, with split payments and more. When selling product through multiple sales channels (such as retail, eCommerce and wholesale) it is important that information syncs in real-time. What happens if you sell out of a product instore and decide to order 100 more – without realizing that the warehouse just received a shipment of the same product? This is where ERP software with POS functionality comes into play. In this situation, since all information is maintained in a single database when you run out of the item in the store, the system will show what (if any) is available in the warehouse or is already on backorder. This is just one example of how ERP can help manage processes across multiple sales channels and business departments.

eCommerce

As eCommerce sales continue to grow during shopping holidays, it is important that you have the right platform and solutions in place to handle the entire order process. A robust and atheistically pleasing front-end store is important to convert visitors into customers, however, what happens after the customer places an order online? How does the warehouse staff become aware that an order is ready for picking, packing and shipping? What happens if that product is out of stock? Once again, this is where ERP software comes into play. Integration between your ERP and eCommerce store will enable the transfer of information bi-directionally so that data flows in an efficient and automated way. When an order is processed online, it automatically is pulled into your ERP, inventory levels update, and the order is sent to the warehouse. Once that order is shipped, confirmation and tracking information then flows back online for the customer to see.

Black Friday and Cyber Monday are not just about maintaining fully stocked shelves, and which company provides the best deals – it’s also about optimizing back-end process to efficiently fulfil orders.

 

By |
Read More

7 Repetitive Tasks Your Competitors are Automating with Business Management Software

We all have some tasks in our workday that we dread doing. Most of the time, these to-dos are often repetitive, mundane and simply boring work that we can’t help but procrastinate on or rush through simply to get it off our plate. This costs your wholesale distribution business money – the time and effort employees spend on these tasks hinders your bottom line.

So what are your successful competitors doing to counteract these snooze-inducing repetitive tasks that take away from meaningful work, and how do they keep employees engaged in their work and reduce turnover rates? The answer? Automation. Thanks to today’s advancements in technology, many wholesale distribution businesses have adopted business management software to automate a number of these tasks and free up time for employees to focus on things that really matter in the business.

It seems like a very simple concept, yet many businesses have no idea which tasks to automate or how to begin the process of automating, let alone deciding which software is right to do so. Below are some processes we’ve seen customers save hours and even days by automating with business management software. Consider the following as best practices for your business.

Integrate Your Sales Channels

We speak with many prospects that come to Blue Link when they have had enough of manually re-keying information into multiple systems and spreadsheets. A key reason for this repetitive work is that the various sales channels of the business are all disconnected. Businesses that have multiple sales channels such as eCommerce, online marketplaces such as Amazon, tradeshows, POS systems, phone, email etc, have to dedicate a number of resources to managing sales orders that come in through these various platforms to ensure all orders are being fulfilled.

Implementing the right business management software acts as a central hub, storing all sales information in one system. This means that regardless of the channel a sale comes in through, it is accounted for in the system so employees have information that is always accurate and in real-time.

Not only is data centralized, but employees no longer have to manually update things like inventory counts once a sale is made. Let’s say you have 100 shirts and someone orders 50 shirts from your eCommerce site. No manual intervention is required to update the inventory count for that particular item online or in your business management system – integration between both applications means inventory is updated automatically.

Landed Costs 

Another time-consuming repetitive task is the need to track landed costs – we speak with many businesses that do not have software that calculates true inventory cost meaning fees such as duties, freight, and shipping costs associated with a product. They have to manually enter these fees into all their purchase orders. We can agree that this is definitely not a good use of your limited resources.

Some business management software such as Blue Link will have functionality to automate landed costs which allow our customers to make informed purchasing and pricing decisions. They can also track the true inventory costs and associate different percentages based on things like the weight of a product.

Document Management

When you think of the repetitive tasks that you do on a daily basis, chances are most of them include some sort of document management whether it’s manually transferring data from documents or retrieving information from documents. These tasks often take up the most time out of your day which is why electronically managing documents is one of the best competitive advantages you can have.

Blue Link business management software customers have the option to include the electronic data management component, DocuWare into the system. Docuware allows users to instantly access files from anywhere on their computer or mobile device. They can index important data in seconds and quickly look up any documents using search functions in the application. No more manually keying in data. This is also beneficial for your sales team who need quick access to various documents when they’re speaking with customers or even suppliers.

Inventory Reordering

If you just rolled your eyes at the thought of this task – you’re not alone. It goes without saying that it is quite difficult to manage the reordering of product, especially when dealing with large quantities of inventory movement. Tracking the movement of product and having access to historical sales information on specific products is crucial to making smart reordering decisions. Manually tracking this information and getting reordering “just right” is challenging for any type of business. This is why many wholesale distribution businesses have automated the reorder process with technology such as business management software.

For example, users can generate reorder reports in Blue Link where historical sales data pulled from the system within a given timeframe indicates the number of units presently on-hand for multiple items, the product on backorder, the product on purchase over and average product sold within a given timeframe that you choose. You can set criteria/values in these live linked reports to alert you when stock is getting low and needs to be reordered and the quantity that needs to be reordered. Then, with the push of a button, you can send the reorder information back into Blue Link to generate purchase orders for those specific items.

Verification Scanning 

Your warehouse workers who are responsible for the picking, packing and shipping of orders most likely have the largest number of repetitive tasks on a day-to-day basis. While not all repetitive tasks can be eliminated due to the nature of the role, you can make processes a little easier with the right business management software.

For example, once a worker has picked an order, they can use verification scanning to pack the items. What this means is that they will be able to cross check the items against the pick slip/ sales order numbers stored in the system to identify any issues.

Customer Information

If you are a growing business, I’m sure you’ve heard employee grievances about re-keying customer information, especially if your business deals with credit card payments. Imagine only having to key in credit card information and customer information once. When a repeat customer makes an order, employees no longer have to ask for their information such as shipping address, credit card number, phone numbers, emails (the list goes on) each time if it is already entered into the business management software.

Reporting & Analytics

Depending on the business management software vendor you choose, you will be able to leverage data already entered into the system in order to automatically generate reports. These reports can be updated within a period of time using the live linked data from the system to gain real-time insight into business health.

For instance, let’s say your sales department manually tracks top products sold by the number of units purchased. This can take hours and hours of manual data entry, whereas with the right business management software, once a product is purchased, that sales data lives within the system. Salespeople can then quickly query all products sold within a given timeframe to gain instant insight into higher performing as well as low performing products. They can also automate the distribution of these reports to the appropriate stakeholders.

Click the image below to contact us to learn more about how automation can help your business.

By |
Read More

As B2B eCommerce Sales Outpace B2C, Customer Values are Changing

It’s impossible to read the news today without learning about changing trends in the world of eCommerce. Amazon is constantly making headlines with its increasing market share and new product offerings, Shopify is gaining the attention of businesses from around the world as it starts to expand on an international scale and Adobe recently added to its conglomerates with the acquisition of Magento. However, it is within the less discussed world of B2B eCommerce and not B2C where the real opportunity lies with worldwide B2B eCommerce sales outpacing B2C by more than threefold in 2017. Add to this the fact that most B2B eCommerce orders have a higher than average dollar value, include fewer “one-item” orders which simplify the picking, packing and shipping process, have lower B2B shopping cart abandonment and higher conversion rates, and you have the perfect recipe for market expansion.

B2B Strategy

A B2B strategy has historically been quite different from that of B2C – and rightfully so. There are many differences between B2B and B2C customer expectations, product offerings, sales experiences and general interactions. B2B purchases are frequently made using objective criteria such as price, warranties and service levels, and the expectation is that B2B vendors automatically design products to meet specifications, comply with regulations, follow ethical practices and compete on pricing. In a recent study by Harvard Business Review, however, research shows that more and more business decisions are based on subjective criteria and that there is actually little difference between B2B and B2C decision making. The study, which outlines the B2B elements of value, and how to measure and deliver what business customers want1, makes the case that traditionally most business decisions were based on rational and quantifiable criteria, but meeting these criteria today is just the cost of entry. Instead, B2B offerings are starting to become more and more commoditized and as a result, customers are making decisions based on subjective and sometimes quite personal feelings – typically more common among B2C purchases. Common examples of subjective criteria include the ability for a product to enhance the buyer’s reputation and reduce anxiety. Understanding the full range of rational and emotional factors that make up the B2B customer experience and the roles these factors have on decision making is imperative to succeed in the market.  Businesses need to tailor their value proposition to meet this new way of thinking in order to build customer loyalty and increase sales.

Elements of B2B Value

The study on B2B elements of value aims to help businesses better understand this changing B2B customer landscape. Through the study, HBR categorized elements of value that influence business buying decisions, starting with the more traditional objective elements and then moving on to the more subjective elements. The categories outline how people in corporate roles make purchasing decisions and what motivates them to purchase and use business products and services. These categories are as follows:

Table Stakes: Table stakes are the bare essentials when it comes to meeting purchasing criteria. These values can be summarized as the ability for a product or service to meet business specifications at an acceptable price, while in compliance with regulations and ethical standards.
Functional Value: Functional value elements are where most B2B vendors and buyers focus attention. These include features that address a buyer’s product performance needs such as cost reduction and scalability.
Ease of Doing Business: Elements that increase the ease of doing business include the ability for a product or service to save a company money, reduce the effort of employees, simplify processes and increase organization. These elements are also more traditional in nature and have typically been included in the value proposition of many businesses. However, it is at this point that we start to see some subjective criteria – such as the perceived responsiveness and expertise of the B2B vendor.

Objective values tend to be easier to measure and are more straightforward to compete on, but these no longer have the biggest influence on customer decision making. As technology continues to improve product design, businesses now need to focus attention on more subjective customer considerations and meeting personal customer expectations. The more subjective categories include:

Individual Value: For employees involved in making purchasing decisions, it is imperative that the supplier provides value to the buyer in terms of their personal priorities or career-related priorities. Buyers who spend large amounts of money and make decisions that affect the company and its employees and revenues, need to feel confident in their decision making without fear of failure. In this regard, the HBR study identified that buyers are looking for a vendor who can increase their marketability or network expansion, provide reputational assurance and offer products that are appealing in design and aesthetics. These elements of value are extremely important as they address highly emotional concerns and most decisions are emotional, not logical.
Inspirational Value: Inspirational values include the ability for a product/service to help a firm anticipate changes in the market, provide hope for the future of the company and its employees or enhance a company’s social responsibility.

B2B Adoption of B2C Features and Differences

Understanding each value element and determining which ones are most important to your customers will help with the design and implementation of a successful B2B eCommerce strategy. Smart B2B companies are already taking advantage of traditional B2C eCommerce features in order to address more subjective purchasing habits such as:

Using high-quality images and videos
Robust onsite search functionality
Adding social proof in the form of reviews, ratings and testimonials
Offering personalized product recommendations
Providing dynamic pricing based on customer information, available promotions, and volume discounts
Flexible shipping options including in-store pickup, real-time product and stock availability
Mobile optimization and
Easy access to a knowledgeable customer service team

Some of these B2C features are actually even more important for B2B customers – for example, site search – as B2B customers need the ability to search by very specific product specifications such as part numbers, manufacturer, product type or item details.

Another option is for B2B companies to take a hybrid approach, where the eCommerce homepage is designed following B2C best practises and then site visitors can log in to a gated B2B back-end site. This makes it easier to capture new leads and rank for SEO, while still providing customers with a personalized, secure experience once logged in. Even with all the similarities between the B2B and B2C shopping experience, there are still significant differences. B2B customers need to be able to easily set up an account to purchase product, which typically involves interaction with a customer service rep to negotiate pricing and terms. Therefore, B2B websites need to make it easy for new customers to sign up for an account. B2B customers also have different pricing. A dynamic website needs to include customer specific pricing as well as functionality for managing volume discounts, promotions and specials in real-time.

B2B eCommerce empowers the customer to take ownership of the purchasing process. Buyers want the option to self-educate as opposed to listening to a salesperson. Product recommendations, similar items, inventory specifications and demonstrations all help make the sales process as efficient as possible. Done properly, B2B eCommerce also has many benefits to the supplier as well, and not just the customer. These benefits include:

The customer is less likely to complain and make mistakes when they are responsible for ordering product themselves, which in turn, helps to reduce the number of RMAs.
Your business is able to operate 24/7 without the need to hire additional staff.
It is often easier to communicate a product’s benefits online with the help of visual aids, specifications and demo videos, as opposed to trying to provide information over the phone.

To succeed in B2B eCommerce, companies need to shift their mindset to follow the best practices of B2C companies and start to learn about which personalized, subjective buying criteria matter most to their customers.

1 Information in this article is based off research from the Harvard Business Review Feature: The B2B Elements of Value. Almquist, Eric, et al. “The B2B Elements of Value”. Harvard Business Review, Harvard Business School Publishing Corporation, 1 Mar. 2018, hbr.org/2018/03/the-b2b-elements-of-value.

By |
Read More

Do you Really Need that Report? 5 Questions to ask Yourself Before Creating a Report with Wholesale Software

Running and maintaining periodic reports for your wholesale distribution business is pivotal in making strategic decisions on various aspects of your organization. Looking at the right data helps businesses determine things like the quantity of product to reorder, when to place items on sale/discount or eliminate, and even helps in creating specialized campaigns that target various levels of customers based on order amounts. All these activities contribute to the end goal which is to ultimately improve the bottom line. However, many employees waste countless hours drilling into data that is meaningless in understanding business operations.

Identifying what information to report on for your businesses is like sifting through dirt to collect a few gems. It is not necessary to report on everything under the sun and can even be counterproductive to do so. Reporting for employees can certainly seem daunting, even when using sophisticated technology such as wholesale software to automatically generate information, in real-time, on any area of the business.

To make sure you are getting the reports you need, in a format that is easy to understand, here are some time-saving questions to ask yourself before you run your next report or request a custom report form your wholesale software vendor.

1) What is the Main Purpose of the Report?

Before you even consider creating a report, organize your thoughts on why you want that specific data. The data in the report should be purpose-driven. Ask yourself, what will this information help you accomplish or how will it contribute to the objectives of the company? The below are a few common business reports that Blue Link’s wholesale software offers to our customers to get you thinking about what type of information/objectives you should be looking at.

Top Inventory Sales by Unit – Creating this type of report offers insight into the best selling products in your inventory and allows you to make a strategic decision on pricing and order quantity to keep this item in stock.
Inventory Slow-Moving Items – With this information, it’s easier to determine promotional activities such as discounts/sales that will help move those items faster through your inventory or help determine if you want to stop selling that item altogether.
Sale by Date – This type of information will help you determine the progress of sales throughout the years or given time period. You can also identify when in the year sales are at the highest (if there are clear patterns) and plan targeted campaigns to leverage high peaks or improve low producing months such as offering special discounts to new buyers.
Exception Reports – These are reports created to alert individuals to something that has gone wrong. For example, a price and margin exception report will alert the appropriate person which sales orders for the day have a gross margin that is below the acceptable threshold.

2) Who are the Primary Users of the Report? 

Once you identify the objective of the report, it’s also important to identify the users of the report. How many people can leverage this data? Think outside of the box to make the most of the data and don’t limit the information to just yourself. You may find that sharing such data with the applicable people will aid in improved productivity in various roles.

However, if there are multiple users for this report, it’s important to include all of them in the planning process to make sure the whole team is on the same page.

3) How Frequently Will Users View the Report?

Another question to ask yourself is the number of times that users will view the report. Is this a daily, monthly, quarterly report? For example, a report like a daily average sales report will show the average daily sales in units over different periods of time (last month, last quarter, last year  etc.)  However, it doesn’t mean that users need to view this data every day depending on the unique needs of your business.

4) What will the Report Layout Look Like?

It’s also important to think of the details such as the report title and column header names.  Thinking this information through ahead of time will help you identify if there is additional data you want to include in the report. Identify what do you want the report to look like. You may decide to have different formatting per column depending on the information. For example, you may want to bold the total amounts for specific columns for easier reading.

Details such as sort order, sub-headers/subtotals, selection criteria such as the date, through date, customer, product class etc. are also important to identify before creating the report in order to ensure that you have all the necessary data to reach your end goal.

5) What is the Correct Reporting Tool?

Depending on the nature of the report, a specific reporting tool may be better to use over others. At Blue Link, we support a variety of reporting tools such as SQL-Server Reporting Services, Crystal Reports, Excel, ARM, Spreadsheet Server and Power BI which all serve specific reporting needs.  Blue Link customers can generate any report/chart in any format using information from within Blue Link itself or other applications.

Automating Reporting with Blue Link Wholesale Software

While reporting is always a good idea, it’s important to do it in an efficient manner so you’re not spending hours or even days on collecting data. Automation is key to not waste time with manual data entry which is prone to human error. Automation is also important if you need to share the report with other members of your team. Blue Link allows users to schedule reports to send to the appropriate people via email. Other benefits include:

Completely customizable report creation.
Ability to leverage data already entered into Blue Link in order to generate a report, render it a PDF, create an email, put your message in the email and send it to all appropriate stakeholders – automatically.
Ability to write back to your wholesale software, add a new record to your notes or simply update a field, changing a status.
Ability to create a report based on data within the system that updates on an automatic basis for real-time insight into business health.
Fax message/report to your customers through your email automatically.
Live link Blue Link data to Excel to easily create reports and pivot tables with the ability to automatically refresh data every time a user accesses the report.

Blue Link also provides dashboard views that quickly provide powerful insight into business health including summaries of complicated data translated into digestible views. It allows the user to create a visual display of organizational KPIs, metrics, and data that are pulled live from the system with the benefit of owners and employees being able to analyze the information in mere seconds. Users can also drill down into the data used in the reports that are displayed in the dashboard for a more granular, investigative view.

 

By |
Read More

The Role of High Emotional Intelligence in Software Implementations

Psychologists have long been preaching the importance of high emotional intelligence in great leaders. These soft traits are frequently overlooked compared to the more traditional traits associated with quality leaders – such as intelligence, toughness, determination and vision. However, some researchers such as David McClelland, argue that emotional intelligence is more important than analytical skills and that not only are they an indication of great leaders, but they are also linked to strong company performance. Great leadership plays a role in all departments of a business and can significantly impact the success of large business projects, such as the implementation of new wholesale inventory software. The right wholesale inventory software will be able to manage processes across all business departments – from inventory, accounting and warehouse operations to purchasing, sales and customer service. However, this means that the implementation process takes time and requires dedicated human resources. It is not something that will happen overnight, nor should it. Finding and implementing wholesale inventory software will be one of the biggest decisions your company makes in any given year – and is comparable to any major business purchase such as acquiring additional warehouse space or equipment. To ensure the project goes as smoothly as possible, it is best practice to assign someone within the business as the Project Manager to oversee the implementation of the new system and to drive change management within the organization. When choosing the right person for the job, consider someone who not only understands business processes across all departments but also exhibits the following traits of high emotional intelligence.

Self-Aware

Many people claim to be self-aware, but, few actually are. To be truly self-aware, one must neither be overly critical nor unrealistically hopeful – which can prove beneficial when implementing organization-wide change and in trying to get employees to adopt new wholesale inventory software. Implementing new software requires a review of processes and systems across all business departments, to spot inefficiencies and find new opportunities. There is no point denying that any big organizational change will have its fair share of ups and downs – people are resistant to change, evaluating processes takes time and energy, and requires that employees learn new skills and processes, all while still keeping on top of their day-to-day tasks. Project Managers who are self-aware will be honest with themselves and with others and they will be able to recognize how their feelings affect them, other people and their job performance. This means they are able to control their emotions during times of high stress to help put other people at ease. When employees inevitably become frustrated or stressed during the implementation, self-aware leaders can recognize where these feelings are coming from to work with employees to move forward through the transition.  It is important for Project Managers to explain the benefits of the implementation and to acknowledge the roadblocks that will be encountered along the way.

Self-Regulation

Those with high emotional intelligence will be able to self-regulate – in other words, they are able to channel their emotional impulses in useful ways and are not prisoners of their feelings. This is beneficial when dealing with employees who are resistant to change – instead of becoming frustrated with a lack of co-operation during the implementation, Project Managers who can self-regulate will schedule a time to discuss the situation with the team, reiterating the benefits of the change. They will show patience with helping employees change habits and learn new skills. They will even go one step further and try to identify the underlying reasons for issues and employee resistance – looking internally to spot root causes. People who can self-regulate and are therefore in control of their emotions are seen as reasonable and as a result are able to create an environment of fairness and trust. This, in turn, leads to trust among employees that the new system will provide benefits for everyone and the company as a whole and significantly reduces any negative politics and infighting. In general, people who have mastered their emotions are able to roll with changes better and more quickly.

Motivation

People with a high degree of motivation are driven to achieve results above their own and everyone else’s expectations. They are intrinsically determined to achieve for the sake of achievement itself – as opposed to for some external reward such as an increase in salary. This translates into a love of learning, unstoppable energy to improve processes and an eagerness to find new approaches to become more efficient at work. When presented with a new challenge – such as implementing wholesale inventory software – they are driven to do whatever it takes to make the transition as smooth as possible and to design processes that allow employees to reap the full benefits of a new system. This positive attitude and energy helps to motivate other employees and increases the success of the project.

Empathy

Those Project Managers with a high degree of empathy thoughtfully consider the employee’s feelings when making decisions. This is not to say that they don’t also factor in other considerations, but they are upfront about their decision-making process and work to keep everyone informed and treated fairly. When employees feel comfortable being upfront about their concerns and frustrations, it leads to better collaboration among team members. This helps to ensure any issues are addressed as soon as possible to reduce the chances of delaying the learning and implementation process.

Social Skills

Having good social skills means more than being friendly and able to hold a conversation – it is friendliness with a purpose, allowing you to move people in the direction you desire. When looking to implement organization-wide change, it refers to the ability to get employees to adapt to change, modify existing processes, and be open to learning a new solution. People with strong social skills are expert persuaders – a key component to getting employees on board with change. If employees believe in the positive benefits of new wholesale inventory software, they are more likely to be active in its implementation and success.

By |
Read More

Managing Costing Methods with Blue Link Distribution Accounting Software [FIFO and Average Cost]

Any wholesale distribution business that buys and sells inventory knows the importance of assigning the right dollar value to the inventory items – especially in an industry where large quantities of product are sold at a time. Inventory costing methods can vary from business to business depending on the unique needs of the company. In general, there are four main inventory costing methods, each with their own advantages and disadvantages. They are specific identification, first-in, first-out (FIFO), last-in, first-out (LIFO), and weighted-average cost.  In this post, we’re going to be focusing on the two most commonly used and accepted inventory costing methods, FIFO and Average Cost.

FIFO and Average Cost inventory valuation methods offer businesses flexibility in their financial reporting, however, there are a few things to consider when choosing the method to adopt. One thing to consider is cash flow implications. Businesses need to evaluate what their cash flow will look like in the coming years and also consider the actual flow of inventory before choosing a costing method. This is especially important if the inventory does flow in a specific manner (such as FIFO method for non-durable goods like dairy products or fruits and vegetables). More on this below.

FIFO Costing

As the name suggests, the FIFO costing method is set up so that the oldest items in your inventory are sold first and corresponds to the actual physical flow of goods in your warehouse. This is particularly useful for companies who want to avoid large losses due to spoilage – for example, distributors selling dairy products, fresh fruits and vegetables, should use the FIFO method so that items are sold according to the earliest expiration date.

FIFO methods of accounting are also preferred by many wholesale distribution businesses because it provides a more accurate picture of the cost of an item based on its timeline, meaning the price paid at the time of purchase. This can be an advantageous costing method for wholesale distributors as it takes into consideration any cost differences in periodic inventory purchases which will maximize the net income.

Let’s say, for example, wholesale distributor, “ABC” bought 100 shirts over two different time periods.

ABC bought 100 t-shirts for $20 each on August 1.

ABC bought 100 of the same t-shirts for $30 each on August 20.

They sold 50 t-shirts on August 25th.

With the FIFO method, those 50 shirts sold by ABC, would come from the first batch of t-shirts that are valued at $20 each. The remaining 50 t-shirts from that same batch (also valued at $20 each) and 100 t-shirts at $30 each get recorded on the balance sheet as remaining inventory. The FIFO method accounts for the price differences in batch 1 and batch 2.

However, there are drawbacks to the FIFO method. There is a heavier tax burden if the method is used in periods of inflation as older items in inventory do not account for any market increases.

Weighted-Average Costing Method 

Under the average cost method, businesses are able to set a standard cost for items in inventory, regardless of what the amount paid when the actual item is purchased. The clear benefit of the weighted-average method is that it is very simple to manage as it does not track when the item was sold like FIFO. Instead, it only considers the amount of inventory in total dollar value and the quantity in stock for each inventory item. This method is good for wholesale distribution companies that want to standardize pricing across inventory batches.

Let’s take a look at the t-shirt example again…

ABC bought 100 t-shirts for $20 each on August 1.

ABC bought 100 of the same t-shirt for $30 each on August 20.

They sold 50 t-shirts on August 25th.

The average costing method looks at the value of the inventory in total – each t-shirt would be calculated as a total of the overall value.

So, the $5,000 paid by ABC for all the t-shirt inventory (100 x 20) + (100 x 30) = $5,000 would then be divided by the total number of t-shirts in stock to calculate the average cost of the t-shirt. In this case, the average cost would be $25 per shirt.

So when they sell 50 t-shirts they would price it based on the average price of $25. The remaining t-shirts would all also be valued at the average price of $25.

While this is a fairly simple calculation to maintain, one of the disadvantages of this method is that the average cost does not match or account for any inventory flow. If inventory prices vary widely depending on how much was paid per each round of purchases, the average cost may not recover the costs of the more expensive items that were purchased. The ideal situation, in this case, would be for company ABC to make up the loss when the t-shirts from the less expensive batch get sold.

Don’t Forget Landed Costs

When recording the cost of inventory, it is important to also include any indirect costs or “non-vendor costs” associated with the purchase of that product to gain an accurate cost of goods. These indirect costs account for the movement of inventory and include fees such as:

Brokerage
Freight
Custom and duties
Insurance
Storage
Shipping charges
Packaging

Automate FIFO, Average Cost, Landed Costs with Blue Link Distribution Accounting Software 

Blue Link distribution accounting software uses Average Cost and FIFO costing methods to accurately manage product costs. No matter which costing method and strategy you choose, Blue Link tracks all costing data behind the scenes so you can change your preferred method if your business processes change in the future. You can also add landed costs to supplier costs which includes the freight, storage, shipping etc.,fees that you pay per item, to get an accurate price per item.

 

By |
Read More

4 Challenges for Wholesale Distributors in 2018

Regardless of the products you sell, wholesale distributors face many of the same challenges every day. Finding a formula to maximize profits, minimize costs and find talented staff is an ongoing effort. For small businesses trying to grow and compete against larger organizations with more resources, it can seem like an uphill battle. However, small organizations can use their size to their advantage, as less bureaucracy makes it easier to adapt quickly to industry changes. And the industry changes a lot. Different consumer demands and increasing competition has transformed the way wholesale distributors do business – from omnichannel sales through eCommerce, EDI, tradeshows and more to trying to compete on shipping times, customers service and price – it is important to have an ear to the ground in the industry to succeed. The tools you use for managing inventory, accounting and other business processes also plays a significant role in helping to address challenges and the right system will help your business grow into the future.

Below we look at 4 challenges currently facing wholesale distributors in 2018.

(1) Efficient shipping is a must.  

Thanks to companies such as Amazon, same day and 2-3 day shipping is becoming the expectation for most customers. Efficient shipping starts with an organized warehouse which optimizes the picking, packing and shipping process so that customers receive the right product as quickly as possible. If you sell online, consider keeping separate inventory for wholesale and eCommerce orders through a virtual warehouse to better manage inventory levels. Keep high-volume items closest to packing stations for easy access and implement bin and shelf locations to help employees quickly locate product. Using mobile picking tools, and barcode scanning allows employees to access picking slips electronically via handheld devices and provides employees with an efficient pick route according to bin and shelf location. Mobile barcode scanning also enables employees to scan items during the pick process which helps to identify any picking errors at the source. As your business evolves and you add more product lines and sales channels, it is important to continuously evaluate your warehouse design and inventory management strategies. Generating orders is only half the picture – your business needs to be able to efficiently ship product to keep customers happy and grow the business.

(2) Automation is becoming standard.

Automation is no longer a differentiating factor when comparing inventory and accounting (ERP) software vendors. Instead, the ability to automate processes across all business departments is a must have in order to compete in the ERP space. In fact, the decision to move from introductory software such as QuickBooks is frequently made in order to automate processes that are currently being performed manually. Automation allows a business to share information and perform specific tasks WITHOUT human intervention. Instead, users set up criteria within the software that dictate what happens within the system and when. A common example is automating the flow of data from an eCommerce sale. With proper integration and automation, once an order is placed online, your ERP system will automatically pull the order information into your ERP (including product, customer and shipping details) and then automatically send the order to the warehouse for picking, packing and shipping – without the need for any employee to do anything in the system (assuming the criteria you initially set-up has been met).

All members of the supply chain want faster and more reliable services through automation – whether that be your customers, vendors or partners. To start automating processes within your organization, look for existing opportunities by evaluating processes. For example, instead of manually rekeying eCommerce orders into your ERP, integrate the two platforms and automate the flow of information. Instead of manually looking up and contacting customers who have overdue accounts, automate the process of A/R collections by setting your ERP to automatically email customers on a regular basis whose accounts are overdue by x number of days or dollar amounts.  The opportunities for automation are endless and the right software vendor will be able to work with you and your team to make recommendations on where automation can save you time and money.

(3) Supply chain partners need access to electronic data.

Partners throughout the entire supply chain want access to more information in real-time – whether this is sales reps, customers, vendors, 3PLs, eCommerce partners etc. Without the ability to easily accept, share and interpret data, bottlenecks arise in the supply chain, slowing down the time from order to shipment. The ability to communicate directly with partners through the integration of business management systems, eCommerce, EDI, mobile applications, etc. helps to standardize information between partners – reducing manual processes. This also makes it easier to add more partners to the supply chain around the world. Partners need access to important information such as custom documents, sales orders, reports, inventory and shipment notifications to operate efficiently.

(4) Scalability is key.

The ability to scale processes and corresponding systems is important to grow your business. As you add more product lines, you need to scale inventory and warehouse space, as you expand your customer base you need to scale sales channels, as order volume increases you need to scale the systems you use to manage orders. It should seem obvious, but as your business grows, your software needs to grow too. This means finding a solution that allows you to add more features as needed and does not restrict your business by setting a limit on file size and number of users.

By |
Read More

Is Your Wholesale Distribution ERP Software Adaptable to Changing Times?

Guest Post by Laura Hudgens

Wholesale distribution ERP software, also known as Enterprise Resource Planning Software, helps distribution businesses buying and selling product to better manage business processes—such as automated reporting, inventory management and even picking, packing and shipping through robust and advanced functionality. With typical features like a common transactional database and the ability to manage inventory and data in real-time, implementing wholesale distribution ERP software is a vital part of any business. However, look at the implementation as a marathon, not a sprint. Implementation can be a long process, so it is important to ensure the system you choose has future-proof features and capabilities to withstand company growth. Of course, all wholesale distribution ERP software is not created equal, and when deciding on a system that is right for your company, there are a few key points to keep in mind:

Integration Options

When incorporating wholesale distribution ERP software into a distribution business, chances are, you already have a few systems in place. The idea with true wholesale distribution ERP software is that it is an all-in-one solution designed to replace all your existing software. Having said that, sophisticated software is not a closed system, meaning it is flexible enough to integrate with other pieces of software or apps as the marketplace and your business changes. For example, a distribution business looking to expand its market online can integrate its wholesale distribution ERP software with an existing eCommerce platform and online marketplaces such as Amazon an eBay. 

While the cost of ERP may be higher than the introductory platforms that your company currently has, ultimately, the freedom and ease that comes with an open system will be worth it, especially as more and more companies are choosing to expand into the eCommerce market.  The competitive advantage that successful eCommerce distribution businesses have is that they have superior insight into their inventory and order fulfillment processes. An all-in-one wholesale distribution ERP software can help you better manage online orders, keep credit card information secure, improve customer service by saving on shipping costs and increase accessibility to your products, 24 hours a day, 365 days a year.

Another important integration is Electronic Data Interchange (EDI). When you integrate EDI with your wholesale distribution ERP software, the sharing of data between systems helps eliminate the need for manual entry of sensitive information like product, shipping, and customer data—which saves all parties involved time, money, and hassle.

Opportunities for Automation 

The ability to automate operational processes is the most valuable advantage of incorporating wholesale distribution ERP software into any organization. The reduction of manual processes provides many continuing benefits, so automation is key when making decisions on software.  Introductory and basic wholesale software tools that don’t provide opportunities for automation may cost less up front, but the time and resources saved through the automation of processes will quickly outweigh the costs of a new system.  Again, always think about the implementation in the long-term.

Wholesale distribution ERP software with one database that acts as a central hub to store all company data including eCommerce data, reduces the need for manual data entry, which in turn can improve productivity, boost efficiency, reduce processing times, and even decrease overall operating costs. Automation also helps improve accuracy and reduce user error.

Having well-managed data allows for more robust reporting functionality, as reports within the system get exported, edited, and shared in real-time. Wholesale distribution ERP software with specific reporting tools allow users to create rules in the system to automate data flow and the distribution of important information (for example, creating a workflow that automatically emails invoices to customers). With options to send reports and emails internally and externally, sharing real-time, accurate data is timely and simple. For example, you can set the system to send out a weekly sales report on the day that you choose and to the people/team you want to send to.

Improved reporting and analytics through the system offer clearer insight into how your organization is doing as well as providing better customer service. Workflows are also made easier through automation as tasks can be strategically set-up and managed.

Better reporting and analytics also help reduce supply chain friction by helping you keep more accurate tabs on inventory and developing a better a supply chain management plan. An integrated wholesale distribution ERP software also allows you to better monitor and measure your progress in real-time, and since everything is all-in-one, it’s easier to stay organized and know that you’re not overlooking any pieces of the puzzle.

Service-Oriented Business Models

Customer needs are always changing. Modern advancements in technology mean that consumers are now accustomed to having everything they need from a company, at their fingertips, any time they need it. Because of this, customer service is more important than ever, and it’s imperative that your business can keep up.

One way to ensure your customers are always getting the assistance they need is to offer self-service features, such as online order portals that clients or customers can access 24/7 to find information about products, pricing, or order status—all without ever speaking to an employee. Or, for those times when a self-service portal isn’t enough, accurate, efficient, service-oriented help is a must. Fortunately, with all of your information integrated and at your fingertips through wholesale software, it’s easier than ever to better serve your customers with accurate, up-to-date, and easily accessible information.

And while you are taking care of your customers, you need your wholesale software to be taking care of you. Every business has different needs, and what works well for one organization might be detrimental to the next. Ensuring your system is a good fit is a vital step in ensuring you are getting the most out of your system. Ongoing consulting services from the software vendor during the sales process and even after the software is purchased and implemented can help you review and re-evaluate the state of your business, your unique needs, and opportunities for growth. This information empowers you to make knowledge-based decisions about the best software selection for your business.

Of course, once you’ve picked out your software, it’s important you know how to use it. Look for a provider that offers training in-person, so you can feel confident that the implementation of your new system is going to produce the desired results. And be sure to plan out your implementation process in a documented and openly accessible place, like a company-wide project management tool. 

Just like you are there for your customers after they’ve made a purchase from you, it’s important to find a software provider that’s there for you even after the sale is closed, too. Self-service support options and free resources about the implementation and optimization add to the training you receive and enable you to reap the most long-term benefits from your new system.

Perhaps most importantly, when exploring wholesale software options, you want to look for one that offers customization of services. Your business and needs will change over time, and your software should too. Look for a vendor that is continuously improving their system and providing yearly updates that keep the functionality relevant and competitive as marketplaces change. They should also be open and willing to make the necessary modifications and customizing that address the unique aspects of your organization.

Laura Hudgens is a writer for TechnologyAdvice.com. She is a communications instructor and freelance writer who studies and writes about technology, media, science, and health.

By |Tags: |
Read More

Managing Pricing Rules in Blue Link’s Accounting Inventory Software

Setting prices, maintaining margins, keeping customers happy, managing discounts and promotions – a company’s pricing strategy is a complicated yet imperative part of business management. Using accounting inventory software such as Blue Link will provide tools for managing different pricing rules and strategies, to help automate the process of maintaining and updating price. However, the terminology used to describe different pricing rules can vary from one company to the next which can be confusing when trying to find the right solution to manage your specific needs and understand the options for doing so. Here we look to explore some of the pricing strategies used by wholesale distribution businesses, and the functionality available in accounting inventory software to manage them.

List Price

A product’s list price is a price assigned to a product as a means to standardize pricing across an industry. The term “list price” is also referred to as the Manufacturer’s Suggested Retail Price (MRSP), the Recommended Retail Price (RRP) or the Suggested Retail Price (SRP). For the most part, this number is used by distributors and wholesalers for informational purposes only – for example, to print on labels – and not for actual customer pricing. A product’s list price can also be used as part of the calculation to determine actual customer pricing. For example, distributors might want to set the regular price at 10% lower than the list price.

Regular Price

A product’s regular price is generally the price charged to the customer, where the customer is not entitled to any other pricing (i.e. volume discounts, price matrix or contract pricing).  With Blue Link, the regular price for a product can be set in each currency accepted by the company and for each UOM. The regular price set by a company is completely discretionary and does not have to take into account the MRSP.

Contract Pricing

Contract pricing is used to allow for pricing other than the regular price. Contracts can be set up for one specific customer, or multiple customers and a contract price might apply to one product or multiple products. Contract pricing can have a start date and an expiry date – which once again can be applied to all customers and all products or some customers and some products.

There are many different reasons why a distribution business might have contract pricing in addition to regular pricing. For example, contract pricing might be a result of initial negotiations of doing business with a customer for a set period of time or a company may provide contract pricing to customers of good standing or high sales volumes to retain their business into the future.

Special Pricing

Special pricing is usually set-up through a specific price contract. Special pricing can apply to specific product promotions, time-sensitive discounts, holiday or seasonal pricing and volume discounts. A price contract with special pricing will often have a start date and expiry dated based on certain criteria. As of the expiry date, the pricing reverts back to regular or contract pricing for that customer and/or product.

Quantity Breaks

Quantity breaks are a certain type of special pricing where the customer receives a discount based on purchasing a certain amount of product. In Blue Link, quantity breaks can be set up for each currency and unit of measure and apply against the regular price of the item. Specific quantity break pricing contracts can also be set up to apply against customers with contract pricing as opposed to regular pricing.

Price Matrix

To set up a price matrix, you need to first group products into different categories and then set up different discount levels for each category. The next step is to assign customers a discount level. Then, where the discount level and product number meet within the matrix, is where the price is determined. Let’s look at an example.

You’re a distributor of food and foodservice products and your customers include restaurants, other distributors and bakeries. You set up the following product categories:

Matrix Category 1: dry goods, sauces, oils and condiments
Matrix Category 2: paper and disposable products such as napkins, straws and take-out containers
Matrix Category 3: apparel products such as chef hats, aprons and uniforms

You then go ahead and set up different discount levels for each product category:

Product Category
Discount Level 1
Discount Level 2

1
10% discount
15% discount

2
0% discount
5% discount

3
2.5% discount
5% discount

 

The next step is to assign customers to a discount level. In this example you decide to assign all your bakery customers to Discount Level 1 because they tend to buy a lot of product from Matrix Category 1, but not from Matrix Category 2 or 3. You then decide to assign all your restaurant customers to Discount Level 2 because they also buy a lot of products from Matrix Category 1 and also from Matrix Category 2 and 3. However, you have one bakery customer that is much larger than the rest and so you choose to also assign them to Discount Level 2 instead of Discount Level 1.

Minimum Price

A minimum price dictates the lowest possible price allowed for a product to maintain a specific margin. This can be used as a means to restrict salespeople from selling items at too low a price. Within Blue Link, the ability for sales reps or other employees at an organization to override a price is based on permissions – with the appropriate permissions, anyone can change pricing.

Fluctuating Pricing

In certain industries, pricing may change on a regular basis according to the market. In this situation, look for accounting inventory software that allows you to easily import and update pricing information across the product in question. Blue Link’s accounting inventory software allows a company to import price lists based on information from the vendor and have those lists automatically update pricing in the system. Product pricing can also be updated on a one by one basis or a global price change can be made where prices for all products or a range of products based on product code or product class can be changed (up or down) by a specific dollar amount or percentage. Global price changes can be applied to regular pricing, specific contracts or all contracts and against all UOMs, specific UOM’s, all currencies or specific currencies.

As you can see, there are a lot of different pricing rules available to a company. Depending on the type of customers and products you deal with, different types of pricing will be more appropriate. With robust accounting inventory software, you will be able to manage multiple pricing rules based on the customer and product and then set up a hierarchy of rules that can override one another depending on the situation. For example, you may want to set up a seasonal special pricing contract for a certain product that overrides the regular price, however, the system will not apply this seasonal pricing to customers where their contract price is already lower than the seasonal discount.

By |Tags: |
Read More

Takes One to Know One – SMBs Should Look for SMB Business Management Software Vendors

Has your wholesale distribution business ever had to deal with a large company’s sub-par customer service? Did you have to wait for hours on end on the phone for support only to be bounced from one rep to another? Did you have to repeat information? Were they able to understand your issue and resolve it in a timely manner? Whether it’s your supplier, third-party logistics partner or your software vendor, poor customer service can certainly test the patience of the most understanding of individuals not to mention cost a business unnecessary time and money.

When searching for new business management software for your small-medium wholesale distribution business, you will certainly learn about how the functionality of software itself improves the customer experience (CX) for your own customers with fewer manual entry errors such as shipping information errors, but it is also just as important to learn about the type of customer service the vendor will provide YOUR business. Have they worked with a business similar in size and structure to yours? How accessible is their tech support? What type of expertise do their team members have? These types of questions are important to have answered during the initial sales conversations to avoid headaches down the line.

If you’re a SMB wholesale distributor, consider working with a  business management software vendor that is also a SMB as they are most likely to have a very similar company culture which makes for a better relationship. Consider the following when evaluating options.

Understanding Company Growth 

If you’re a small to medium size business that is growing and looking to implement new business management software to manage an increase in inventory, sales and customers, it is important that you find a software vendor that is also growing.  This means that the software itself is continuously in development and not stagnant, and that the vendor is always working to improve the system and update the software in response to changes in the marketplace or industry-specific compliance/regulatory changes. Be sure to ask the vendor directly about recent releases or updates to the system in the past year and future plans for improving the software.

Any growing small-medium size business management software vendor will have experienced the related pains and hurdles that come with adding employees, products and customers so will have a good understanding of what your business is going through with growth. Be sure to ask for references of companies similar to yours as you go through the sales process to see how they have managed projected growth for other companies your size (1-150 employees). A business management software vendor similar in size to your business will also be able to understand your budget much better than larger software companies who mainly deal with larger businesses where budget is not an issue. They understand that purchasing and implementing new business management software is a huge undertaking and will have insight into how to get the most out of the software to see a worthy ROI.

Similar Company Processes 

While the products you sell may be different, the organizational structure and processes of a business management software vendor your size will be fairly similar to your own. As a result, the vendor will be able to provide valuable insight into any changes you need to make to your internal processes to take full advantage of the various features of the software. SMB tend to have fewer resources available per department and therefore know how important it is that a system is able to automate processes as much as possible to avoid tying up those valuable resources on numerous manual tasks.

This understanding is especially important when it comes to the implementation of business management software. As a SMB ourselves, here at Blue Link we recognize how important it is that the individuals working on the implementation of our business management software fully understand our customer’s unique business needs to make the implementation process as efficient as possible. We are aware that our customers have limited resources available to dedicate to the implementation and we work with them to make joint decisions about the best way to manage each step of the implementation process. The Blue Link consultant assigned to your implementation will focus on only your business during the implementation and will not be distracted by juggling multiple installs at the same time. We will work with you to go over your current processes such as inventory management, accounting, order entry and processing, invoicing, purchase orders etc. to identify any unique business requirements and feature requirements you may need as well as provide suggestions on process changes to get the most out of the system. Our team will also review your existing data to jointly determine which information needs to be migrated over to the new system and which format is best for the migration – saving you from tying up your valuable resources for hours on end with manual data migration work.

Accessible Tech Support

An in-house, personalized tech support team means that you will be speaking with the same representatives each time. The benefit of this is that they will get to know you and your business on a personal level. You can feel comforted knowing that someone with the right expertise and knowledge of your specific business requirements is there to help.  Our Blue Link tech support staff know our customers on a first name basis and develop a clear understanding and history of the types of hurdles, issues and expectations you have so you spend less time repeating information.

“When we did our due diligence in searching for a new accounting system, we narrowed our search down to three different providers. Each offered, for the most part, the same type of software and features that my company needed. What set Blue Link apart from the other two was the level of engagement we received from our initial phone call. We immediately felt at home and had not just the right software, but the right partner to grow our business. That partnership remains even stronger today.”
– Michael Ricks, President, Furniture Classics Limited

 

1- on 1 Employee Training

When speaking with  business management software vendors, pay attention to the different personalities. Are they someone you and your employees will be able to work well with? This is especially important when it comes to training employees on how to use the new software. The success of any software implementation is employee adoption and you want to make sure that you work with a qualified individual who can adjust their teaching speed and methodology to your employees’ needs. Blue Link provides comprehensive on-site, face-to-face training to ensure that employees are comfortable using the system and address any questions or concerns they have on the spot.
Download the below resource to learn more about how to evaluate software vendors and take a look at our Software Services page to see what you can expect when you sign up with Blue Link!

 

By |
Read More
Menu