The Cost of Poor Inventory Management – Product Returns

cost of poor inventory management

As a wholesaler and distributor, the inventory you sell flows through a vast network of businesses before getting to your warehouse and ultimately your customer.  The movement of inventory is a constant activity that requires input from multiple sources throughout the supply chain.  Once you receive inventory into your warehouse, the movement continues as you … Read more

Your Old Inventory Software Could Be Costing You Money

Old Software Costs Money

When it comes to replacing old/legacy inventory software, many businesses abandon the search due to the fear and anxiety associated with making such a big business change and capital investment. While the adage “if it isn’t broken, don’t fix it” may seem to apply in this situation, in reality, there are likely hidden costs associated … Read more

7 Ways to Save Costs When Replacing QuickBooks

Save Costs Buying ERP

[fusion_text]The acquisition of new software is a huge undertaking, especially when you replace QuickBooks or other introductory software for a Tier 2 or ERP solution. However, as a business grows there will come a time when this transition is necessary as existing systems struggle to keep up and new business complexities arise.  ERP software is … Read more

Hosted and On-Premises Software: Total Cost of Ownership

Hosted and On-Premises Total Costs of Ownership

When your business decides to purchase inventory and accounting ERP software, the great debate remains: should you implement a hosted solution or on-premises?  For smaller organizations, the answer is obvious – when you compare the total cost of ownership per year, hosted software will almost always end up being the most economical choice (as shown in … Read more

6 Costly Software Selection Mistakes

Software Selection Mistakes

For many wholesale and distribution companies, replacing internal inventory and accounting ERP software is like going to the dentist; necessary, but potentially painful. Even for those businesses who consider the software purchase as a strategic investment, it can still cause stress and anxiety among employees.  Often, you can stave off the need for replacement with preventive action such as upgrades. This is why it is important to invest in software maintenance, and to find a software vendor that will also upgrade any customization work you have done – without charging more.  However, if the system you’re using will no longer be supported, or if there has been a change in the business that renders it inadequate, you have no choice but to go to market. And when you do, it’s easy to make big mistakes. Here are the biggest ones.

  1. Requirements not defined properly (which can lead to nasty surprises).

This mistake is often the result of a rushed sales and implementation process, and poor communication with the software vendor.  It is as much your responsibility as a company to define your requirements as it is that of the vendor you work with to spend the time learning about your business, and asking the right questions.  Be wary of vendors who try to rush your company to the demo and proposal stage and especially of those who offer price incentives based on specific timeframes.  To avoid this mistake, find a vendor who spends the time getting to know you and your business in order to make sure that their software is the best fit for your needs.  Lastly, never assume that certain features will be available; always check with the vendor to make sure you’re not missing functionality critical to business operations.  Once again, this should not be an issue with a vendor that does a detailed job during the sales process.

  1. Lack of buy-in.

If the people who are going to use the system are not motivated to make it a success, you’re headed for trouble.  This includes those employees in management positions with decision making power and those who will be using the system at various levels within the company.  Resistance from employees is a natural reaction, however there are certain steps you can take as a manager to ease the transition to new software.

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“I can’t afford wholesale inventory software, it costs too much”

wholesale-software

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With any major purchasing decision, budget is an important factor. When it comes to purchasing wholesale inventory software, sticker shock is common for those moving off of introductory systems or manual processes.  However, as with any capital expenditure, buying new software should be a decision made on more than just cost – if you want to make the right investment. The same principles apply as if you were such as seeking new warehouse space. So how come cost continues to be used as a deal breaker? Before you narrow down your software options based on cost, consider the following:

Too expensive compared to what?

Expensive is a relative term.  When it comes to software, make sure you think about what you’re comparing the cost to.  Most comparable Tier 2 systems will fall within a similar cost range, so it’s important to first identify which Tier will have functionality to meet your needs. Many companies start off with an arbitrary budget based on what they feel they should spend, and not on any real world frame of reference.  Are you comparing the cost to other systems? To hiring additional employees? To purchasing more equipment?

How much will it cost you to do nothing?

Another cost to consider is the cost of doing nothing.  Businesses who do not take this aspect into consideration are falling prey to omission bias – the tendency to judge harmful actions as worse than equally harmful inactions.  Not purchasing software can affect costs directly by resulting in a new hire or indirectly through lost productivity. When it comes to hiring employees, good software should replace the need for additional staff which will save you more than just the cost of a system in the long run.

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Comparing Purchasing Software vs. Hiring an Employee

Scale weighing two options

We’ve previously discussed the importance of planning ahead in order to achieve your strategic goals. While company growth is exciting, it often means that current processes and strategies need to be updated. For example, how are you currently managing your accounting and inventory? If you are using QuickBooks, you may need to upgrade to a … Read more

Cloud vs. On-Premises Cost Comparison

cloud vs on premises

There are several aspects to consider when choosing to implement a fully integrated inventory and accounting (ERP) system – one of them being whether or not to implement the software via the cloud or as an on-premises solution. The term “cloud” is often used interchangeably with the terms “hosted” and “SaaS”, and refers to the … Read more

ERP Implementation Guide: Cost Considerations

ERP Implementation Guide

You’ve begun evaluating ERP software vendors, and have a couple different proposals in front of you, with pen in hand to sign one along the dotted line.  Each proposal clearly outlines your business processes and requirements, the components you will be receiving, a final quote and payment options and the implementation.  But wait – what … Read more

How Inventory Management Software Leads to Speedier, Cheaper Shipping

Inventory in a busy warehouse

Many companies are paying way too much for shipping and wasting valuable resources in the process as well. A robust inventory management software system can help to resolve this problem by ensuring cheaper, faster shipping in the future. Here are some tips to help improve your company’s shipping process with proper inventory management software: Utilize … Read more