Systems, Systems, Systems

Modern business technology is an amazing thing (though I suspect all generations say that). I’ve recently had conversations with several clients that have reiterated this.

For one, they are a wholesaler where all the knowledge of the products’ quantities and whereabouts in the warehouse is held by the owner and a warehouseman who’s wanting to retire at some stage soon. This is a business risk, what happens if they’re not there? How much time and effort would be wasted by the rest of the team trying find everything, or know when to reorder? They have a basic product list in their accounting system, but it’s really just for pricing invoices.

For a manufacturing client, they make several grades of a product but can’t tell how much each grade costs to make and therefore what lines they’re making money on and what they’re not. There’s a capacity to how much they can make, so wouldn’t they be better to concentrate on making more of what they make good margins on, as opposed to other products?

For another, a recent amalgamation has meant they are being forced to drop many of their electronic systems and move back to systems that use much more manual processing. They are likely to need to employ further staff just to keep up with the quantity of data that is needed to be input.

The more information you can get about what margins you are making on all your sales, the better decisions you can make to drive your business’s profitability.

I’m always telling clients to get a system that does what your business does to the point of sale. Then tack on an accounting system.

 

  • What all businesses need to do is have a record of who their customers are – a contact database.
  • If they sell products, they need a system that records those products, tells them how much of each product they have, how much each one cost, and the gross margins when they’re sold.
  • If they sell services, they need a system that records the time spent on each job.
  • If they manufacture goods, they need a system that records the components of that process and can price out the cost of all the products they manufacture.
  • If they are in trades e.g. building houses, they need a system that can be used to quote a project then record all the costs as they happen so at the end they can see what profit is made on each project.
  • You need to be able to tell what quantity of what was sold, and how much profit you made on it, whether you’re a restaurant or a wholesaler; even if its just to make decisions about what sales lines to concentrate on.
  • If you sell online, you need a great website to take the orders, then use it to pack the product and process the payment.

 

One of the key things is that you should only need to enter data once, or handle a transaction once.

For the wholesaler mentioned above, they need to have an integrated stock system that knows how much of every product is on hand, where it is, when to reorder something, accept that order when the stock arrives, and send the invoice to the creditors system to be paid. They need a website that their customers can easily find the product they want, order and pay for it. Then send a picking list to the warehouse (in a logical order for the product to be found), take the product out of the stock system when it’s sent, and create a sales invoice to send to the accounting system. The database sits in the middle of these and the accounting system is integrated to both.

I met with them and a software provider last week to walk through what they need and how it could work. Turns out they already had some of it, they just don’t use it! So all it needs is some tidying up and some training. (And encouraging staff to use it!)

There are numerous systems out there. We gave up trying to keep up with them all. But we can help you assess what you need a system to be able to do and talk to providers with you.

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