The Dangers of a Developing a Custom ERP System In-House

March 27, 2015

problems-with-homegrown-softwareIn theory, developing a custom ERP solution in-house to manage your wholesale and distribution business may sound like the perfect solution. However in practise it rarely is.  Even though the system would be designed with your specific business processes in mind, the benefits gained from a completely customized solution are often outweighed by the resources necessary to maintain such a “perfect fit” system.  It’s preferable to work with an industry specific software company, who can meet most of your software needs out of the box, and provides the option to customize as well. Working with an ERP software vendor who becomes a trusted business partner ensures you get the best of all worlds – a solution that is designed for your specific business type, maintained by a team that provides expertise is the areas of software development and management, and provides guidance and insight into industry process improvements. It’s often the smaller vendors who look to build these types of relationships, as it benefits them in the long run as well – working closely with customers means they get first-hand insight into industry specific requirements, and that enables them to continuously enhance the software to better meet the needs of their target market.  Below we take a closer look at the dangers associated with developing a custom in-house system:

First and foremost, as a wholesale distribution company, your core competency is not in creating ERP solutions, nor should it be.  One of the problems with developing a system in-house is that it eats up a lot of resources and requires a large investment into the technology and skills needed to keep the ERP application up and running.  Even if this task is assigned to an IT department, it still takes time and other resources away from the activities that contribute to the businesses core competency.

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From Receipt to Invoice: The Importance of Inventory Management Software

March 18, 2015

inventory-management-process

The way in which a wholesale/distribution business manages its inventory has a direct and critical impact on its overall success and long term viability. Although this may seem rather obvious, the number of businesses who remain tied to outdated means for inventory management suggest that it’s a more foreign notion than one would imagine. Successful business owners understand that inventory represents their livelihood and its importance should never be underestimated or undervalued. Traditional methods for managing inventory, such as pen/paper or spreadsheets, can still be viable options for smaller start-up businesses, or businesses who hold very small amounts of inventory. However, as those businesses begin to grow and expand their offerings, the redundancies and manual processes involved can become too cumbersome to manage efficiently.

For many growing businesses, the next logical step is implementing an ERP system that encompasses the appropriate inventory management tools to support that growth. By implementing an inventory management system into your business you are adding a new dimension: the ability to track inventory throughout the entire distribution chain, from receipt to invoice.

Receiving Inventory – Inventory management software allows users to scan products at the receiving dock using verification scanners to immediately identify and record the product on arrival. This will record what items were received followed by what bin and shelf number the product was allocated to. Once a product is scanned at the warehouse, the quantity received gets recorded in the back end accounting system for comparison against a given purchase order, thus ensuring accuracy and identifying any discrepancies immediately.

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Factors to Consider When Upgrading Software: Employee Skill Set

March 10, 2015

upgrading your softwareIntroductory software systems, such as QuickBooks, are great tools for small and start-up businesses.    They require minimal training and set-up, are intuitive and easy to use and come with a relatively low price tag.  However, as your business grows and order volume increases, there may come a time where more robust accounting ERP software is required.  ERP systems provide functionality across a variety of departments and are designed to handle large amounts of data, increase automation and reduce the need for duplicate entry. As a result, the implementation process is much more complex and requires significant planning, the benefit being a system that will continue to grow with your company for years to come.  ERP software is a good solution for businesses who have outgrown their existing systems, but what happens when a company outgrows its staff?

Implementing an appropriate mid-market accounting ERP solution can reduce or delay the need to hire additional employees by providing opportunities for automation.  There is less need for manual entry as the system integrates data across all departments including inventory, accounting, contact management, and order entry and processing. However, there are two instances where employees with a more advanced skill set may be needed; (1) when IT management is required, (2) when no one at the company has advanced knowledge of accounting practices.

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