No matter what type of business you operate, you have surely heard about businesses trying to reduce the amount of paper they are using. It all seems so easy in theory, but it can be challenging to actually change the processes you and your colleagues have been used to for so many years. According to www.electronicpayments.org, “…every year Americans mail 26 billion bills and statements and 9 billion payments in paper form. The production and transportation of those paper bills, statements, and payments consumes the following resources: 755 million pounds of paper, 9 million trees, and 512 million gallons of gasoline.” Visit their Web site for more interesting facts about going paperless. Here are some of the ways you can use your accounting software to help put your business on the road to eliminating the need for paper.
Send invoices and statements via e-mail.
All of the paper and envelopes that go into sending your customers invoices and statements really add up. Many accounting systems now allow you to set up your customers’ e-mail addresses within the system, and then send all invoices and/or statements to those with e-mail with just a few clicks. If you send out five invoices/statements per day, that’s 1,300 sheets of paper and 1,300 envelopes per year! Just think of the time saved, not having to print, collate, stuff, stamp and send all of that mail. Your customer gets the invoices sooner, and you might just get paid faster, too.
Store customer pricing in the system.
Do you find yourself flipping through disorganized folders of information, seeking the customer’s most current pricing sheets? Not only does this waste paper, but it also leaves the customer waiting while you search. Keep track of pricing in your accounting software and it will always be just a few clicks away. Do keep in mind that accounting software does vary in its capability to store pricing information. Some systems let you store one set of pricing, some store multiple sets and some even allow for unlimited contract pricing. Make sure your system allows you to store pricing in a way that will work for your business!
Enter and store customer orders in the system.
Here again, if you are storing customer quotes and orders in a paper file, things will be much harder to find. You will have a multitude of papers floating around, and it will take longer to access them. Instead, create and save customer quotes and orders in your accounting software system. Quotes and orders can then be searched for by number, customer name, etc. for easy access. The information will be easier to find, and you will consistently provide better service to your customers.
The second part of this blog will be continued in the next blog post.
There is an old rule that is still as relevant today as it has always been, and that is the 80/20 rule. This rule, when applied to your product inventory, says that 80% of you sales are from 20% of your inventory items. Know which items of the 20% are garnering the most sales can be crucial to growing your profits. That’s where ABC analysis can come in handy. ABC analysis within an inventory management software system is a practical report that can show you which items are most profitable. Here is how it’s typically broken down.
In an ABC analysis, inventory items are analyzed and ranked, based on a percentage of sales. Often, the software will give you the option of ranking your items based on either the “cost of goods sold” (COGS) during a chosen time frame (annual is the most popular), or else by the number of ‘hits’, which is the number of times the items have been sold.
When the analysis is done, items are typically ranked in descending order, using the following scale: A=80%, B=Next 15%, C=Next 4%, D=Next 1%, and X representing no sales. Many systems will even let you sort out specific product lines or items on which to perform the ABC analysis.
ABC Analysis can be extremely helpful for planning purposes, since it gives managers a clear picture of top performing items and can help solidify marketing plans, sales forecasts, purchasing plans, and more. By focusing on the 20% of the items that are responsible for 80% of your profits, you can create a smart plan to increase your profits down the line.
An accounting program allows you to electronically enter, process and save orders. Typically, an order entry system is a component that works along with an accounting and/or inventory management software system. Using order entry can save a business significant time and streamline processes, when compared to using accounts receivable without order entry. Is order entry right for you? Consider the benefits of order entry, and you will get a much clearer picture of whether order entry is right for your business.
- Know what’s available and increase order accuracy. Instead of writing orders on paper, with order entry you are entering orders right within the software system, where you are able to view item availability as the order is being entered. So instead of saying, “Just a minute, I’ll run back and see how many are available,” you’ll be saying, “There are twelve available to ship, and I can put the rest on backorder for you.” Not only does this make your customer happy, but also saves you time and extra work.
- Create packing slips and pick tickets. Most order entry systems provide the option of printing packing slips and pick tickets when you are processing orders. The pick ticket is used for the shipping team to know what goes in the shipment, and which shelf to pull it from. The packing slip shows exactly what’s included in the shipment for the customer. Both items keep you organized, and present a professional image of you to your customers.
- Create partial shipments, and put items on backorder. This is one feature of order entry that probably makes the biggest impact. If you are using accounts receivable, you can only enter invoices; there is no option to keep track of which items have been shipped or which ones are on backorder. Order entry keeps track of all of that information, and also allows you to ship partial orders, which maintains a high level of customer service. Retaining items on backorder also helps you remember to ship items once they arrive into stock.
- Turn quotes into orders. The ability to create and save quotes is critical for winning more orders. Order entry allows you to create and save quotes, and then change those quotes into orders when it’s time, or even make edits to the quote and then change it into an order. This saves you significant time and also gives your customers what they need in an efficient way.
Adding order entry to your software can greatly speed up your workflow, increase accuracy and most importantly, keep your customers happy.
As a business owner, it's easy to make accounting software and/or payroll software a low priority. After all, you are busy making sure sales are up, costs are down, profits are high, and everyone is staying productive. Unfortunately, it's so easy to fall behind if you don't stay abreast of technology, and when that happens you can quickly lose the benefits that the software was supposed to provide in the first place. Here are ten reasons why keeping your accounting and payroll software technology current is crucial to the successful operation of your business.
-
Hardware Compatibility:
The old dot matrix printer still works fine, humming away in the corner, printing your invoices dot by dot. Hey, you can't hear each other speak over the noise, but you've become accustomed to it. So, why move? This is an all-too-common scenario, whether it's a printer, computer, or a long list of other hardware devices. For a business, hardware is an important component which allows you to print invoices, save valuable files, communicate with customers, and much more. The older your software system gets, the less likely you will be able to keep on performing those functions in a timely manner, and eventually you won't be able to at all. The software you are using plays a huge role in the hardware you are able to operate. Compatibility with new hardware is why it's important to keep your software up to date.
-
Safety and Security:
The good news is that we are now able to communicate much more quickly within a business, and also with outside contacts such as vendors and customers. E-mail, instant messaging, and a host of other modern technologies make communication much faster! But the downside is that there are also many more security threats. Keeping your software technology current helps keep your data safe from hackers!
-
Time Savings:
If you've been doing things the same way for many years, it's easy to believe that your way is the fastest way available. After all, learning a new system does take time. But in the long run, things like running reports, processing invoices and keeping track of data are generally done more quickly with newer technology.
-
Company Image:
How do your customers feel when they receive and view your invoice? Is it printed on nice paper with your logo and a custom message? Or is it printed on thin paper with tear marks on the sides, barely legible because of printing issues? Do not discount the fact that what your customers receive from you impacts their image of you. Having newer technology allows you to print documents and perform other functions that look much more professional than they did years ago.
-
Customer Satisfaction:
What happens when your customer asks to view all of their sales from you for the past three years? Are you able to help them, or is your historical data limited? This is one example where your technology affects your customer satisfaction. By moving to newer technology, you can improve your customer service and meet the needs of your customer more quickly and easily.
-
The Green Factor:
Older programs often require the printing of documents such as reports, financial statements, invoices, orders and other documents. Newer technology offers the ability to keep track of and send such communications electronically, saving many trees per year!
-
Crucial Updates:
If the software technology you are using is extremely old, chances are your program is no longer being updated or enhanced by the company who developed it. You may think your program doesn't require any more updates because it's been around for so many years. The truth is that updates and enhancements help keep your software compatible with everything else on your computer. By not receiving updates, you will experience more and more problems as other technology moves forward. Moving to newer technology can assure you get the updates to keep your company safe and secure.
-
Support and Help:
Many older programs are no longer supported, meaning there is no help available in case of questions or problems you may have with the software. While you may know the software well, there are always questions that arise with the advancement of other technology you are using. Maybe you installed a new printer or need help getting a time clock working with your software. Or perhaps a new employee started who is unfamiliar with the program and has questions. In cases like these, having support available is crucial to the function of your business.
-
Compliance:
These days even the government is starting to require companies to have a certain level of technology. Certain government forms must now be submitted online, and no doubt that trend will continue. Older programs often cannot handle the newer tools necessary to stay compliant, and moving to new technology will be needed to meet those requirements.
-
The Band-Aid Factor:
If you have ever had an extremely old car, you are all too familiar with the process of fixing one thing after another until you are worn down, and your pocketbook is empty. Trying to get anything old to keep working can become tiresome and can also become extremely expensive. Because you are keeping so busy trying to make the system work, you may not even be aware of how much time and money you are spending to hold everything together. Moving to newer software technology can seem challenging at first, but it is typically the best option for your business in the long-term.