In the practice of bookkeeping or accountancy, you are likely to have clients who are retail or wholesale merchants, looking for solutions to help automate and manage their supply chain. Many times, clients turn to you as a trusted source of advice. One area in particular where many companies struggle to come to a decision is inventory management. Options range from free (spreadsheets) to tens of thousand of dollars annually (ERP systems)- and more expensive does not necessarily mean less complicated.
So how do you help your client navigate this logistical labyrinth? We’ve put together a list of factors to consider so that your client can make an informed decision about what inventory management system is best for their business.
The first thing to realise is that there is no one-size-fits-all solution when it comes to inventory and order management. The requirements of a small eCommerce retailer are vastly different from those of a wholesale merchant selling globally. The needs vary from industry to industry as well - an online fashion retailer will have different back-end operations comparing to a coffee roasting shop.
Before a merchant starts comparing different solutions, a helpful exercise is to map their entire supply chain, from the number of products in their inventory, number and type of stores, how they manage purchasing, where their warehouses are located, right down to the currencies they deal with and languages they run their business in. This mapping exercise will help them create a checklist of features that they will need in an inventory and order management system.
For obvious reasons, the size of your client’s budget will affect what solutions are available to them. However, many businesses mistakenly believe there is a correlation between price and performance and end up wasting money on a behemoth system that they don’t need.
When budgeting for an inventory management system, your client should search what other companies of similar size, with similar operational requirements are spending on their solutions. Refer to comparison sites such as Getapp and Capterra for a comprehensive comparison across price and business type.
For many small and medium-sized businesses, Enterprise Resource Planning (ERP) tools are just far too elaborate and complicated for their supply chain, whatever their budget may be. One way to save costs yet still be prepared for future growth is to buy a solution that has ample options for upgrading and customising. This way when you do need to spend more, your inventory management tool grows with you.
For many businesses, they already have an inventory management system in place and are looking to move to another system. Before choosing a new system, go over what are the challenges of the current process.
For some businesses, a major blocker is that their different supply chain solutions do not speak to each other. Their CRM, eCommerce store, warehouse management tool and accounting software work in silos, which leads to hours of manual reconciliation leaving your client more frustrated than before they even started using these solutions.
Help your clients narrow down their search by considering options that have a vast ecosystem of integrated apps. Do they need to connect with Amazon, eBay and other marketplaces? Are they using Xero or Quickbooks Online for accounting? These integrations allow your client to build workflows that are totally customised, meaning that all systems fulfil a specific purpose and speak to each other.
If your clients are manufacturing their own products or if they are managing their own manufacturing workflows, they will need an inventory system that is able to handle the very specific needs of manufacturing.
Look for a system that is able to create and manage Bills of Materials (BOM) and account for a finished good’s complete list of component parts, including costs like labor and shipping. Your inventory management system should also be able to account for each Bill of Materials’ start state and end state as a finished good by creating and completing Production Orders.
5. Business Goals
A good inventory and order management system should be able to support your client’s growth plans. Ask your clients what their business goals are for the next 1-3 years.
Are they planning to expand their business globally or open physical stores? Are they looking to expand into wholesale? What are their revenue targets? Are they planning to expand their team by 100% in the next year? These goals will help your clients choose a solution that will continue to be right for them in the next few years. Setting up an inventory and order management system can take months for many companies. Moving off a solution because of unexpected growth is both costly and time-consuming. Your clients should look for systems designed for fast-growing businesses.
6. Better support
Depending on how much experience your client has with managing inventory and setting up online solutions, they will need a certain amount of support from the service provider. Some seasoned retail merchants prefer an autonomous approach- choosing to self serve rather than having a conversation with an account manager. These clients should look to save costs by buying a solution without dedicated support and that comes with resources that they can refer to.
Other clients have very little experience in the way of technology or inventory management. These clients would benefit from a more high-touch approach, with round the clock support and a dedicated account manager to help set them up in accordance with industry best practices. This level of support is often costly at the beginning but can save a company a considerable amount of money in the long run by reducing errors and inaccuracies.
Whatever the needs of your client’s business, they are a range of suitable options out there. What’s most important is that your client feels that the solution they engage makes their day-to-day operations significantly easier to manage, giving them the time to focus on building an amazing business.
TradeGecko is a commerce operating platform that gives entrepreneurs, founders and independent brands the commerce superpowers they need to build an amazing business. Our cloud-based platform levels the playing field and gives SMBs the edge they need to compete through automation, AI and integration with global platforms.