Implement Inventory Like a Pro #SNH16
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1 #SNH16
2 Implement Inventory Like a Pro #SNH16
3 Attending this Breakout session for the full 100 minutes entitles you to 2 hours of CPE. Please be sure you check in to the session using the mobile app or, if you cannot use the app, sign one of the sign-in sheets in the back of the classroom. Thank you! #SNH16
4 MARIO NOWOGRODZKI, CPA/CITP Principal, Mendelson Consulting Master of Acctg Info Systems Original ISP Advisory Council Adv. Cert QB, POS & ES ProAdvisor Intuit Trainer/Writer Network Industry awards: - Sleeter Group Top Technologist - VAR Stars, Technology Pacesetter, Killer VAR - Intuitive Accountant Top 100 ProAdvisor - Insightful Accountant Top 10 ProAdvisor - Insightful Accountant Top Integrations ProAdvisor 40 min. from Bahamas
5 Learning Objectives Working with clients that use inventory raises specific challenges that you need to understand and know how to resolve Understand different types of businesses that use inventory How to select the best add-on products for different client situations Specific challenges you can face: Landed cost what is it and how does it affect your client? Stocking products in multiple units of measure Pricing strategies that allow your client to sell in multiple markets True lot number tracking Tracking lot numbers through manufacturing and tracing customers that received them Reordering product when stock is low
6 Businesses That Use Inventory Retail Web store Wholesale / Distribution Assembly Manufacturing Raw Material Manufacturing Route / Direct Store Delivery
7 Typical Inventory Needs Multi-location tracking Bar coding Serial Number tracking Lot Number tracking Different costing methods Mobile picking, receiving Mobile routing
8 Complex Inventory Needs Accumulated costs, WIP Landed or added costs Web store integration EDI Scheduling / Forecasting (MRP) Shop floor control / Complex assemblies Substitute vendors / Substitute products
9 Selecting the Right Add-On Product Understand business needs Good track record Know the company If you are an inventory specialist If you are not an inventory specialist
10 Specific Challenges Landed costs Stocking products in multiple Units of Measure Pricing strategies that allow to sell in multiple markets Tracking lot numbers through manufacturing and tracing customers that received them Reordering product when stock is low
11 Specific Challenge: Landed Costs What are Landed Costs and why are they important? Fully landed cost is the total cost of a landed shipment including purchase price and added costs freight, insurance, customs duties and taxes, and any other costs up to the port of destination
12 Specific Challenge: Landed Costs Often these charges are received days or weeks after the product has been received into stock (and perhaps even sold!) Many companies expense the freight, customs, shipping, and other charges because it is too difficult and time consuming to allocate these charges to product costs Freight-In Expense = improper accounting
13 Required Purchase PO Client is a computer store importing printers for resale. Sales Price Mark Up Price Price Canon PIXMA MG3620 Inkjet Printer $ % $ $ HP Envy 4502 Inkjet e-all-in-one Printer $ % $ $ Epson Expression Home Xp-420 Inkjet Printer $ % $ $ Client orders a container that has 100 of each printer (300 total) Added costs associated with that container: Trans-oceanic shipping $1, Customs $ Insurance $ Freight to the warehouse $ $3, Added cost per printer (300 printers) $ PO Added cost Landed Actual What is the landed cost and actual margin Price per printer Cost Mark Up $ $ $ % $ $ $ % $ $ $ %
14 Specific Challenge: Landed Costs Product average cost before landed cost added:
15 Specific Challenge: Landed Costs Receive freight bill for $450 from Jones Check box to create payable for the vendor bill in QuickBooks
16 Specific Challenge: Landed Costs Load items in transaction from receipts on a PO
17 Specific Challenge: Landed Costs Load items in transaction from receipts on a PO
18 Specific Challenge: Landed Costs Allocate the freight charges based on the quantity of each product received on the PO
19 Specific Challenge: Landed Costs Allocate the freight charges based on the quantity of each product received on the PO
20 Specific Challenge: Landed Costs Product average cost after landed cost added:
21 Specific Challenge: Units of Measure Many times, inventory needs to be sold in more than one Unit of Measure Generally, stock in the smallest Unit of Measure sold or used in manufacturing (each, piece, etc.) Add alternate Units of Measure (case, box, dozen, pallet, etc.)
22 Specific Challenge: Pricing Levels When inventory is sold to multiple markets, pricing products can be a challenge: Need multiple price levels Need multiple pricing tiers within a price level Effective dates and end dates lets you offer specials
23 Specific Challenge: Setting List Prices Inventory clients need to establish a list price. This could be a specific amount or related to cost (average cost, last cost, etc.) Pricing for price tiers could be a specific price or based on the list price or the product cost
24 Specific Challenge: Pricing Continuing the pricing discussion, we just set up pricing for the product to be sold by each to 3 different levels of customers To sell by the dozen, box, case, etc., we would set up a table similar to the one we did for each All of the above prices are in US $; if selling in another currency, similar tables would be set up In Acctivate, all of the pricing information can be imported
25 Specific Challenge: Customer-Specific Pricing Even with all the work you may have done, your clients will have customers who have specific pricing needs. You would generally assign a default price level (e.g. Dealer ) so most of their pricing is dealer pricing. You can then set up as many products as needed with customer specific pricing it applies only to that customer.
26 Specific Challenge: Lot Numbers Lot Number challenges: Not all products need a lot number or a serial number Positive control of the lot from receipt through manufacturing to the finished good at the customer s location Expiration date tracked by lot number
27 Specific Challenge: Lot Numbers Positive control of the lot from receipt through manufacturing to the finished good
28 Specific Challenge: Reorder when stock is low For inventory businesses, one of his biggest fears is being out of stock Being out of stock means lost sales and unhappy customers Over stocking means too much $$ sunk into inventory
29 Specific Challenge: Reorder when stock is low Inventory software needs a way to maintain stocking levels without over-investing in inventory. Different software will do things differently. Acctivate tracks available inventory and minimum stocking level. Acctivate also tracks the minimum order quantity.
30 Specific Challenge: Reorder when stock is low All products where available stock is below the minimum stocking level are displayed in an Inventory Alert screen User identifies the products they want to order Acctivate suggests: a preferred vendor a quantity to buy (minimum order amount) a PO price (based on the last purchase from that vendor) All of these may be changed
31 Specific Challenge: Reorder when stock is low All products where available stock is below the minimum stocking level are displayed in an Inventory Alert screen. The client identifies the products to be ordered. Acctivate suggests a preferred vendor, a quantity to buy (minimum order amount), and a PO price (based on the last purchase from that vendor). All of these may be changed.
32 Specific Challenge: Change in manufacturing BOM In some product manufacturing, the process is static there is never a change in the BOM In some industries (food, pharmaceuticals, fluids, etc.), the process is not static often need to vary: Components in the BOM Quantity of components used compared to the recipe Yield of the manufacturing process
33 Specific Challenge: Change in manufacturing BOM Set up the components for the BOM
34 Specific Challenge: Change in manufacturing BOM Set up an assembly for 10 gallons of tomato sauce with the standard components in the BOM
35 Specific Challenge: Change in manufacturing BOM While a work order was being processed, there were several deviations from the expected norm: 160 Lbs. of tomatoes were used instead of 150 Lbs. There was not enough of one lot number to create the assembly so two different lot numbers had to be used There were not enough white onions so yellow onions were substituted 10 Lbs of white onions 12 Lbs of yellow onions 28 Oz. of garlic was used instead of 30 Oz. The Yield was actually 11 Gal. instead of 10 Gal.
36 Specific Challenge: Change in manufacturing BOM
37 Specific Challenge: Change in manufacturing BOM
38 Specific Challenges of Clients with Inventory Wholesale / distribution and manufacturing clients have special challenges that need to be addressed Consultants that work with inventory clients have a number of opportunities for larger billable engagements: Setup and implementation Initial training Subsequent training for new employees Report writing
39 Thank You for Attending! Intuit has recommended these apps that may be of interest to you. Each of the apps below relate to the subject matter covered in this course. Intuit encourages you to learn more about these apps when visiting the Exhibit Hall. Stitch 7 Stage Unleashed Exact Online SOS Inventory DEAR Inventory
40 Help? #SNH16
41 We sincerely appreciate your taking time to complete your session evaluation. Our goal is to provide you with the very best training possible and your feedback can help us achieve that goal. Thank you! #SNH16
42 Thank you for attending! #SNH16
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