What is Supply Chain Management (SCM) in ERP?

Supply Chain Management
Reading Time: 8 minutes

Summary: Supply chain management is a crucial segment of any industry. Monitoring the entire process of the supply chain is intricate and time-consuming. Plus, the methods followed for the supply chain’s efficient function are constantly evolving. The intervention of technology has paved multiple ways for the supply chain network to function with more agility and efficiency. ERP Software has been a supportive tool for the manufacturing industries to work more effectively. Now ERP System has undergone a lot of updation so that business operations can be conducted with more integrity, transparency and accuracy, saving a lot of time.

 

What is Supply Chain Management (SCM)?

SCM or supply chain management is the process of monitoring the entire supply chain network, from the procurement of raw materials to delivering the finished product to the customer. The main focus of SCM is to ensure maximum quality of the goods, safe and on-time delivery, best customer experience and significant profitability. In addition, the executives must monitor the continuous flow of goods, data and finances to prevent blockage and confusion. The impact of the supply chain’s actions is reflected in the business, whether positive or negative—better supply chain management results in achieving happy customers and ROI.

Examples of Supply Chain Management

Two examples of supply chain management are explained below : 

Generic Supply Chain Management

  1. Sourcing and selection of raw materials.
  2. Raw materials are collected by the logistics provider and given to the supplier(wholesaler).
  3. Later the raw materials are supplied to a manufacturer, wherein it undergoes a manufacturing process and is converted into a finished product that the consumer can use.
  4. The product is then distributed to the wholesaler, who sells it to the retailer.
  5. The retailer sells the product to the customer completing the entire cycle. Again the same process is repeated.

SCM

Supply chain for an e-commerce company

  1. The supply chain management of e-commerce is different from the generic module. E-commerce company sell their products using online platforms.
  2. The customer places an order for the product on the website. Then the product order is processed by checkout cart or third party product such as Shopify.
  3. Then the customer uses payment processors like G pay to pay for the product. Then the function of the SCM gets into action.
  4. As soon as the order is placed, the warehouse is notified and prepares the product to be taken by the logistics provider or in-house.
  5. The logistics provider then ships it to the shipping company, who then delivers it to the customer at their doorstep.

Supply Chain Management

Components of Supply Chain Management

Supply chain management functions are based on five major components :

  • Planning 

In supply chain management, planning the entire supply chain process is essential. Plan to execute effective supply strategies to match customer demands. Create a framework to maintain continuous supply and flow of raw materials to meet manufacturing demands. Large manufacturing industries rely on ERP systems to predict future supply chain requirements and plans.

  • Sourcing

Sourcing raw materials for the manufacturing process is a complex task:

  1. The raw materials have to meet the set quality demands.
  2. The price of the raw materials should meet market value.
  3. The supplier should assure a continuous supply of raw materials even during unforeseen events.

Make sure that the vendor supplies the raw materials on time. Especially when sourcing perishable goods, the vendor must be cautious. So, choose a vendor complying with your company’s supply chain needs.

  • Manufacturing

Manufacturing is an integral part of supply chain management. In this process, the raw materials are blended and transformed by using machinery, labour or other forces into a finished product that the consumer can use. But, manufacturing the finished product is not the final step of SCM. The next step is to assemble the product, inspect its quality and features and finally pack it carefully.

  • Delivery and logistics

In this stage, products are finally packed, ready to be shipped and delivered to the customer. A company should have robust logistic capabilities and delivery channels to reflect its brand image. Always plan to have a backup in case of any temporary distribution emergency.

  • Returning

The final part of the supply chain process is receiving product returns. Customers usually return the product if it is found to be defective. If the error is on the company’s part, it reflects the brand’s image. So this return process is called reverse logistics. Companies should be prepared with a plan to collect the product and return the customer’s refund.

However, it must be noted that customer returns are not just interactions between the customer and the company. Customer returns indicate the company inspects the defective, expired and non-conforming goods. Find out how many faulty products have reached the customer. It is the company’s responsibility to recall the product to save brand image.

<<<Also read: What are the main Features of Supply Chain Management?>>>

Challenges of Supply chain Management

1. Cost Hike

Throughout the supply chain management channel, costs have been increased, and profit margins are under sheer pressure. There is a lack of visibility and accountability, which apparently increases operational costs. Also, many factors are responsible for this price hike, including an increase in fuel price and commodity prices and high labor costs from manufacturers and suppliers.

Some complicated international logistics are shifting towards high charges for quick transfer and storage of product management. Also, commodity prices are on a hike due to the increasing cost of raw materials.

2. Complexities due to Multi-Channels

Customers prefer buying products through multiple channels. As the market expands, the supply chain should adapt. Hence, supply chain managers are required to generate variations on functions to address every channel. Also, it has become mandatory for managers to manage multiple supply chains, varied organizations, and third parties. This would ensure a better customer experience irrespective of how customers receive and order products. The rising complexities in the supply chain owing to multiple channels are a significant challenge for the sectors. 

Today, eCommerce websites are selling products to customers directly, requiring local logistics and quick delivery. Also, traditional wholesalers need large storage spaces near metro areas and precise inventory control. This will ensure that the products are available in ample amounts during the supply chain process.

3. Risk Factors in Supply Chain

Environmental fluctuations, economic pressures, international complexities, and trade-related conflicts directly or indirectly pressure the supply chain sector. However, these pressures can turn into risks and issues through networks. And this causes significant problems. 

Today, customers and clients are spread across the globe, which needs keen coordination and management. However, creating additional steps to the supply chain produces high complexities for downstream and upstream members. In terms of compliance, regulations, and quality management requires rigid agreements, controls, and contracts, which is a difficult challenge to overcome. Supply chain management managers are advised to produce contingencies along with mitigation action strategies to eliminate risks and manage them efficiently. 

4. Volatile Nature

Complexities and volatile nature create problems in supply chain management while also affecting the entire infrastructure. Dealing with these issues promptly is one of the tough challenges for managers before developing bottlenecks and more. The increase in the number of internationally sourced goods is causing port congestion. It pressurizes trains, ships, and trucks that require loading, unloading, and more functionalities. 

Some political situations are responsible for making tariffs throughout trade routes. It has resulted in additional fees and increased processing time of customs. Moreover, there has been a shortage of skilled drivers in trucking capacity. Due to the increasing pressure on the drivers, they are finding less lucrative jobs. And hence, logistics are facing difficulty attracting or retaining the right persons.   

5. Accountability & Compliance

Organizations are bound to consider social compliance while doing business across the globe. But, the supply chain sector is currently facing several unethical practices, including child labor practices, low wages, and more. Over time, verifying supply chain management partners to follow the standards has become essential. 

Managing risk-related issues is one of the top concerns for managers. The problems include legal issues and brand damage that causes irreparable damage to businesses affecting profit.

6. Quality Defects & Language Restrictions

Quality defects are pretty hard to manage since there are a lot of differences in accepting the defect stages in different countries. It is necessary to check the quality level and the ratio of acceptable defects in the coming time. 

Also, various countries conduct daily operations in different languages, which is again a challenge in the industry. To resolve these issues, supply chain management businesses should hire professional interpreters having skilled knowledge. This way, the language barriers can be eliminated.

<<<Learn more: Explained: Logistics vs Supply Chain >>>

Sage X3 ERP

Sage X3 ERP for Supply Chain Management is a feature-rich ERP Software solution that adds real essence to the complete supply chain management, including inventory management, material procurement, end-to-end customer product delivery, and more. The enterprise resource planning software has the potential to coordinate and integrate significant flows, including information flows, material flows, and financial flows. Make precise execution, control, planning, and monitoring in the supply chain management with Sage X3

How does Sage X3 combat the challenges mentioned above?

Inventory Management

Easily track and manage the availability of raw materials, spare parts, and stocked goods. Get updated asset management, future inventory, barcode integration, price prediction, and more with this supply chain management feature.

Track logistics and shipping

Coordinate appropriately with transportation channels, enhance customer satisfaction, and improve delivery management with an ERP system.

The logistics and shipping feature of Sage X3 supply chain management software helps with storage optimization, labor management, labouring, and much more functions.

Precise forecasting

With the specific forecasting feature of this supply chain management software, you can easily predict customer demands while planning the procurement and production processes accurately.

Eradicates the need to buy unnecessary raw materials or to store additional finished products in warehouses. This way, it reduces the overall cost of management.

Real-Time KPI

Sage X3 offers team members instant and latest updates on customer orders, inventory levels, and additional key factors. It aids businesses in tracking and monitoring supply chain problems which would help make quick decisions.

Moreover, by integrating ERP in supply chain management, Sage X3 supply chain management software would offer you the ability to analyse real-time KPIs. This helps check opportunities and concerns to make respective process adjustments and improve results.

Full Automation

Sage X3 enterprise resource planning software offers high-tech automation with which your supply chain business can save a lot of time. Your team can work more efficaciously by automating data inputs and other business functions while dedicating more to the most crucial tasks of the supply chain business.

With the highly integrated supply chain management SCM software solution, your business can make software needs simplified while minimizing human errors.

How does Supply Chain Management Software increase productivity?

In addition to effective planning, forecasting, and simple collaboration, an ERP is a boon in boosting supply chain efficiency in business disruption. We know that market disruptor are tough to compete in every industry, and if one hits your business, you should be able to get these changes quickly to complete the job.

Critical issues such as pandemics have shown how essential it is to have proper responsiveness and preparation to stay abreast of the competition. Today, businesses have been focusing on supply chain adaptability, speed, and risk management while not considering cost savings as a significant factor. Their goal has been to respond to customers’ requirements through flexible sourcing or connected supply chain networks. 

Sage X3

Sage Software Solutions is a leading IT company with an array of advanced ERP software solutions. Our proprietary products — Sage X3 and Sage 300 will help you cut your operational expenses, improve business productivity, increase operational efficiency, forge robust customer relationships, and strengthen association with vendors, suppliers, and distributors. So, if you are looking to reinforce your business fundamentals and emerge as an industry leader, then please schedule a call with one of our sales representatives.

What are the main Features of Supply Chain Management?

features of supply chain management
Reading Time: 6 minutes

Summary: Earlier, international trade was confined to particular pockets worldwide. But today, it’s much more connected and dependent on multiple interconnected partners distributed across the globe. UNCTAD’s Global Trade Update report shows that global trade reached USD 28.5 trillion in 2021, an increase of 13% compared to 2019 and 25% compared to 2020. And this is where the features of supply chain management software help. They automate manual and repetitive actions, facilitate interdepartmental information, optimize logistics & warehouse management that forge robust and trust-worthy relationships between value-chain partners & customers, and create wealth-generating opportunities. 

This article will shed light on seven critical features of supply chain management that will help you gain a better strategic perspective of your company and the industry.

1. Real-time information capability

With access to real-time information, you can avoid missing goods, eliminate bottlenecks, and respond to customer queries and grievances quickly. Moreover, the features of supply chain management software allow multiple stakeholders to be on the same page while working on a particular project. The best part is that they don’t need to take permission from different departments to access business-critical documents and essential updates. Instead, they can obtain it instantly. 

Here’s an example to explain this concept. Consider Truck A located in City A picks up a consignment from a company’s warehouse. Unfortunately, the engine breaks down on the way, and the truck can no longer travel. Now, the problem is that the company must pay a fine if the truck fails to deliver the items within the specified duration. This is where supply chain management software will come into action. It will automatically intimate the closest truck, say truck B, to pick up the items from truck A, ensuring items are delivered to the destination within the prescribed time. Thanks to supply chain management software, end-to-end traceability and collaboration between multiple partners has become easier than ever.

Here are a few features of the supply chain management system that ensure real-time and collaboration capabilities:

  • Real-time notifications: SCM software intimates business stakeholders about each supply chain activity — level of raw materials and finished goods in the warehouse, real-time location of delivery vehicles, and allows them to access critical documents. It also sends notifications to suppliers if the inventory level goes below a predetermined threshold. 
  • Customized dashboards: Each business stakeholder can view domain-specific data and gather valuable insights through easy-to-use dashboards. This feature provides constant monitoring of business processes and simplifies corporate governance.
  • Authorization and privacy: One of the best features of supply chain management software is that it allows only authorized personnel to access business-critical data, ensuring crucial information is in safe hands.
  • Self-service portals: A supply chain network consists of multiple partners operating from different locations. Therefore, each of them can’t stay in touch at all times, leading to communication challenges. Password-protected self-service portals allow business partners to share plans and information based on the partner’s activities and preferences, allowing constant communication whenever required.

2. Integrating the whole supply chain

One of the best features of supply chain management software is that it integrates the distributed features of the supply chain, including warehouse centers, Original Equipment Manufacturer (OEM), vendors, suppliers, distributors, customers, packers & movers, and shipments. Moreover, it also integrates disparate business management solutions like email, help desks, third-party applications, legacy systems, etc. 

These features build a robust network of information flow and a single source of truth, eliminating connectivity issues. Other benefits include:

  • Efficient use of logistics
  • Better production planning
  • Avoiding excess inventory and stock-outs
  • Eliminate the cost of updating and maintaining disparate information systems.

Other benefits of implementing supply chain management software are: 

  • Operation managers can create BOMs, bills, and customer orders from a centralized location.
  • They don’t have to use disparate systems and upload updated reports across different systems. 
  • No human-induced errors and no chance of miscommunication.
  • Systems can be customized based on customer segments and product categories.

3. Forecasting 

Businesses today need to forecast the changing market conditions and customer preferences. Without solid forecasting power, it’s impossible to know customer needs, wants, desires, and ambitions, meaning you might lose a fair share of your customers to your competitors. 

Forecasting capabilities and advanced analytics are one of the most important features of supply chain management software because of the following reasons:

  • Forecast events most likely to occur, allowing you to take preemptive action.
  • Recognizing bottlenecks in the system, helping increase production speed and reducing production time.
  • Get a comprehensive picture of the business’s current performance and determine its future trajectory.
  • Identify system inefficiencies, capitalize on strengths, and understand how business performance will change.
  • Planning future customer demand based on the current one.
  • Identifying a bad product and recalling it before the customer asks for an official product recall. 

Forecasting also mitigates risk by anticipating future demands, allowing you to keep a suitable amount of inventory in the warehouse by providing deep insights based on factual data. It also includes what-if simulations that help you learn how to deal with challenging situations that might come up in the future. 

<<<Also Read: 10 Interesting Questions Related to Supply Chain Management>>> 

4. Cloud-based accessibility

Cloud-based supply chain management features allow authorized users to access and use features from anywhere, anytime, and on any connected device. The most significant advantage of this feature is that the cloud-based solutions can be set up at a fraction of the cost, in relatively less time, and at a marginal risk compared to on-premise ERP systems

Other benefits include:

  • Shipping order status can be updated immediately.
  • Real-time alerts can be shared on the customer’s smartphone instantly.
  • Issues can be resolved at short notice.
  • Different parties can collaborate and work toward achieving common business goals. 

5. Process optimization abilities

Optimizing business functions is one of the essential features of supply chain management software. It allows employees to focus on mission-critical tasks instead of wasting time on repetitive and manual processes that give rise to human-induced errors and take a lot of time. Instead, automated systems can perform simple tasks rapidly without the risk of committing errors and also helps increase revenue. 

Companies can automate business functions, such as:

  • Order-to-cash cycle
  • Paper-based documentation
  • Inventory & Warehousing
  • Manufacturing
  • Logistics & Delivery

Companies can also use AI and machine learning algorithms to perform other crucial tasks, such as checking whether the product is in a usable or best-finished state without any human intervention. In addition, AI’s optimization capabilities allow supply chain companies to move goods from source to destination at the lowest cost possible. This capability is of great help at a time when fuel prices are skyrocketing and national and international shipping regulations are continuously evolving. 

6. Customizes supply chain management software

One of the best features of supply chain management software is that it can be customized based on the user’s needs. Business rules can be rewritten and new features can be added on an ad-hoc basis, allowing companies to launch their products in the market quickly. Moreover, most supply chain management solutions enable developers to make changes using programming languages like Python and Java. Supply chain software’s open architecture allows companies to build indigenous applications or tweak existing apps suitable to their business environment. Companies can also build unique variations of existing products to fulfill the changing needs of various customer segments and enhance their productivity. 

7. Data Security

Do you know data security breaches are rising? According to recent reports, India ranks sixth on the global breach list. Since 2004, 254.9 million Indian accounts have been leaked and the number is rising rapidly. Even a slight compromise with data can have massive repercussions like:

  • Loss of customer trust leads to reduced customer loyalty, which decreases customer segment size.
  • Loss of vendor, supplier, and distributor trust causes business loss.
  • You come under the purview of the government, regulatory bodies, and watchdogs and may be levied with heavy fines. 

Therefore, while selecting an appropriate supply chain management software, you should evaluate the following things:

  • Configuration of HTTP security header options 
  • Compliant with corporate security tools like LDAP, OAuth2, etc.
  • Ability to manage the second level of signature to sign modifications on critical fields.
  • Full traceability and security that changes are done only by authorized users.
  • Information is restricted depending on the user based on factors like a group of companies, a group of logical data, etc.

ERP Sales Modules and its 8 Powerful Features

ERP sales modules
Reading Time: 5 minutes

Summary- Today, with the rising competition in the market, organizations have been focusing on deploying ERP to attain success and desirable profits. However, it has become essential to understand various ERP sales modules and deploy them to carry out respective business operations. So, let us see the 8 core features of ERP sales modules you should consider. 

ERP sales modules

ERP sales modules is one of the most essential elements of a business since it helps handle all business activities for export/ domestic sales of an organization. The customer, as well as product databases, are stored and well-maintained in the ERP sales modules. However, the ERP sales modules also involves a few steps including sales and marketing, order placement, dispatching, getting inquiries, and order scheduling. 

Let us learn about the 8 important core features of ERP sales module in this post. 

1. User Database 

Usually, the account name with which your business is associated is classified as ERP prospect, suspect, or customer. However, the users can easily be grouped within the ERP database in order to create a baseline. On the other hand, advanced delivery tools would encompass tools such as prospecting tools, connected customers, and sales pipelines. 

2. Quotations 

The basic structure of quotes in the case of ERP sales modules is quite similar as per the order. While there has been no agreement to deliver. However, quotes usually get a closure date once the quote is not valid. After the completion of the negotiation period, the ERP sales module would help convert a quote into an order. 

3. Credit Limitations 

Whenever orders are to be delivered prior to payment, a company can set a credit limit for every customer. However, this would call for an alert in the ERP system whenever orders are exhausted. The system limit can call for shipments to be conducted till payment is received for those orders that are shipped and are yet to be paid. 

<<Also Read: Add-on modules in ERP Software and their benefits>>

4. Multi-layered sales order 

It is another important sales module. When an order is taken, there is some product description mentioned along with the sales amount. However, these description lines can be divided into releases where a small piece of description may have various delivery dates along with different quantities. Also, a sales order might have a request date wherever the customer would need that product. 

An ERP system can also aid multi-layered configuration while setting up correctly. However, the approved date can also be set in ERP like a shipping/ delivered date along with the transmitting process. 

ERP sales modules

5. Forecasting sales 

The sales prediction is another aspect of the sales module. It includes expected future sales by the consumer. A lot of ERP systems involve a number of statistical models to showcase the future from previous sales patterns. However, these models should project future sales as per the previous past patterns. These predictions are made based on the order history, growth projections of customers, supply chain type, and more. Also, forecasts are implemented to forecast order demands required to schedule future capacity or even component purchases. 

6. Backlog 

An ERP software should offer a database that will be query-able regarding all open orders. This is all sequenced by the due timings. Additionally, those orders to be executed in the next month might not have any systematic or immediate plan and this is exactly where the quality, as well as production control models, comes to the scene. 

7. Sales region 

It is an important element of ERP sales modules. An ERP software can offer geographic or even similar sales breakages through a salesperson. Also, every person who is selling will take a specific territory in the system. The person will be solely responsible for bookings, orders, as well as, backlog in that particular region. 

Even if you do not have at all a sales-driven business, fetching knowledge of the tremendous efficiencies connected with ERP sales modules can give an immense impact on the ROI system. 

8. Return Material Authorization

While choosing an ERP software, you should also look if it offers RMA i.e. return material authorization. Whenever a customer demands to return a particular shipment, they will be asked for authorization which is typical for negative orders. 

The Topmost Benefits of ERP Sales Modules

  1. Database organization- The sales modules help fetch comprehensive details of your customers while also offering sales, marketing, and customer service data in an organized manner. Moreover, it offers you real-time data as well as accurate decision-making power.
  2. Error-free sales forecast- The modules can record data efficiently with important factors to consider. The crucial real-time data aids the sales section to perform accurate sales forecasts.
  3. Sales process layout- It helps build a sales team to see all required information at a single place. This will help salespersons track, monitor, and manage all sales function stages according to the status.
  4. Improves performance- ERP sales modules can update data, can schedule work, and can easily follow up on notifications regarding the sales process. This way, sales representatives can focus more on making more sales while enhancing the business performance.
  5. Enhanced internal cooperation- The ERP sales module helps salespeople work together flawlessly. It collects data on every work and shows it in a presentable way. This makes it even easier for everyone to work together. Moreover, the modules help fetch data quite easily while also aiding in decreasing the time required by skipping unnecessary meetings and collaboration.

ERP sales modules

ERP Sales Module Process

Now., let us see more about the ERP sales module process and how it works. 

  1. At first, the customer starts an RFP (Request for a proposal). 
  2. Then, after receiving the proposal, the sales team reviews it thoroughly. 
  3. During the review process, the sales team sees whether they can offer a proposal to meet customer needs.
  4. If the requirements are matched, the ERP sales modules team develops a proposal and then sent it to the customer. 
  5. Now, the customer would examine the proposal and would decide to move forward or not. 
  6. With the approval of the customer, the sales team would develop the respective contract and can send it to the customer.
  7. Again, the customer would review the contract and can decide to move ahead or not. 
  8. On the approval, the customer can start an RPF (Request for a proposal). 

<<Also Read: ERP Reporting: 7 Features to Consider for Your System>>

Down the Line 

Here, we have seen the core 8 features of the ERP system sales module and how they are benefitting the businesses. An ERP system implementation, as well as its purchase, might be an exciting task at the beginning. But, choosing the right ERP system for your business can make the foundations work well and help you grow your business with the passing time. The best ERP sales modules for your company can meet the requirements while helping you confront the prominent challenges as well as opportunities to showcase growth. 

 

12 Steps To Choosing The Right ERP Software

ERP software
Reading Time: 6 minutes

Summary: ERP Enterprise resource software is a vital tool for businesses which helps integrate business operations while making the functions even more smooth and flawless. However, it is quintessential to know the steps of choosing the proper ERP software which will suit your business requirements. This blog will talk about the crucial 12 steps to consider before selecting the right ERP software

ERP software

There is no doubt that ERP (Enterprise resource planning) systems are the mainstays of modern organizations. When it comes to answering what is ERP system then it is clear that ERP systems offer higher flexibility and integrate business functions, they can help businesses hugely to stay compliant in the competitive environment. The manufacturing sector has seen great supply chain as well as traditional business operations disruptions due to the pandemic. 

If your business is experiencing a limp with legacy or has a few different concerns, it might be a perfect time to invest in repairing how your business has been operating. 

What is enterprise resource planning?

So, while explaining what is an ERP system we must say that ERP is software that involves technologies that companies used to integrate business operations. Through this, users can integrate with the single interface and can share critical information while allowing extensive data collaboration. 

Steps to select the right enterprise resource planning ERP

Step 1: Rectify the operational errors 

The most important step of enterprise resource planning system selection is to rectify the issues. Suppose you are conducting an inventory through spreadsheets and are transferring all the inventory data manually to the accounting software. Undoubtedly, this must be taking much time and full of errors that couldn’t add some value. So, the best solution is to get a well-managed cloud-based ERP system that can integrate accounting and inventory. Additionally, you should review all business functions and see if there are any other functions that require a double entry or is there something that needs improvisation in the automation. 

<<Also Read: How to use ERP software?>>

Another fact of an ERP selection process to consider is while undergoing vendor selection is that large businesses come with a never-ending list of business needs. And most vendors assure you that they can satisfy your requirements. But, you should always stick to those vendors specifically that improve the critical business functions including cost, time, and training. 

Step 2: Get the proper amount from major stakeholders 

For better results, the employees, as well as stakeholders, should be inspired to transform and take part in evaluation functions. It is also important to remember that the ROI does not come just from the cost savings. When processes are enhanced through automation, the executives can easily work smarter. Moreover, time-consuming tasks are eliminated while offering higher customer satisfaction, employee retention, and high productivity. 

Step 3: Ensure the system is reliable 

To contribute a major role in onboarding an advanced ERP enterprise resource planning ERP system, it is highly recommended that you hire a stakeholder. There lies a logic behind this. The particular stakeholder can inspire others to get successful in ERP implementation. Hence, having an experienced person during selecting the ERP systems is a must. 

ERP software

Step 4: Get an experienced product person 

An ERP system is the main infrastructure that is required to stay reliant to grow with the company. Seek an open, modular, and flexible system. The system should go in sync with other systems. It might include integrating with suppliers for JIT manufacturing to easily integrate with the consumers. 

On the other hand, you should check if the system is modular enough to see the advanced functionality of the manufacturing advances. Also, you should check if the enterprise resource planning ERP system can grow as the business improves. 

Step 5: Check whether ERP systems have mobile access 

You should check if the mobile access is linked to the desktop browsers or if it is just an application specifically designed to check the desktop view. The motto of ERP software having mobile access is that your customers should be equally productive on tablets as well as smartphones when compared to office desktops.

Step 6: Make sure the ERP software is easy to use 

Manufacturing ERP enterprise resource planning software has a wide range of users. However, the user interface should be precisely structured and intuitive to its use. A well-designed interface will however help enhance employee satisfaction along with high productivity. 

Usually, UI/UX is the most critical factor when choosing an ERP solution. If you are having a user-friendly ERP with great-designed dashboards helps build better productivity and efficiency among employees. 

ERP software

Step 7: Select the appropriate deployment option 

An ERP system includes a wide array of users right from the cloud, solutions, and hybrid deployment solutions. These solutions have enhanced points whereas the benefits are far different from the on-site solutions. These benefits include high expense which gets minimized later as cloud systems function on a pay-as-you-go model. 

One of the benefits of ERP to consider is that the IT staff gets reduced since the functions are well operated by the software and vendor which is always active. Also, the cloud-based systems are greatly scalable and reliable that offer a high range of advantages to their users. 

Step 8: Authenticate support & training options

Before selecting the right ERP software, you should always check if the vendor has previously trained a group of people in the business. It is because the efforts of the vendor will be complemented by advanced training availability. 

However, it is mandatory to develop training timings with the vendor while allowing staff to commit to the training schedule. It is a simple concept that if nobody knows how to run the ERP software then it is definitely not worth investing time and resources into it. 

Step 9:  Select a vendor who knows your business requirements  

For most businesses, transforming to a new ERP software might need some outside help. This could happen either due to IT staff restrictions internally, a shortage of skills, or even due to time pressures. However, it all depends on whether you are partnering with any ERP vendor, with a systems integrator associated with ERP vendor or with a single technology consultant or a reseller. 

Do not choose a vendor who just gives you a tech-speak while elaborating the features of their ERP solution. Look at the real side of it and then take the final decision. Also, it is necessary to check if the vendor understands your business requirements. It is always better to have such vendors who would help resolve your issues accurately. 

Step 10: Get a demo prior to the initial process

In some cases, businesses get the entire vendor selection procedure and then ask the vendor to conduct a demo that showcases the employees working of ERP software. However, as per the expert suggestions, better planning is to ask a couple of vendors to give a demo at the starting phase and see how your employees are responding to the new system. See if the new system has some feedback or if there are some restrictions that are being imposed on employees without any prior notification. 

ERP Software

Step 11: Make the best of the agility 

Usually, legacy ERP software is treated as the most inflexible one that cannot be updated with the business since they are designed in a complex way. Since there has been an agile software development process, companies have been improving. Through no-code and low-code alternatives, businesses can make improvements to business operations without hampering the base ERP software. However, to get these things in place, companies must have appropriate governance. 

Step 12: Make a wise decision 

While selecting an ERP system, it is a must that you check hidden costs in the implementation process. You should also analyze before finalizing contract navigation while predicting the go-live date. 

Remember that before you start defining the ERP selection criteria it is a must that you should chalk out all the necessary requirements for your business and make a wise decision. Without clear definitions, choosing ERP software would be difficult. 

A quick glance at important questions for Choosing Enterprise resource planning software-

Now, let us see a few questions you must think of before purchasing ERP software. 

  1. Know the modules you hold
  2. Do you have mobile access?
  3. Is there any scope for advanced technologies?
  4. Can your ERP system be easily integrated with other tools at your workplace?
  5. Do you give industry-related solutions?

Down the Line 

An ERP software implementation might be a tedious task specifically for those businesses having outdated functions to fulfil the current enterprise stacks. However, the above-mentioned steps will help your business get the most appropriate ERP vendor while implementing a new system within a short amount of time and increased the success graph. 

The first 90 days action plan for a new SaaS CFO

SaaS
Reading Time: 4 minutes

A CFO is a critical post in any company that supervises various department functions. Some of the crucial financial tasks that a CFO has to carry out are:

1. Brainstorm profitable financial strategies.

You should be able to devise pricing strategies that are profitable to your customers and your company.

2. Forecasting short and long-term revenue.

You should possess the knowledge, skills, and expertise to forecast your SaaS business’s short- and long-term revenue. It includes calculating monthly recurring revenue (MRR) and annual recurring revenue (ARR).

3. Decreasing churn rate

Apart from creating concrete financial and pricing strategies, you are also expected to devise techniques and methods to decrease the churn rate to its bare minimum.

The first 90 days play a pivotal role in your career as a CFO of a SaaS company. It projects your skills, expertise, experience, and determination to succeed and tells your senior management you have what it takes to grow the company.

Are you already working as a CFO in a SaaS Company? If not, we will first delve deep into the questions you should prepare for landing a CFO role. And after that, we will recommend the main points you should keep in mind for the first 90 days as a CFO.

Interview tips & tricks for landing a CFO role

Interviewing for a senior role in a SaaS company is challenging, but you can keep the following points in mind to subside your fear and fare well in the interview. 

Mark the following list:

1. Get a deep understanding of the company

It would be best to comprehensively understand the company’s vision, mission, values, and culture. Then, check whether your interests align with the company’s culture and whether you are passionate about achieving their short- and long-term goals. 

2. Focus on the following three questions

Pay attention to the following three questions before making the final call to join the SaaS company.

  • What are the primary challenges facing the SaaS company?
  • Do you have the required skills, knowledge, and expertise to solve those challenges?
  • Would you like to invest time and are you passionate about solving those challenges?

3. Be an equal partner in charting your CFO journey

Most newly hired CFOs make the mistake of accepting the 90-day action plan designed by the interviewers and other panel members in the senior management. As a result, your performance will be suboptimal for the first 90 days, which can form a bad image in front of the senior leadership.

Below you will find a list of what should be your approach in the first three months.

Month 1: Listen & learn as much as you can

The first month is about listening, communicating, and assimilating as much information & data as possible. 

In the first month, learn the company’s mission, vision, and values. Then, pay attention to their strategic positioning, customer segment & target market, and get an in-depth understanding of their products and services. Other essential things you should know about are:

  • What market segments do they offer products — niche or general?
  • Which marketing metrics do they use as benchmarks?
  • What is their investment strategy and how do they raise funds?

It would be best if you note down these facts & figures in a notebook that you can refer to again. It would help if you also formed robust relationships with many employees to bank upon at times of need. Genuine relationships help you seek answers to difficult questions, get sincere feedback, and seek valuable insights. 

Keep this famous quote by Richard Branson always handy.

cfo

At least in your first month as a CFO, you should listen more than you speak. Once you get a clear sense of your challenges, risks, and what you are expected to do, you will be able to deliver your best.

Month 2: Start prioritizing and strategizing your activities

After assimilating critical business information, it’s time to plan, strategize, and brainstorm effective market strategies to keep pace with changing market trends and customer preferences. So, now it’s time to implement business management solutions and find solutions to critical business issues. 

This discussion brings us to the essential term “organizational capital”. And there are two things you must consider while discussing this topic:

1. Leadership capital: It refers to the goodwill you have generated with your fellow team members while you are working in the company. Another important thing is your leadership style. A CFO should be a powerhouse of energy. They should know when to sit with team members like a friend, when to handhold them, when to admonish them, and when to threaten them with punitive action. 

2. Integrating technology: Organizational capital focuses on implementing business management solutions to enable the SaaS company to scale up quickly and efficiently. These include Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems that help increase productivity, enhance efficiency, cut operational costs, and forge robust customer relationships.

Focus on developing both components of organizational capital in the second month. Along with implementing the best quality control mechanisms and automation technology, you should also focus on developing strong relationships with your team.

<<<Also Read: Is CFO the last man standing when it comes to Cloud?>>>

Month 3: Implement & Act

After two months of intense deliberation, brainstorming, and forming better relationships, it’s time to implement your learnings and get into action mode. 

So, here are three essential accounting processes that SaaS companies need to streamline:

  • Internal reporting: What KPIs are being used as a benchmark for evaluating accounting processes? Based on what metrics are these KPIs selected? How often are these KPIs tracked? 
  • External reporting: Are the company’s external reports precise, accurate, consistent, and reaching the right people?
  • Taxes & compliance issues: With automated accounting software, calculating taxes and adhering to compliances is easier than ever.

Why use business intelligence software in 2022?

Business intelligence software
Reading Time: 4 minutes

Summary: Business intelligence software involves business data while representing convenient views like dashboards, graphs, charts, and reports. BI tools help business users to get various types of data such as historical, current, semi-structured, unstructured, in-house, and third-party data. However, users can also check the data in order to analyze insights into the business performance. 

Business intelligence software

Organizations use the valuable insights gained from business intelligence software and data analysis to enhance improved decisions, analyze market trends, and check problems while finding relevant business opportunities and revenue. 

Let us see the significance of business intelligence software along with its types. 

Dive down!

The Prominence of BI Software 

The International Data Corporation has recently envisaged that business analytics and big data will increase the $400 Bn global market showing a massive jump from 2019. Organizations from different businesses now understand the numerous benefits of business intelligence software and its competitive business edge. So, let us see the benefits of BI Software for your business. 

<< Also Read: How can Business Intelligence significantly improve your ERP software?>>

Fetch growth insights- 

The primary definition of BI software means gaining essential insights. However, you can also optimize BI sales opportunities and customer divisions. You can combine relational databases and multi-data models with real-time data and cross-sectional department connections. Through this, you can control a massive amount of data and surface things in varied ways.

On the other hand, you can assess supply, growth areas, market position, and more. Data is drawn in the term of real-time and checked via collaboration while improving market sense. For example, consumers having support/sales can share reviews with the top management. This gives an exact scenario of the current market status.  

Business intelligence software

Resolve emergency issues-

If you have an urgent crisis, it can be resolved with accurate information. BI software has an ad-hoc feature that helps you check data and create insights in just a few minutes. You can easily make informed decisions after the escalation of the crisis. The software has a wizard interface, and these solutions help you locate and extract critical data while generating reports. 

Access ground data quickly-

To access real-time ground action, you can leverage business intelligence software. With it, you don’t have to wait in long queues to collate or process raw market data from central departments such as marketing support/ sales. The software has excellent multi-dimensional analytics that can be parallel used by teams. One thing is that data is dynamic and shifts with market conditions right from the start. 

<<Also Read: Manage and view Business Intelligence report in Sage 300>>

Many BI tools have been intuitive for fresh users, so data analysis is extensively leveraged across many companies. Significant employees easily sweep ground data and can be quickly sorted, cleaned, and inserted into the central repository. This empowers the company with the latest data. Also, BI software solutions get connection tools that share the best insights and practices. 

Business intelligence software

Get more significant insights-

BI solutions have typical features, including scorecards and dashboards as well. These features help senior business persons get a more comprehensive view of the company’s extensive performance. Metrics can be personalized to go with the KPIs and real-time reports creation.

Dashboards help plot the business status throughout the entry range. Also, scorecards can be set to offer periodic images of the organization’s progress through its goals. The milestones and metrics are personalized to align with the objectives and overall strategy. 

Precise prediction-

The advanced BI solutions get predictive analytics and forecasting, which helps you predict future outcomes. The tools help leverage recurring, present patterns, and critical patterns to get precise forecasts. The capability to predict actions is connected to the flexibility and agility in industries including retail, tech, and entertainment. 

Types of Business Intelligence Software 

Suppose you ask how the BI software work depending on its type. However, the best way to get the kind of it is the reason the business intelligence software. Usually, business intelligence software includes three main functions packaged, standalone application, or a part of a suite. 

Let us now see its different types. 

Data Discovery 

In the data discovery function of business intelligence software, the real intelligence factor is unveiled in which the data silos are properly mined and thoroughly combined for business insights.

Today, most BI tools stand for data mining tools capable of integrating with various business solutions and datasets. These tools include mailing lists, reports, spreadsheets, web content, and more. Usually, business intelligence software pours all this data into a central platform. Here, processing takes place along with the BI asset.

 

business intelligence software

 

Most data discovery solutions include online analytical processing, usually considered its self-classification. In the case of OLAP, it is just the processing section of the broad data discovery. However, it requires various data discovery tools, including relational database, semantic analytics, predictive analytics, and report writing to clear out the intelligent elements.

The tools easily parse data and can carve enormous data sets into small digestible sections while offering meaningful words. 

Data management 

Business intelligence has the significant function of cleaning the data. Remember that raw data is entirely messy as well as different. However, the raw data requires to get ready for processing, including analytics/ reporting. A data management BI software leverages a simple approach for archiving and indexing. This will make sure raw data exists.

Also, business intelligence software leverages ETL functions (Extract, Transform, Load) to collect data from various sources while loading them into a target platform such as spreadsheets, data warehouses, and data containers. In most cases, business intelligence software involves data management as a prominent element. 

<< Also Read: Why do companies need both ERP and Business intelligence?>>

Reporting platform 

A few business intelligence software solutions emphasize the way data is represented, becoming quite popular among technical users. However, these solutions deliver great visualizations that ease complex data, dashboards highlighting KPIs, customized outputs, and scorecards that showcase thorough business health with good value. 

 

Sage 300 for Financial Services

Sage 300Cloud for Financial Services
Reading Time: 3 minutes

Frustrations can easily multiply when it comes to your accounting system as your organization grows with time. You may even encounter that your accounting system is a barrier for your organization to grow and perform its account tasks efficiently. Financial Services firms must be in control if not, it can lead to spiraling overhead expenses, unnecessary risks, and functional boundaries.

ERP Solutions should be more scalable when it comes to business expansion for the company which provides financial services, also An ERP plays a vital role in analyzing existing business practices for inefficiencies and upgrading them to operate in more efficient ways.

When it comes to financial services Sage300 is one of the best solutions for handling daily accounting tasks with their accounting models which have seamless integration within.

Challenges faced by Financial services Firms:

 When your business revolves around maximizing development and profitability while minimizing costs and risks, your financial management software significantly affects your bottom line.

Some of the major challenges are faced by a Manpower Outsourcing industry

  • Financial Services firms tend to find that their finance teams’ time is bound up in admin over-analysis. This is due to time-draining manual methods such as importing and exporting data files, disconnected systems, manual data entry, and lack of integration which can lead to a loss in revenue and day-to-day operation failure.

 

  • The finance team spends hours and sometimes days building and producing reports, but by the time that they are produced, the information is already out-of-date. This restrains a Financial Services firm’s ability to grow and makes it hard to drive important decision-making.

 

  • In a heavily handled industry such as Financial Services, it is important to ensure you have a clear and evident audit trail that is easy to obtain rather than spending weeks gathering email chains and documents.

 

  • For many finance teams, month-end is one of the most stressful and time-consuming procedures. Time is essential for Financial Services firms and taking weeks to close the books can become unmanageable. This can be due to not enough automation, lack of procedures and complex spreadsheets and can be a drain on resources every month.

 

  • Handling multi-entity organizations can be challenging, made even worse if it is a manual process. Managing these manual processes is time-consuming, tending to human error, and directs to inadequate reporting.

Solution with Sage 300

 Sage 300 (formerly Sage Accpac) is an enterprise resource planning (ERP) software system that serves small and medium-sized businesses in professional services, financial services, the public sector, and other markets such as distribution and wholesale.

Sage 300 is one of the best solution when it comes to offer accounting software for financial services company.

Sage 300Cloud for Financial Services

 

Sage 300 gives powerful and highly detailed accounting module helps you track daily transaction, and more down to the details of many reports, so you can keep them profitable and on time. This is ideal for companies with complex financial structure.

Sage 300 Account Payable (AP) and Account Receivable (AR) modules make it easy for you to see at a glance how well your company is performing and it will also help you to know company performance. Accounts Payable module provides your business with a powerful library of accounting and reporting features that expedite the rapid entry of vendor invoices and full check reconciliation using Bank Services.

Accounts Receivable module helps you to identify customer’s sales statistics, track outstanding balances, easily apply cash to outstanding invoices, and allow you to schedule recurring charges for faster invoicing.

Sage 300Cloud for Financial Services

Sage 300 allows transactions to be entered in multiple currencies like USD, Euro, AED, etc. Reports are available in transactional and home currency.

Sage 300 also provide you one of the powerful tool for reporting know as business Intelligence reporting (BI). BI helps to generate customize report as per your requirements.

Sage 300 ERP Financial Reporter tool is one of the most powerful and user-friendly tools out there. It is a spreadsheet containing functions that read data instantly from General Ledger. Using the financial reporting tool’s drill-down feature, you can drill to the transactions and the account details. Data can be designed and viewed in Excel spreadsheets. One can develop comparison reports and derive the balances of only the parent account and optional field data by using the FR tools’ functions. It also allows for simplifying the reporting of the consolidated databases.

What is Business Intelligence Software ?

Business intelligence software
Reading Time: 6 minutes

Summary: Data sources are increasing daily, and the amount of data that companies need to process is also increasing immensely. So controlling the channels of data and the ability to extract crucial knowledge from it is more important than ever. Business Intelligence software allows companies to extract critical data that help make better business decisions. For example, it reveals hidden market trends and customer preferences that tell what products and services customers are most likely to buy. Moreover, data allows business stakeholders to brainstorm and implement strategies that help save costs and ultimately enable you to become an industry leader.

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What is Business Intelligence?

Business intelligence software comprises the following components: Data mining, Data tools & infrastructure, data analytics, and data visualization. Using these components, business intelligence aims to cull out critical information from large volumes of data that help make better business decisions. 

Modern business intelligence (BI) software help:

  • Understand changing market trends.
  • Examine transforming customer preferences. 
  • Eliminate work inefficiencies.
  • Brainstorm better marketing strategies.
  • Keep crucial data safe on platforms.
  • Get critical insights quickly and without any errors.
  • Users feel empowered when they use trusted BI software platforms.

How does business intelligence software work?

Businesses across industries collect data from multiple sources. This data can be beneficial if companies have the tools and know the techniques to extract valuable insights from that data. Such insights help achieve long-term goals and short-term objectives. Now let’s understand the technical side of the issue.

Data is firstly collected from business management solutions and then processed to eliminate unwanted crap. Finally, the leftover data is stored in cloud-enabled data warehouses allowing instant access to business stakeholders from anywhere, anytime, and on any connected device. Using this processed data, decision-makers can answer business questions quickly and efficiently. Another advantage of business intelligence tools is that they project hardcore data into easy-to-understand charts, graphs, statistics, and other visual mediums. Therefore, key stakeholders can view and understand data easily.

<<<Also Read: How can Business Intelligence significantly improve your ERP software?>>>

Business Intelligence (BI) methods

As described above, Business intelligence (BI) has multiple components that collect and process data allowing key stakeholders to fetch valuable insights. These insights optimize business performance by increasing productivity & efficiency, cutting operational costs, and developing robust customer relationships. In the last few years, business intelligence has evolved to include numerous activities and processes to enhance business performance, such as:

1. Data mining

Companies can uncover valuable insights from large data sets using advanced statistics, machine learning, artificial intelligence, and databases. 

2. Reporting 

The reporting feature enables key stakeholders to glean business insights in an easy-to-understand format.

3. Descriptive analytics

Descriptive analytics allows key stakeholders to identify changing market trends and customer preferences based on current and historical data. 

4. Statistical analysis

This method helps to uncover the underlying trends and patterns from data collected from multiple sources. This method is used in situations like statistical modeling, research interpretations, and designing surveys and studies. 

5. Querying

A business intelligence platform uses structured query language to request data from database tables.

6. Benchmarking

Customized dashboards allow a business intelligence platform to compare historical data to track performance against pre-determined goals. This way, key stakeholders can benchmark their performance and determine their performance. 

7. Data preparation

Collecting data from multiple sources, identifying measurements and dimensions, and readying data for data analysis come under data preparation.

8. Data visualization

Once the data is prepared, it’s time to represent it in an easy-to-understand format using various data visualization tools like graphs, charts, and histograms. 

9. Visual analysis

Visual insights allow key stakeholders to understand the data’s context and underlying intention. It enables decision-makers to comprehend the purpose for which data is being collected, filtered, and analyzed. 

How do business intelligence (BI), business analytics, and data analytics go hand in hand?

Business intelligence is an umbrella term that contains business analytics & data analytics and uses them to achieve a particular goal. Data scientists use predictive analytics and advanced statistics to identify and forecast future patterns. The primary question that data analytics asks is “Why did a particular activity happen and what is the probability of it happening again?”.

Then, business intelligence (BI) uses those algorithms and models to turn results into actionable language.BI software is customized to answer particular queries and critically analyze for planning or decisions. In addition, businesses can implement analytics processes to improve iteration and follow-up questions. Modern-day businesses use analytics to discover, access, explore, and share data, which is called the cycle of analytics. 

What is the difference between traditional BI and modern BI?

Historically, a traditional business intelligence model was used to develop business intelligence tools. IT organizations used a top-down approach to drive business intelligence and static reports were used to answer analytic questions. 

The most significant disadvantage of this process was that if somebody had a follow-up question, their request would be sent to the bottom of the reporting queue, and they had to wait for the process to start over again. As a result, it led to slow reporting cycles, and decision-makers couldn’t leverage real-time data while making decisions.

Even today, most companies use traditional business intelligence for answering static queries and regular reporting. However, some organizations are drifting towards modern business intelligence as it’s more approachable and interactive. Although IT departments play a significant role in managing data access, multiple user levels can customize dashboards and create reports at short notice. In addition, full-fledged software allows users to visualize data in various formats and answer their questions. 

did you know

Benefits of using a business intelligence software

A business intelligence software allows companies across industries to gain a series of benefits, as mentioned below:

1. Enhanced organizational efficiency

BI tools allow organizations to access data from multiple sources, get complete control over their business processes, and benchmark their results with short and long-term business goals. For example, business intelligence software allows for faster clinical trials, better-optimized patient diagnosis, and better closing of claims. The best part is that when employees focus less on compiling reports and performing data analysis, they can focus more on developing better business programs and competitive products for their business. 

2. Intuitive dashboards 

BI intelligence software performs data processing on the company’s servers and the cloud. BI software gathers data from multiple sources, stores them in the data warehouse, and critically analyzes the data based on user queries, interactive dashboards, and drag-and-drop reports. The best part is that a business intelligence tool provides interactive dashboards that empower non-technical users to share stories without much coding proficiency. 

3. Enhanced data organization

Business intelligence tools improve data organization and analysis, allowing different departments to access several databases without seeking permission. Business intelligence software tools can combine internal datasets with external data directories, including social data, customer data, and historical data, into a single warehouse accessible to all key stakeholders. 

4. Data-driven business decision

Better decisions require access to valuable insights churned out of volumes of data. For example, business intelligence software allows companies to view sales forecasts and real-time data to meet with potential clients. As a result, sales reps understand the clients’ needs and can therefore confidently speak with them. Moreover, decision-makers don’t have to wait weeks to access detailed reports, and the risk of outdated data is also eliminated. 

5. Improves employee satisfaction

Business intelligence software allows analysts and IT departments to examine business user requests without spending much time. The best part is that those departments that required permission (or technical expertise) from the IT team to process data can now begin data analysis with little training. Business intelligence tools allow non-technical users to seamlessly and intuitively analyze data without technical expertise. 

6. Enhanced customer experience

Business intelligence software significantly improves customer satisfaction and experience. It quickly pulls text data from multiple customer support chat sessions and operational data as well. For example, business intelligence tools helped Verizon reduce support calls and enhance customer service by 43%. 

BI analysis categories

There are three primary categories for BI software:

  • Predictive analytics: This category considers real-time and historical data to model future outcomes for efficient planning.
  • Descriptive analytics: This category uses historical and real-time data to identify relationships and trends in data.
  • Prescriptive analytics: This category uses simulation, graph analysis, neural networks, and recommendation engines to find answers to questions such as “What should we do to achieve a goal?”.

Factors to consider while choosing a business intelligence software?

Choosing the right business intelligence tool is critical for your company. Here are some factors you must consider while choosing one:

  1. Variety of visualization options 
  2. Multiple dashboard templates
  3. Flexible to implement
  4. Data connectivity
  5. Valuable insights
  6. Alerts and notifications for identifying best & worst metrics
  7. Integrates with multiple business applications

The future trajectory of business intelligence

Business needs, customer preferences, and market trends are continuously changing, and so are business intelligence tools. Current developments happening in the fields of machine learning and artificial intelligence will play a significant role while businesses plan their BI strategy. 

Moreover, businesses today are getting more data-driven to make better decisions. As a result, efforts for collaboration and data-sharing are increasing. Business intelligence software also integrates the best data visualization tools allowing employees with little or no coding experience to cull valuable insights from raw data.

infographic - business intelligence

Difference between Most Recent Cost and Last Unit Cost

Most recent cost and Last unit cost
Reading Time: 2 minutes

It is always important for the people to understand the costing. Costing may sound a complex term but here in this blog we will explain you types of cost in Sage 300 and how one can save lot of time using this feature in Sage 300.

In this blog, let’s understand the meaning of two types of Cost.

  • Most Recent Cost
  • Last Unit Cost

Most Recent Cost:

This costing approach in Sage 300 ERP is based on the most current price for that item. At the moment of purchase, inventory will be updated with the most recent price.

With each receiving document, the most recent cost is updated. Any additional prices added to the receipt are distributed over all items and added to the most recent cost. Also included in the most recent cost are any taxes included on the receipt.

For example, if an item “X” is purchased for $10/ unit; first time inventory will update $10 Cost for that item, if that same item is purchased second time at $12, then inventory will update with $12 for that item from the logic of most recent costing method.

Last Unit Cost:

Last cost, or last unit cost, is not the same as the Last in First out (LIFO) costing method. Last cost is the amount of the item on the last receiving document. Any taxes and additional cost will be excluded from the last unit cost.

Let’s understand this with the help of an example, in the below image for item A1-105/0 the most recent cost is $5.740 and Last unit cost is $5.3013333

Most recent cost and Last unit cost

In PO Module on detail line when we select the item A1-105/0 the system will automatically fetch the most recent cost or last unit cost as per the configuration done in the system.

How to Configure it in the SAGE 300?

The configuration of Most recent cost and Last unit cost is done in Purchase Order Module à Options à Processing à Default Item Cost (use dropdown)

But the biggest question is what is the difference between Most recent cost and Last unit cost?

Both the word may sound similar but there is a minor difference.

The key difference between the last cost and the most recent cost is last cost does not include any additional costs entered against the receipt. Any taxes entered on the receipt are also excluded from the last cost. The last cost can be changed at any time manually in location details, however it will be updated by any subsequent transactions.

What is procurement?

What is procurement
Reading Time: 6 minutes

SUMMARY: Traditionally, a few businesses took the term procurement with purchasing. But, nowadays, businesses are seeing procurement as one step in a large view. So, let us learn what is procurement in detail in this post. 

 

What is procurement

So, you must now be thinking exactly what is procurement?

Procurement is an important transactional section of a running business. The process of choosing and purchasing the services and goods for daily business operations remains important. In order to get the required supplies for businesses at the lowest cost, procurement helps a lot and contributes to directly impacting the bottom line of the business. 

Let us learn the most important aspects of procurement. 

What is procurement process?

The process embraces a wide array of activities that are involved in obtaining services and goods. The main aim of the procurement is to get competitively priced goods that deliver the highest values. For some organizations, procurement takes every stage right from collecting business requirements, and sourcing suppliers to the precise tracking of goods receipts and finally updating the payments. Stating about what is procurement definition? There are some companies that  define procurement as a short range of activities including making payments and issuing purchase orders. 

<< Also Read: Procurement meaning and process explained>>

Why procurement in the business is vital?

If you are planning to understand supply chains then procurement is the most important step. Procurement helps companies find reliable suppliers that can provide highly competitive priced goods and services that can fit the company’s requirements. 

For instance, if an organization demands a new supplier to offer a current service for an uncertain time period then the procurement process helps the organization choose the best supplier who can fulfil all the business needs at an economical price. Also, it helps businesses save a huge amount of time, valuable resources, and money while dealing with an inappropriate supplier.

Another major facet of enhancing the procurement process includes minimizing the cost. While it is also critical to offer high-quality goods as well as services demanded by the company and have the capability to deliver the most authentically while tracking the records accurately. 

What is procurement
What are the types of procurement?

Procurement is classified in many ways such as direct/indirect procurement. It depends on how the company is using the items to be procured. Moreover, procurement can also be classified as goods/services procurement relying on the items that are being procured since then. 

Let us see the types in-detail. 

Direct procurement- 

Direct procurement means obtaining things that are quintessential to offer an end-product. If yours is a manufacturing company, then this would include components and raw materials. For a retail business, the process would include the items purchased for resale to the consumers. 

Examples- Raw materials, parts, components, items purchase for resale

<< Also Read: Difference between Procurement and Purchasing>>

Indirect procurement-

It usually includes items purchases that are essential for daily business operations without affecting the company’s bottomline. It includes everything right from the office related supplies along with advertising campaigns, and furniture. It also involves consulting services and maintenance of equipment. 

Examples- Office supplies, marketing utilities

Services procurement- 

This focuses on procuring people-based services. As per the company, this will also include hiring law firms, individual contractors, on-site security services, and labor. Services procurement may also include indirect/ direct procurement. 

Examples- Wholesale items, raw materials 

Goods procurement- 

It refers to the procurement of physical items while it also includes some software subscriptions. Advanced goods procurement depends on better supply chain management practices. It might include indirect and direct procurement.

Examples- on-site security services, contractors, law firms 

What is procurement

The working of the procurement process 

The procurement process usually includes a number of steps. Here, the business checks specific goods and services required, sources the suppliers to help companies achieve business objectives, and shuffles the cost and terms while purchasing and receiving the concerned items. 

A small-scale business might just have a person handling the procurement of goods and services. The large-scale companies might have experienced persons in dealing with various suppliers as well as related business groups. For some of the products/ services, the team members might take inputs from different business groups so as to check the business’s overall demands. 

The vital point to consider here is that the procurement process is an ongoing process and does not include a series of isolated actions. Suppose, your business aims to establish proper relationships with the key suppliers to fetch the best service and relatively lowest costs. It will translate into higher profit margins finally. Organizations may also require to conduct particular quality assurance checks and overall performance analyses while making sure that suppliers must meet all business expectations. 

<< Also Read: The Possibilities of Global Procurement for Suppliers through a Single System>>

Prime stages of procurement 

The procurement process has 3 distinct stages sourcing, purchasing and receiving stage. 

Now, let’s see all of them. 

Sourcing stage-

It is one of the major stages of the procurement process in which the business checks its requirements, develops a purchase request and more. Though the initial sourcing steps are complete, it is a good method to develop strong supplier relationships. They can develop scenarios for suppliers to get things from learners while improving the processes, products, and equally trust. 

 

Payment stage-

The accounts payable involves a 3-way matching thing that makes sure about the order and invoice accuracy. However, the invoice can be easily approved and the final payment is arranged. Now, this can record all invoices, payments, and orders that should be kept carefully maintained. 

Purchasing stage-

The term involves navigating terms, receiving and creating orders, and checking goods and services. 

What is procurement

What are the critical steps in the procurement process?

The procurement process changes hugely depending on every company’s structure as well as needs. It includes the major 9 steps-

1. Analyze the company’s needs for goods and services-

Initially, a business should analyze the requirements for a particular item or service. Now, this item might be a new one for the company, a subscription renewal or restock of existing goods. The first step includes going deep into the business details. These details might be anything like technical specifications, service characteristics, materials, part numbers, and more. It would be rather a good idea to catch all consulting g departments that have got a bad impact on the purchasing decision. This will make sure that the procured items are affecting the departmental needs accurately. 

 

2. Send purchase request- 

When an employee or a business group requires to procure a particular quantity of new services and supplies, a formal purchase request is made. Usually, a purchase request indicates requirement of the company. It is carried out through departmental managers, purchasing staff, or even specifications including time, price, and quantity to make thing even more precise. 

<< Also Read: What is a manufacturing execution system?>>

 

3. Evaluate and select vendors- 

With a particular approved purchase request and list of requirements, the first thing to follow is to get the best vendor. The second requirement is RFQ i.e. request for quote sent by the purchasing person to the potential suppliers. Here, it is quintessential to stay as detailed as possible. 

Remember that vendor evaluation should not be just on the cost but also the quality, speed, and reliability. A lot of companies thinks of social responsibility or ethics since procurement is being closely related to corporate image. 

 

4. Negotiate terms and price- 

Before making a decision you should at least have a minimum of  3 quotes from the suppliers. 

 

 5. Generate a purchase order-  

First, you should fill purchase order and then send it to the supplier. However, the purchase order should be better in detail to check the proper services as well as goods required to fill the order. 

 

6. Get and check goods delivered-

Keenly check deliveries for all damage and errors. This stage makes sure that 

 

7. Manage requirements matching-

The accounts payable department should always check if there is an accurate three-way match and look at the invoice. Also, businesses should look to have a flawless invoice procedure through accounts payable. They should check the payments should get matched with the invoice amount along with the due date.  

8. Invoice and arrange payment 

Explaining about what is procurement next process,  there lies invocie and arrange respective payments. Once the 3-stage match is accurate, you will pay the invoice. A standard process would ensure that invoices will always be paid on time that can help prevent late fees while aiding good relationships.

9. Keep records

Keep records right from purchase requests, invoices, receipts, and more. The records prove useful for various reasons while assisting company reorder goods at the required price. However, the records should be more accurate and clear for resolving high level disputes.