Have you hit a brick wall with your CRM system? We adopt tools like CRM and spreadsheets to solve a problem, until we discover they create yet another silo of information in the business. And when it comes to turning orders into cash, these silos just slow you down.
We’ve all been there, copying data out of one system to paste into another. Often spreadsheets become the glue of most businesses, bridging data between departments. Its natural to make do with an approach like this, it’s works, kind of. It works because the people in your business know the steps and tricks needed. It works as long as someone doesn’t overwrite that formula in the excel.
And maybe you put up with it because you believe there isn’t a system that can handle the whole process. But apart from the inevitable errors, and the wasted time, the bigger problem is that a ‘Franken-system’ can’t give you the reliable information needed to get control, never mind serve customers better and grow your business.
Don’t get me wrong, basic systems and spreadsheets are great when you need something fast and flexible to capture and work on data. They don’t care what you’re asking them to do, but that flexibility also means risks. Typically one person knows how the spreadsheet really functions, if they leave, they take that knowledge with them.
These systems typically fail because they don’t bring your people and processes together.
Are you wasting time and money fixing inaccurate order details?
Are you quoting off the latest cost prices to calculate margins effectively?
Are you working off correct stock levels or scrambling to buy to meet customer promises?
Are you in the dark about sales forecasts and planning fulfilment and production?
Are your competitors serving customers faster?
Do you feel in control of the information that drives your business?
CRM systems have evolved to support more than just contact data and sales pipeline reports.
Software is now available that handles the steps of the order process in one seamless flow:
* Create Quotations (create accurate quotes in seconds, rather than minutes)
* Set follow-up reminders (ensure you don’t lose a sales by simply forgetting about it)
* Generate orders, dispatch and invoices automatically (less time copying and pasting)
* Integrated Bills of Materials and Purchasing (stop re-keying data between orders and production jobs)
* Built-in Inventory management (real time visibility of stock)
* Production and serial numbering (integrate order data with job cards for effective stock management)
* After-sales servicing and job tracking linked to the product sold and the customer record.
* integration with your accounts software
Take Control
Joined up thinking like this puts SME businesses, managers and owners back in control. It creates visibility across the business. It reduces wasted time on manual, repetitive tasks. It gives peace of mind that nothing can be missed. And it creates a platform for growth.
Don’t ‘make do’ any longer.
CRMs should no longer fail your business, because they have evolved to support your entire business process. At Flowlens, we’ve seen customers reduce their order processing time by over 50% with our joined-up cloud software. This means that our customers get paid faster, with fewer errors.
Flowlens is a fully integrated business management solution for small OEMs and Assemble to Order / Build to Order companies. Flowlens runs in the cloud, negating the need for expensive servers and support.
Most ERP systems are too expensive for small companies. Our affordable subscription service means you can access a higher level of management control and reporting, across pre-sales, sales, production and after sales helping your business grow, profitably.
Flowlens minimises the duplication of effort and manual tasks common in most small manufacturers. Flowlens centralises all important customer, product and supplier information (in sync with whatever financial package you use). Flowlens shares common data across various functions of sales, stock, manufacturing, invoicing and after-sales.
Small businesses don’t have the people and time to devote to implement large software systems. Flowlens is modular, you can adopt it gradually, minimising downtime and cost and helping manage change internally. Flowlens is user-friendly and easy for your team to learn. We provide cost effective remote or on site training.
Your existing customer and parts data can be migrated to Flowlens, and we’ll guide you on this as part of our implementation and training services.
Flowlens works alongside your existing accounting package. We integrate with Sage, Quickbooks Online, Kashflow and Xero.
How Flowlens helps you plan production and meet customer expectations
Flowlens integrated features work together to make your day-to-day job easier, removing manual and repetitive tasks, and sharing information throughout the process.
To achieve the end result, the following elements work together:
Define Your Parts & Products
Flowlens lets you define your raw materials, standard components, sub-assemblies and products. Our product configurator tools lets you define the options, upgrades (and price uplifts) for your product. This puts you in control of what your Sales team can sell, and ensures they do so at the right price to get you the right profit.
Generate Job Cards and Material Demand
Flowlens Job Cards control material needs for each job, allowing you to plan stock availability based on required materials, start dates and due dates. Flowlens can automatically generate job card material lists based on the configuration of products sold. Upon completion of the job card, Flowlens will automatically back-flush the bill of materials, adjusting stock levels accordingly.
Labour Costing
Many small businesses we help are focused solely on managing stock yet many of them have direct labour costs that are equal if not more than the cost of materials yet manage labour costs subjectively. Flowlens provides a simple all in one system to track all direct labour costs objectively by project so that you can start managing your labour costs for in the same way you do the products you purchase.
Control Stock Levels and Purchasing
Flowlens tracks stocks levels for your parts, Purchase Orders and Goods Received to ensure you know exactly what you have on hand, what is on order and what is available for production. Flowlens stock management tools help you efficiently control stock value accuracy, manage stock takes and adjustments.
Automated Sales Quotation Builder
Your Sales team benefit from a user-friendly Quotation Builder. Select the Product(s) your customer is interested in, and work through the options and upgrades to arrive at a finished price and automatically generated Quotation. When the Customer places their order, the saved configuration will automatically carry through to the Job Card for material planning, and to make sure that your customers get what they wanted.
MRP Report
The Flowlens MRP shows all active job cards, material requirements and due dates. Stock can be kitted/reserved via Job Cards, to ensure it is available to production.
Integrated After Sales Support
How much do you invest securing new customers? Flowlens provides the simple all in one tools to help ensure your team give them the customer service they need, to keep them as a long term customer, and to ensure you are maximising your profitability. Flowlens Service Management software helps you monitor customer responsiveness, fault-cause-action diagnosis, and control after sales job quotations and costs.
Flowlens works alongside your existing accounting package. This means you can stick with what you know (and save the money you’ve invested already), whilst adding a powerful suite of management tools to help your business grow.
Flowlens is a modular SME cloud software system that manages sales, stock, purchasing, production and after-sales service. Flowlens integrates with Sage 50 & 200, Quickbooks Online, Kashflow and Xero.
With modules starting at £149 per month for 5 users, Flowlens is highly affordable for SMEs looking to grow.
Flowlens helps you avoid duplicating work, and rekeying data. So, Flowlens integrates with your accounts software to pass through sales order invoices and approved purchase invoice data automatically. This saves time, and avoids rekeying errors.
How Does It Work?
All tasks associated with managing sales orders, purchases and stock movements/taking are handled in Flowlens. You accounts package remains the master for creating your monthly and annual accounts, and other functions such as payroll. Flowlens Stock and Project reporting tools can also provide you with a current Work In Progress and Stock values to be added into management accounts when required.
Benefits of integrating your accounts package
Keep the system you are familiar with.
Many businesses have invested their time and money in an accounts package. By integrating with Flowlens you will enhance this investment rather than having to start from scratch as with most ‘all in one’ systems.
Minimise License Costs and Control Access to Sensitive Info
Many businesses try to use their accounts software to do jobs they weren’t designed for. This usually means giving more staff access to the system, increasing license costs and/or risking sensitive business data being accessible. By integrating with Flowlens your staff will have access to purpose built tools to do their job, limiting access to relevant information only.
Grow at your own pace
By keeping your existing accounts package, you are maintaining a solid and familiar foundation for your business. Your finance team, and accountancy practice will be familiar with your setup. Flowlens offers a modular ‘flow and grow’ subscription service which lets you gradually adopt features and add more users as required. This lets you focus on top priorities, without paying for, or getting distracted by less important features.
How does integration work?
As part of our Customer Success implementation service, we we work with you to setup the integration with your accounts system. Each accounts package has it’s own integration process. We take care to guide you through this process to help you ensure accurate and consistent transfer of information between the systems.
Accountants! Do you provide cloud accountancy advice and services to your clients? Flowlens lets you expand the potential of modern accounting products. We’re eager to partner with practices who want to help their clients grow and streamline their businesses. Please contact us to learn more.
What is paid to the supplier is only part of the true cost of holding stock. Businesses that purchase stock, both for production and direct re-sale, will be familiar with the term ‘carrying cost’, which is the sum of:
Purchasing the stock
Warehousing
Handling/delivery
Damage and loss
Purchasing the Stock
There are many hidden costs with purchasing stock. The more obvious ones are missing out on economies of scale by not ordering in bulk or far enough in advance. The opposite, which can have an equally negative impact is purchasing more stock than needed to avail of a special rate.
Less obvious costs may include finance charges and opportunity costs. This is either the interest charged on finance borrowed to purchase the stock or the investment opportunities missed because money is tied up in under-performing inventory.
Warehousing
Stock needs a shelf to sit on and it doesn’t get there by itself. Whether you own or lease a premises, mortgage/rent, insurance, electricity, heating and security are just some of the typical costs you are guaranteed to have, as well as furnishings and equipment for moving stock. If your product requires specialist storage, such as refrigeration, the cost may be greater.
Warehousing costs increase with area size, so it makes sense to only store what is needed for the foreseeable future.
Handling and Delivery
A poor warehouse layout reduces productivity. Identifying fast moving stock and storing it at easily accessible locations will reduce unnecessary internal transport, people movement and repetitive tasks.
Likewise, inefficient use of warehouse space and shelving may result in a bigger area being needed.
Damage and Loss
The longer that stock is held, the greater the risk of depreciation or becoming obsolete. Accurate calculation when ordering is vital for reducing the risk of deterioration of stock.
For accountancy purposes, ‘carrying cost’ is broadly accepted as being fixed at a percentage of stock value, that nothing can be done about. However, smarter stock management enables businesses to reduce these costs and significantly impact the bottom line.
Implementing a stock management process eliminates excessive, obsolete, or underperforming stock that is wasting money. It also ensures that in-demand items are sufficiently stocked so that sales can be completed promptly and cost effectively.
Download our ebook to learn some of the best practices for achieving purchasing efficiencies through better stock management, involving all relevant departments in the process.
Globalisation has changed the playing field for businesses, in particular manufacturing companies. There is the opportunity to reach customers in foreign markets and supplier relationships are now on a global scale.
However, this brings with it the added risk of external factors such as natural disasters, political instability and currency fluctuations.
Now, more than ever, businesses are sourcing multiple suppliers for the same products/raw materials. This reduces the reliance on one or a few suppliers but it introduces the complexity of managing a diverse supply chain.
Here are some things to consider when dealing with multiple suppliers:
Delivery Times
With shipments coming from all over the world, there is a vast range of delivery times and associated costs for each product from each supplier. For example, Supplier A in China may be able to deliver Product A within three weeks but Product B may take six weeks to arrive from the same supplier. Knowing and managing this information is crucial to a business’ purchasing efficiency and stock management.
If the quality of goods from each supplier is equal, the most important considerations thereafter are price and lead time, depending on the urgency of the customer.
Price
If suppliers know that they do not have exclusive contracts with a business, this may motivate them to offer quality goods at competitive prices. They may even engage in ‘price matching’ with the other supplier(s).
Lead Time
A supplier’s order turnaround time may be its unique selling point and therefore allow it to charge more than its competitors.
Meeting Demand
A supplier’s capacity to deliver large orders may be a deciding factor in choosing a provider. If a business gets a large customer order, it needs to be sure it can deliver it in the timeframe quoted. It is important to know the scale and size of suppliers’ operations. (If however, each individual supplier of the same item cannot meet demand, this is where it is beneficial to have multiple suppliers.)
Purchasing departments must consider all of these factors before placing an order with a supplier. An automated approach is the most time-efficient method of doing this. Flowlens provides detailed sales information about the quantity of materials required and the timeframe allowed for production. This automatically calculates the delivery time afforded and in turn, selects the most relevant, cost effective supplier to order from.
If you are currently struggling with managing multiple suppliers, Flowlens can help your business.
We’ve combined the most popular features of our Sales and Operations modules to create a starter solution for businesses taking the first step to creating a more efficient Sales Ordering, Stock Management and Purchase Ordering process.
Our manufacturing software is cloud-based, so you are assured of reliability and availability across devices, with no hardware upgrade costs, or expensive per-user licensing.
An effective stock management process is one of the key components of a company’s purchasing efficiencies. Stock is large capital investment so it makes sense to manage it as well as possible.
In particular, keeping track of raw materials is essential for the smooth flow of the production process. Internal controls to prevent loss, damage and misuse of stock must be established and maintained.
Depending on the type of business, these internal controls include:
Secure the Warehouse
Locked gates and doors with only authorised entry is the first step to securing the stock.
Organise the Stock
If you can’t find it, you can’t control it! Each stock item should be numbered as well as the location that it is stored in. This facilitates quick and easy tracking in the long run.
Count all Deliveries
Do not rely on delivery dockets. Identify who is responsible for signing off on the quantity received before it is officially recorded as ‘in stock’. If there are items missing or damages, this needs to be noted immediately and appropriate action taken, (accounts department notified, goods returned, etc.) Using an automated handheld scanner is the most error-free method of stock recording.
Tag all Materials
Each item should be identified by part number and description to avoid any confusion or the wrong part being used for the wrong production.
Standardise the Picking Process
Whether it is a manual or automated procedure, when any item leaves the warehouse for use in production, servicing, or otherwise, it must be recorded. A controlled gate or door is extremely beneficial for this step.
Check the Bill of Materials (BOM)
The BOM is a list of the parts needed for production and it is used to pick materials from stock. Ensure that your BOM software is reliable as this will save messy additional requests and returns at a later date.
Conduct Spot Checks
Compare small, frequent, manual counts of the warehouse stock with the recorded amounts and investigate any errors found.
Record all Wastage
If scrap materials are thrown away without being properly recorded, the stock management and accounting systems will assume that they are still in stock and quantities and values will be inaccurate. Create a procedure to record wastage regularly.
Download our ebook to learn some of the other best practices for better stock management, involving all relevant departments in the process.
Having an accurate estimate of the volume of sales that are likely to close, facilitates the smooth operation of many other business departments. The ‘leads to sales ratio’ is a measure that can guide the efficiency of the production and purchasing functions. While it is only ever an estimateand businesses should never completely rely on this figure, it is worth keeping an eye on.
So, how are sales projections calculated? The more historical data available, the more accurate the forecast will be.
Define Your Leads
For the purposes of estimating sales, only count ‘leads’ that have been issued with a quotation. Categorise them further by how ‘warm’ they are in terms of likelihood to buy. You could use a percentage measurement or even colour code them.
Start Tracking
Record the number of leads from each stage of the sales funnel that turn into sales and how long they took to do so. As mentioned, the longer that this is done for, the more accurate and valuable the information is.
Note additional trends such as:
Do lower value purchases convert quicker?
Is the product more popular at certain times of the year, Christmas etc.?
Do your customers typically have to spend their budgets by a certain date, e.g. public sector organisations?
Calculate the Ratio
The formula for determining the sales leads to sales closed ratio is as follows:
Total number of closed sales / Number of leads X 100
Example
15 closed sales / 25 leads X 100 = 60%
This means that on average, from 100 sales leads, 60 convert into sales.
If applicable, it may be useful to apply this calculation for various price ranges as the conversion rate may vary depending on the value. For example, you may discover that sales worth under £50,000 have a higher conversion rate than those worth over £50,000.
Past sales are a good indicator of future demand. Once you have determined the percentage of qualified sales quotes that usually turn into orders, you can apply this calculation to your current sales pipeline. Combine the total units of each stock item required for production to enable advance bulk buying.
Download our ebook to learn some of the other best practices for better stock management, involving all relevant departments in the process.
Businesses that don’t operate a sales order process, such as shops and rental companies, must hold a ‘safety stock’ to meet unpredicted sales and exchanges.
A business that successfully manages its safety stock should never lose a sale because they don’t have an item. Having a lot of ‘out of stock’ products appears unreliable to potential customers.
So without the foresight of a sales pipeline, how is a minimum stock threshold determined?
Supplier Delivery Time
The length of time it takes for a product to reach your business from the supplier is the most important factor to consider. The safety stock must be adequate to meet sales during this time. It is not sufficient to allow stock to run out before re-ordering.
Estimating Sales
The next step in establishing a minimum stock threshold is establishing customers’ average purchases during the supplier delivery time.
There is a challenge to hold enough stock to cover suppliers’ delivery times that is sufficient enough to meet customers’ demand but not too great that it affects gross profit because of high carrying costs.
Example
Let’s say that a supplier has a delivery time of 8 working days. The business knows that on average, it sells 220 units of their product per month. If there are 22 working days in the month, then the safety stock should be at least:
220 units / 22 days = 10 units per day X 8 days delivery time = 80 units safety stock
Determine Reorder Points
It’s unlikely that the purchasing department will place an immediate order when the minimum stock threshold alert appears, especially if the process is not automated. They may have a specific day of the week for this task or require time to source quotations. Therefore, the reorder level needs to be set higher than the safety stock level, depending on the individual business’ procedures.
Setting stock re-order levels is just one of the steps businesses can take to achieve savings through purchasing efficiencies.
Download our ebook to learn some of the other best practices for better stock management, involving all relevant departments in the process.
Every business needs supplies, whether it be day-to-day necessities like photocopier paper or materials for manufacturing car parts.
Ensuring that the key components that a business relies on are available when needed is the responsibility of the Purchasing Department. Businesses strive for ‘purchasing efficiency’, whereby materials purchased meet required quality standards at competitive prices.
In the long term, purchasing efficiencies can help an organisation to make considerable financial savings, while protecting goodwill by meeting orders on time.
Department Integration
The effectiveness of the Purchasing Department largely depends on accurate data sharing between many other business functions. Many businesses use a mixture of spreadsheets, databases, accounting packages and other various software applications to manage sales, purchasing, stock and production. This is usually fragmented and cumbersome and fails to provide an integrated real-time overview of what’s going on in the business.
The existence of disparate systems and manual procedures often leads to data duplication and/or gaps. There is potential for human error and the time taken to generate worthwhile reports could be much better spent doing higher value tasks.
Some areas where businesses encounter problems when managing their sales, stock and purchasing include:
Quotes and Sales Orders
Sales quotations and orders are often stored in emails, spreadsheets and standalone CRM systems. Forecasting sales is not easily achieved with accuracy and therefore production scheduling and stock purchasing are not as efficient as they could be.
Minimum Stock Thresholds
Businesses with no automation of minimum stock alerts can expect to run out of materials for production without warning, resulting in delays and associated costs.
Sourcing Supplier Quotations
Lack of notice means that purchasing departments may not be getting the best deals as they don’t have time to get multiple quotes from suppliers.
Receiving and Allocating Stock
Opportunities for discrepancies occur mainly at the inward delivery and production stages, as well as a result of breakages, loss and theft.
Unstructured Data
Manual integration of sales quotations/orders, purchase orders and stock management can result in unstructured data and insufficient business reports.
Too Many Spreadsheets
Using spreadsheets to track and manage stock is laborious and can often result in inaccurate stock level reporting as manual updates get delayed, missed or carried out incorrectly.
Stock Forecasting
Failing to forecast demand efficiently is one of the main contributors to inadequate stock management. Without a clear view of the sales pipeline, businesses may have too much, or too few materials for production demand.
In our ebook, ‘6 Stock Strategies to Increase Your Profits’, we look at how to avoid:
Overstock
Insufficient Stock
Rush Orders
Download this ebook to learn some of the best practices for achieving purchasing efficiencies through better stock management, involving all relevant departments in the process.
