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3 Inventory strategies you must implement to grow fast!

January 5, 2022 by OptionsAndTraders

Improve and optimize your Inventory process with ABC analysis, Safety Stock and Reorder Stock Strategies.

What is Inventory Management

Inventory management is the tracking process of your business products as they are sourced, bought, stored and sold. It helps reduce costs and improve the company’s ability to meet customer demand and achieve own goals for profit and competitive edge. In this blog post we share some strategies and some tips to help you increase your revenue and reduce loss caused by inventory.

Basic Process Flow

1. Product purchase order is created and sent to the supplier. Once accepted, it’s converted into a purchase invoice.

2. Products are bought, acquired and stored. If you’re not using a software solution then you’re likely going to be counting the products manually which can waste a lot of time and there are also chances for error.

3. When order is placed, generate sales invoice, dispatch products and update inventory stock.

We’re going to help you update your inventory process by familiarizing you with some strategies which can help you get competitive edge and acquire happy and returning customers.

SKU

Your SKU is the product identifier and should be unique for each product. You should be creative with the SKU and make it easy to understand in order to improve storing and retrieving process. An example SKU for White iPhone X 256 GB product can be iphone_x_w_256 instead of 2772732635452. This SKU is important to be mentioned on invoice as well. Each product with same SKU can be distinguished with its unique Serial or IMEI number.

Stock Control

The process of acquiring, dispatching and making sure “required stock” is available comes under stock control process. Your “required stock” can be based on formulas and strategies that we will discuss later. During product acquiring process, the unique serial numbers can be noted (preferably in your software) to improve your inventory process and have exact quantity and exact unique product serial numbers in the system which matches your physical inventory. This will make your dispatch process much smoother.

Safety Stock Inventory

Safety stock is the sweet number of products to meet the customer demands without increasing your product carrying costs. It sounds easy but to find out how much stock you should keep is the challenging part. You can use this formula

Safety stock = (max units sold per day * max lead time in days) – (avg units sold per day * avg lead time in days)

When to Reorder Stock

If you reorder stock too early, you will have to face storage costs and if you order late, you may have to face disappointed customers. Finding the perfect reorder time is important to maintain happy customers and keep costs low. You can use the formula

Reorder Stock = (days it takes from purchase order to receiving delivery * avg units sold per day) + safety stock

Unavailable Stock Error

If your inventory is managed manually then there are chances that you might have to face stock errors such as, stock being shown as available whereas it’s not actually present in the warehouse or vice versa. In order to reduce this error, you will have to move to digital solutions for inventory management and stock control.

Clear Old Inventory

You can accumulate old inventory which went out of style or no longer trending items if you did not plan your stock control process properly. ABC analysis is a great way to identify such issues and help you clear out items that may no longer be in demand with clearance sales or in some cases may need to be destroyed.

In ABC analysis, you classify each product SKU as A, B OR C based on following definitions which allows you to make an informed decision.

A: Low stock (10%). High value (70%)

B: Medium stock (20%). Medium value (20%)

C: High stock (70%), Low value (10%)

Software solutions

SMIELS is a great software solution to make your inventory process efficient and less prone to errors. You are able to create purchase orders which become purchase invoices once accepted. You can send and export these customized invoices in pdf and excel formats. You are able to input your acquired products with their SKU and unique Serial and IMEI number for each. When you make a sale, you can generate sales invoice and add product dispatch. If you don’t wish to validate IMEI or Serial numbers during this step you can disable that in the settings. SMIELS also provides advance user management features which increase sales coordination and team collaboration. You can also set custom roles and permissions for your team members. In order to handle accounting within SMIELS you can integrate your free account with a free Quickfile or Quickbook account as well.

To learn more features about SMIELS or register a free account, visit www.smiels.com.

‍https://www.smiels.com/blog/3-inventory-strategies-you-must-implement

#accounting #inventoryintegration #invoicingmangement

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The 6 Tips to Improve your Invoicing and Billing Process

January 5, 2022 by OptionsAndTraders

1. Getting the basics right

If your invoicing and billing process is not yet digital you must be living in a cave. Going digital allows you to maintain invoice history, find and view any invoice immediately, maintain data privacy and hide sensitive data from unauthorized access, some software and services can even show you patterns and insights so you can improve your business process and increase your revenue.

Let’s go a step further, invoicing system software are very limiting for modern business use. It can only be installed on systems meeting the requirements and is limited by power availability and not to mention the high cost of development. You are unable to sync your data between devices such as to your mobile. Trained staff is required to make use of these software and ongoing maintenance is also not possible in most cases.

Cloud solutions are attractive due to low cost of operation, 24/7 availability, with seamless sync between all your devices so you can also perform business tasks on your mobile device. These services are easy to use and are regularly maintained. If you are not already using a cloud based invoicing service, then here is our pick for top 10 cloud based invoicing services.

2. Best time to invoice and Handle late payments

The best time to send an invoice is immediately after a purchase of service, or right after delivering the products or right after your project is completed. This shows your professional attitude towards your business. If you have to send recurring invoices, send them on the same date every month such as the first of every month to maintain business consistency.

If your invoices don’t have a due date. Your clients and suppliers may not be clearing their dues on time. Therefore you need to set due date on your invoices in a clearly visible location like the top right corner. You should also send a respectful reminder or a notice when the due date is near. Which will alert your client to clear the amount as soon as possible.

You can also ask for an advance deposit from a new client. This way you will be able to understand how they handle payments and if they are serious about doing business with you. It is important that everything is properly documented and if your invoicing software supports recent history tracing and tracking then you can also use that feature to avoid any confusions at later stage.

If you’re still facing late payment issues after above tips then you can also setup late payment charges. Businesses commonly charge 5% fee on late payments, you can set it as a percentage or set an increase of x amount for every x days after the due date. A late payment penalty is enough motivation for people to pay on time.

More about handling late paying client as a small business.

3. Payment Terms and Notes

You should attach your payment terms and policies in your invoice. It contains all your terms of payments such as payment method, due date, consequences of late payment and how any possible scenario will be dealt. It is important to explain and discuss your payment terms and policies to your clients and suppliers before making a deal. You might have to make some changes to your policies so that you and your client are equally comfortable with the deal. It will also make sure that there is no ambiguity or confusions in any of the terms. Your updated terms for the particular deal should be attached to the invoice.

Discussing your terms with your client will make sure they are not surprised at the time of invoicing. And this will also help you to get paid on time. Your client will also appreciate the transparency from your side and this helps in building a strong relationship for the future.

Apart from payment terms and policies, you can also attach notes in your invoices to convey any message in a professional way. Such as a Thank You message for your client, VAT information details, Shipping information details or other.

4. VAT information

Tax information and charges need to be clearly communicated in the invoices. There are a number of VAT types such as standard tax, EC rate, reverse charge, margin VAT and others. Your invoicing software should be able to support all these VAT types with custom values. If your software does not support it then you’re probably going to have to waste time in manually recalculating all your amounts and adjusting your profit margins. You can also include VAT notes in your invoices to further clarify any misunderstanding or confusion your client may have.

Learn more about VAT and its types.

5. Branded invoices and Design flaws

Your clients can judge your professionalism by your invoice design. Therefore invoice design matters. Your invoice should be clear and easy to read and understand. All the details should be in appropriate sections and clearly mentioned. It is recommended to customize your invoices and follow your brand colors and include company logo. It is important not to over design your invoice and to keep it simple.

Some companies also test their invoice design with some of their clients. This is a great way to identify any problems that you may not have thought about. These feedbacks are valuable from your targeted demographic client. Such as if you have an international business and you test your invoice design with clients of different backgrounds and ages then you will be able to better understand how good your invoice is for your international clients.

6. Use digital tools

As we briefly discussed above, going digital has many advantages. A digital tool greatly improves your business process efficiency and increases revenue because you will be able to setup a streamline process to manage your business and most importantly your sales. Cloud software solutions allow you to easily manage your data anytime anywhere. In addition you can also cut your running costs with following features.

Team Members and Permissions

Add team members and set their boundaries with account type and custom permissions. You have complete control over what information your members can see and what they can do. You can set your invoices to be verified and approved by higher authority team member before being published. This makes your process less error prone and improve sales coordination between members and management.

Record of clients and suppliers

Maintain an easy to access record of your clients and suppliers so you can easily view details of contact person or your history of invoices with them. You can also assign sales persons from your team to specific clients or suppliers so they can only manage those clients.

Inventory Management

Advance inventory management allows you to add and manage your products directly in the invoicing software so you can easily add and reference these within invoices. You can also assign products, inventory or product category to sale persons from your team. If your invoicing solution supports GRN/GDN operations then it will automatically update product stock info and you can manage and view complete history for product acquires and dispatches.

Easily share and export

These tools save your time and allow you to easily create invoices with few clicks. These invoices can be exported in pdf or excel formats. You can also share invoices with your clients through email. This quick and easy process saves you hours every week.

SMIELS is a B2B business solution which provides cloud based invoicing with the features discussed above and more. You can try a live demo or visit www.smiels.com to register a free account and make your business process easy and efficient.

‍https://www.smiels.com/blog/6-tips-to-improve-your-invoicing-and-billing-process-by-47